- In its Memorandum of Defence, Harambee Sacco under its long-serving chairman Macloud Malonza and then CEO Peter Ndegwa denied Mr Robert Nyongesa’s claim that he was wrongfully dismissed from employment. Harambee Sacco also denied that Nyongesa was not allowed to be heard before removal from office. On the 7th of July 2023, Court of Appeal Judges D. K. Musinga and Dr K. I. G. W. Ngenye-Macharia ordered Harambee Sacco to compensate Mr Nongesa, he is set to receive KSh.4,050,743/70
By The Weekly Vision
The trouble-ridded and cash-strapped Harambee Sacco last week suffered a humiliating blow after Court of Appeal Judges D. K. Musinga and Dr K. I. G. W. Ngenye-Macharia ordered that a former staff whose services were unfairly terminated be compensated, the ruling was made on the 7th July 2023.
The Sacco management had appealed against an earlier Judgment and Decree in the Employment and Labour Relations Court of Kenya at Nairobi delivered on 30th November 2017 by Judge Hellen Wasilwa. The failed appeal was against a former employee Robert Nyongesa, who was employed by Harambee Co-Operative Savings and Credit Society Limited, as its ICT Department manager in May 2003 at a gross monthly salary of Sh79,606/50.
His letter of appointment dated 4th April 2003 provided, inter alia: that, upon satisfactory completion of the probationary period of six (6) months, he would be confirmed and appointed on renewable three (3) years contract terms with effect from the 15th May 2003. Mr Nyongesa worked at the sacco until 22nd February 2013 when he was removed from office, by then, he was earning a gross monthly salary of Ksh. 239,768. He then instituted proceedings in the Employment and Labour Relations Court (the ELRC) for compensation.
In its Memorandum of Defence dated 14th October 2013, Harambee Sacco under its long-serving chairman Macloud Malonza and then CEO Peter Ndegwa denied Nyongesa’s claim that he was wrongfully dismissed from employment. Harambee Sacco also denied that Nyongesa was not allowed to be heard before removal from office. The Sacco claimed that during the period up to and including August 2012 being an employee of the Sacco as its Manager, ICT Department which is a senior management position he overdrew and/or caused/allowed to be overdrawn his FOSA Account to the tune of negative Ksh. 523,825.98 with the consequential results.
In its judgment dated 30th November 2017, the ELRC Judge H. Wasilwa allowed Nyongesa’s claim and awarded him:
- “1. 2 months’ salary in lieu of notice = 239,768 X 2 = 479,536/=.
- Salary withheld from November 2012 to November 2013 when the 2nd Respondent communicated the termination = 12 months X 239,768 = 2,877,216/=.
- Gratuity for the contract expiring in May 2012 = 1,172,685/=.
- Damages for unlawful termination equivalent to 12 months’ salary = 12 X 239,768 = 2,877,216/=.
- Salary equivalent to the remainder of the contract unfairly terminated which was to expire in May 2015 for 2013 and May 2015
- = 239,768 X 18 months = 4,315,824/=.
- Gratuity payable on the contract expiring on May 2015 = 1,432,608/=
Total Ksh. 13,155,085/=
Aggrieved by the judgment and decree of the trial court, Harambee Sacco moved to the Court of Appeal Court on appeal to challenge the award. However, the Judges noted that “In view of the foregoing, we reach the inescapable conclusion that the process by which the 1st respondent was removed from office was not fair, and that the same amounts to unfair termination within the meaning of section 45(2) of the Employment Act, and for which the 1st respondent was entitled to compensation”.
The first of the awards in the impugned judgment was KSh. 479,536 made on account of two (2) month’s salary in lieu of notice. We hasten to observe that this award was in accord with one of the express terms of the 1st respondent’s contract of employment in accordance with which either party was at liberty to terminate by giving to the other two (2) months’ notice or paying two (2) months’ salary in lieu thereof. At the time of termination on 22nd February 2013, the 1st respondent earned a monthly salary of KSh. 239,768. Accordingly, the learned Judge in the trial court was correct in awarding him two months’ salary in lieu of notice in the sum of KSh. 479,536 as claimed, and which was by no means excessive.
Turning to the award of KSh. 2,877,216 on account of “damages for unlawful termination equivalent to 12 months’ salary,” we hasten to observe that it is trite law that general damages are not awardable for wrongful termination as of right. However, considering the circumstances under which the termination of employment was carried out, and other factors stipulated in section 49(4) of the Act, we form the view that it would only be fair and just to award the 1st respondent the equivalent of three (3) months’ salary as compensation for wrongful termination.
The Judges awarded Nyongesa as follows:
- KSh. 479,536 – two (2) month’s salary in lieu of notice;
- KSh. 2,877,232 – salary withheld for the period between 15th November 2012 and 15th November 2013;
- KSh. 454,207/70 – gratuity for the period actually served before termination of the last term of the contract (16th May 2012 to 22nd February 2013);
- and KSh. 719,304 (the equivalent of 3 months’ salary) as damages for wrongful termination.