Aga Khan Hospital Kisumu v Erick Wanjohi [2020] KECA 829 (KLR)
The bottom line
#Kenya's Court of Appeal cut a hospital worker's unfair dismissal payout in half, ruling employers must prove both fair reasons and a fair hearing before firing.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent's termination was fair
- 2.Whether the respondent was in permanent employment
- 3.Whether the respondent was entitled to the remedies granted by the trial court
Key legal issues
#Whether the summary dismissal of the respondent was substantively justified
It was not. Underperformance scoring 38% in an appraisal and negligence allegedly causing financial loss did not constitute gross misconduct warranting summary dismissal, especially where the respondent himself unearthed the fraud.
Section 44(4)(c) permits dismissal for wilful neglect or careless performance, but the court found the alleged failure was not deliberate and the respondent had in fact traced the loss to the culprits. The trial court's finding that below-average performance did not amount to gross misconduct under section 43 was endorsed, and the onus of justifying dismissal rested on the employer.
Whether the termination followed fair procedure
It did not. The respondent was never given the notification and hearing mandated by section 41 of the Employment Act, rendering the termination unfair under section 45.
The court held that the burden lay on the employer to prove procedural fairness, which it failed to discharge. Reliance was placed on CMC Aviation and Kenfreight for the proposition that even where a fair reason exists, non-conformity with statutory procedure amounts to unfair termination. Section 41 requires explanation and hearing before termination on grounds of misconduct or poor performance.
Whether the respondent remained on probation
No. Having been employed from February 2012 and not confirmed or informed of any extension, his probation could not lawfully have extended beyond September 2012 under section 42(2).
The statutory maximum probation is six months, extendable by a further six months only with the employee's agreement. The contract's three-month probation was never confirmed in writing nor extended. By the time of dismissal in August 2013 the 12-month legal maximum had long passed, so the respondent was a permanent employee entitled to full protection including pension benefits.
Whether the trial court properly exercised its discretion in awarding the maximum 12 months' salary compensation
It did not. The maximum award was granted without reasons and without reference to the section 49(4) factors; it was reduced to 6 months' gross salary (Kshs. 720,000).
The court reiterated that compensation must be guided by section 49(4) considerations, that employees must mitigate losses, and that remedies must be proportionate. The trial judge made no mention of the section 49(4) factors, and the respondent had received a lump sum of Kshs. 245,893 and offered no concrete evidence supporting the maximum claim. The award was therefore inordinately high.
Legal principles established
#- The burden rests on the employer to justify the grounds of termination, prove valid and fair reasons under sections 43, 45 and 47(5) of the Employment Act, and to follow the mandatory notification and hearing procedure under section 41; failure to accord a hearing renders the termination unfair.
- Under section 42(2) of the Employment Act a probationary period shall not exceed six months and may only be extended by a further six months with the employee's agreement; beyond that an employee cannot be deemed to be on probation and enjoys full protection of the unfair termination provisions.
- A trial court awarding the statutory maximum compensation of twelve months' gross salary under section 49(1)(c) of the Employment Act must justify the maximum award on the principles in section 49(4); a capricious or unexplained maximum award will be interfered with on appeal.
Court orders
#- 1.The award of the trial court is varied to the extent that the 12 months gross salary compensation is set aside and substituted with an award of 6 months gross salary of Kshs. 720,000/-
- 2.The award of Kshs. 360,000 (3 months' salary in lieu of notice), Kshs. 189,230 (41 days accrued leave), Kshs. 50,333 (13 days worked in August 2013), Kshs. 86,000 (15 months pension), and the order directing the appellant to issue the respondent with a certificate of service are upheld
- 3.Total award to the respondent is Kshs. 1,159,670/- less statutory deductions and terminal dues already paid
- 4.The appellant is awarded 1/3 of the costs of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Kiage JA wrote a short separate concurrence agreeing entirely with the judgment of Asike-Makhandia JA and adding nothing.
I have had the advantage of reading in draft the Judgment of my learned brother Makhandia, JA with which I agree and to which I have nothing useful to add.p. 6
- On appeal from
- Employment and Labour Relations Court at Kisumu
- ELRC Cause No. 264 of 2013
- Jurisdiction invoked
- First appellate jurisdiction under the Court of Appeal Rules (Rule 29(1)(a) invoked); judgment delivered pursuant to rule 32(3) of the Court of Appeal Rules
Relief refused
#Upholding of the maximum 12 months' gross salary compensation for unfair termination
The trial judge granted the statutory maximum without explaining why and without a balanced consideration of the Section 49(4) factors; the award was inordinately high
The appellant's counter-claim of Kshs. 4,493,207
The appellant did not lead any evidence to prove the counter-claim
Costs
The appellant is awarded 1/3 of the costs of this appeal (with the appellant's counter-claim having been dismissed with costs in the trial court).
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The final orders of this Court is that the award of the trial court be and is hereby varied to the extent that the 12 months gross salary is set aside and substituted with an award of 6 months gross salary of Kshs. 720,000/-.
Accordingly, the appeal partially succeeds to that limited extent. I award the appellant 1/3 of the costs of this appeal.
Besides the respondent was not given a hearing envisioned in section 41 of the Employment Act above. It follows that the act of the appellant in summarily dismissing the respondent without giving him an opportunity to be heard amounted to unfair termination as defined in Section 45 of the Act.
It is for this reason that I find just like the trial court that the respondent was not on probation at the time of his summary dismissal.
It is now trite law that under Section 49(1) of the Employment Act that employees are expected to reasonably mitigate their losses and not expect compensation in form of salary until retirement age.
I must also defer to the findings of fact made by the trial court, especially where they are based on the credibility of witnesses because the trial court had the added advantage of hearing and seeing the said witnesses testify.
Issues in the judgment
#The judgment is styled 'JUDGMENT OF ASIKE-MAKHANDIA, JA' but is written in the first person plural and on behalf of the court ('this Court had this to say'), while the bench lists three judges; Odek JA had passed on before delivery and the judgment is delivered pursuant to rule 32(3) with Kiage JA concurring, though the coram heading does not reflect the reduced bench.
Section 50 of the Employment Act is cited as the governing provision for damages for unfair termination, but the quoted provisions ('(a) the wages which the employee would have earned...' and '(c) the equivalent of a number of months wages or salary not exceeding twelve months...') correspond to section 49(1), a discrepancy within the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kentonda Company Limited v Wafula (Appeal E055 of 2024) [2025] KEELRC 48 (KLR)[2025] KEELRC 48 (KLR)23 Jan 2025applied
Cite this brief
#Cite this brief
Caselaw, "Aga Khan Hospital Kisumu v Erick Wanjohi [2020] KECA 829 (KLR)", Case Analysis (2020). Civil Appeal No. 89 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/829/eng@2020-04-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.