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: –

  1. BDM was charged with a criminal offence which led to his suspension from employment;
  2. The suspension and dismissal letters referred to breach by BDM of various cited provisions of the KRA employment code of conduct; club-2492011__340
  3. 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;
  4. A disciplinary hearing was conducted and a decision taken to dismiss BDM;
  5. BDM appealed against the dismissal in accordance with the code but the appeal was never heard nor determined;
  6. BDM was later acquitted of all criminal charges;
  7. BDM sought reinstatement as well as damages against KRA for unfair and unlawful termination.

The finding

The claim was dismissed by the Industrial Court prompting the appeal to the Court of Appeal leading to the following findings: –

  1. KRA was bound to comply with the provisions of its own code which bound both KRA and its employees; follow-rules-square-sticker-white-94843925
  2. The provisions obligated KRA to gather evidence and subsequently  frame charges against BDM reflective of the violations of the cited provisions of the code;
  3. KRA failed to do so by simply lifting the criminal charges and stating that they offended the cited provisions;
  4. The failure to frame its own charges was a violation of the code;
  5. 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;
  6. 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;
  7. The dismissal letter was also signed by a person who did not have the legal mandate under the Kenya Revenue Authority Act;
  8. 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.

My thoughts

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.

***THE END***

About Anne Babu

Anne is an Advocate of the High Court of Kenya and the Founding Partner of Anne Babu & Co. She has practised employment law for over 12 years and her employment law practice has been recognized by the prestigious Chambers & Partners. Anne cares about employers and their labour issues.


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  1. Maureen Ndwiga says:

    Hi Anne, is NHIF deducted on gross pay or basic?

    1. Anne Babu says:

      The basic pay. See the NHIF website for further information.

  2. Gerald Kommo says:

    I worked from August 2012 to October 2014 when I resigned citing work environment. The resignation was accepted on those basis, my one months noticed waived and paid. However, for all the time in employment, I did not have a JD or KPIs despite me asking for it. My probation was extended for one year without consultation whatsoever meaning I was in probation for 1.5 years and more. My nearly 400k was withheld citing as a company debt yet this was a trade debt from a customer. My salary was frequently delayed sometimes up to 3 months yet I was a signatory to the payroll. When I questioned this, it turned to be a disciplinary meeting where I was given an option to resign or be sacked. I opted to resign. What’s your advice?

    1. Anne Babu says:

      Seems like you have a claim for constructive dismissal. Please see the post we have written on that topic.

    2. Anne Babu says:

      If you were terminated in 2014, you’re claim is time barred since all claims arising from employment should be filed within 3 years.

  3. Dear Anne,
    Suppose Gerald’s case was not time barred, how would he bring up a claim in respect of having served on probation for more than the stipulated 12 months? What weight would such a claim have, if any?

    1. Anne Babu says:

      The probation question depends on the terms of the contract. If the contract is silent, probation should be for a reasonable time depending on the nature of the job. If someone is on probation contrary to the terms of the contract or for unreasonably long and they get frustrated and resign, they can sue for damages for constructive dismissal.

  4. Nancy Ndai says:


  5. Rakhee Shah says:

    Hi Anne, I wanted to ask regarding severance pay. Does it still exist? I have been paying my house help’s nssf. Do I still need to pay her severance at termination of employement. Thanks

    1. Anne Babu says:

      Severance is paid in the event of redundancy only. Service pay is only paid if an employee is not a regular contributing member of NSSF.

  6. Teddy says:

    Hi Anne Babu,

    Your articles have been quite insightful. Suit saving to say the least.
    What is your take on having an employee facing the disciplinary process having legal representation during the hearings?

    Also, should casuals contribute to PAYE?


    1. Anne Babu says:

      You are welcome.
      On casuals, any employee who is paid above the tax threshold should be liable to PAYE.
      The Employment Act only provides for either a union representative or a fellow employee. It is not advisable to allow outsiders especially lawyers.

  7. D. Ongoya says:

    Dear Anne
    How many times should a fixed term contract be renewed, if the job is continuos?

    Can a fixed term contract of 6 months which has has self renewed for more than 2 years be assumed to be permanent at separation, say through redudancies?

    1. Anne Babu says:

      I’m not clear on your last paragraph. An employer has discretion on renewal of a contract and the employee has no right to expect future renewal simply because of past renewals – that’s what the Court of Appeal has held.

  8. Dear Anne,
    Please share the Court Of Appeal judgement on the employer’s discretion to renew employment contracts?

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