Importance of following internal procedures in the termination process
2 years ago
Quite often, a company’s policies and procedures provide the steps to be followed prior to termination of employment. These are often over and above the requirements of the Employment Act. This article looks at the legal position in a situation where a company fails to follow its own procedures prior to termination.
The facts of the case
The case of BDM vs Kenya Revenue Authority was decided by the Court of Appeal in May this year. Brief facts are: –
- BDM was charged with a criminal offence which led to his suspension from employment;
- The suspension and dismissal letters referred to breach by BDM of various cited provisions of the KRA employment code of conduct;
- The allegations against BDM were lifted from the charge sheet, that is, ‘theft by servant’, which KRA alleged was contrary to the cited provisions of the code;
- A disciplinary hearing was conducted and a decision taken to dismiss BDM;
- BDM appealed against the dismissal in accordance with the code but the appeal was never heard nor determined;
- BDM was later acquitted of all criminal charges;
- BDM sought reinstatement as well as damages against KRA for unfair and unlawful termination.
The claim was dismissed by the Industrial Court prompting the appeal to the Court of Appeal leading to the following findings: –
- KRA was bound to comply with the provisions of its own code which bound both KRA and its employees;
- The provisions obligated KRA to gather evidence and subsequently frame charges against BDM reflective of the violations of the cited provisions of the code;
- KRA failed to do so by simply lifting the criminal charges and stating that they offended the cited provisions;
- The failure to frame its own charges was a violation of the code;
- BDM’s case was heard by the internal disciplinary committee as opposed to the Board of Directors as was provided by the code meaning that he was not accorded an opportunity to appear before a properly constituted internal disciplinary organ;
- KRA also breached the code by failing to accord BDM the opportunity to have his case reviewed by the Commissioner of Income Tax as was provided by the code;
- The dismissal letter was also signed by a person who did not have the legal mandate under the Kenya Revenue Authority Act;
- The failure to hear and determine the appeal was also in violation of the code;
The appeal was allowed, the dismissal was converted to a normal termination with full benefits and the matter referred back to the Industrial Court for assessment of award, which includes 4 months’ salary as compensation for the unlawful and unfair termination.
Some parts of the decision are puzzling, such as the conversion of the dismissal to a normal termination.
The point is, however, clear – it’s important to follow internal policies and procedures when conducting a disciplinary process.
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