When the employee is wrong & the stipulated termination procedure is not followed
4 years ago
This article looks at the legal position in a situation where an employee is on the wrong but the termination is not in accordance with the termination procedure stipulated in Section 41 of the Employment Act (re: disciplinary hearing). The question is, if this procedure is not followed, what effect is there on the termination?
Case study: Julimatt Enterprises Limited vs V.M.K, Civ Appeal No. 262 of 2014
This case was decided by the Court of Appeal on 23rd February 2018. A summary of the facts is that the employee was employed as an Internal Control Systems Manager, his services were terminated summarily without warning and without following the stipulated termination procedure. His employer did not deny having failed to follow the correct procedure but stated that they were justified in terminating the employee because of negligence, which the employee had admitted to, as well as fraud. The Industrial Court awarded him compensation of 6 months salary for the unfair termination. The employer appealed against this award; the following important points were highlighted by the Court of Appeal: –
- A termination that does not comply with the procedure set out in Section 41 of the Employment Act is unfair;
- In determining the amount of compensation to award a person who has been unfairly terminated, the court must consider the several factors spelt out in Section 49 of the Act, which includes: –
- the wishes of the employee;
- the circumstances in which the termination took place, including the extent to which the employee contributed to the termination;
- the practicability of recommending reinstatement or re-engagement;
- the legal principle that reinstatement or re-engagement should not be ordered except in exceptional circumstances;
- the employee’s length of service;
- the employee’s reasonable expectation as to the length of time for which his employment would have continued;
- the opportunities available to the employee for securing alternative employment;
- any amounts owed to the employee;
- any expenses reasonably incurred by the employee as a consequence of the termination;
- any failure by the employee to reasonably mitigate the loss of employment by seeking alternative employment;
- any ex gratia amounts paid to the employee in respect of the termination.
- In deciding the compensation to award, a judge must indicate the reason/rationale for giving the award;
- In this case, the judge had failed not only to give her rationale for the award but also to take into account several factors, including, the reasons that led to the employee’s termination, including the employee’s admitted negligence, the fact that the employer had treated the employee fairly leniently by writing off a huge amount lost as a result of the employee’s negligence as well as the fact that the employee was paid salary in lieu of notice and prorated leave;
- In light of 4 above, there was no justification for the award of 6 months compensation which the Court of Appeal proceeded to reduce to 2 months!
There you have it, a termination that is done without following the stipulated procedure is an unfair termination but the circumstances surrounding the termination are very important factors in determining the award.
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