TERMINATION OF PROBATIONARY CONTRACTS IN KENYA.

An understanding of termination of probationary contracts in Kenya.

Historical Background:

Prior to the promulgation of the 2010 Constitution, there was no requirement under the repealed Employment Act Cap 226, and all an employer needed to do was to terminate the services of an employee whether on probation or open-ended contract by paying the appropriate terminal dues. This is what is defined as “at-will employment” where the employer clearly had the upper hand or “carte blanche” to protect his interests. With the promulgation of the new constitution, there have been significant developments including fair administrative action. Carte blanch

There is no definition of what is a fair procedure under the Act and we rely on various sources:

1. Assimilation of various Acts of Parliament which include The Fair Administration Act
2. International Labour Conventions and Articles (Kenya is a signatory and automatically assimilates its edicts)
3. Commonwealth court decisions; primarily the UK, India and South Africa
4. The local courts have intervened and interpreted where there exists a lacuna in law by interpretation.

In a nutshell you will not find a definition of fair administrative action and it is the duty of employers to engage professional legal and labour law consultants to draft their policies and employment contracts to avoid slip us in court. Many employers have been penalized for not developing policy documents.

However briefly:

1. On receiving a complaint against an employee, the employer must investigate the matter and where no evidence of an offence, notify the employee in writing that the matter has been closed.
2. Where evidence indicates that there is a possibility of the commission require te employee to show cause as to why disciplinary action should not be taken against the; the severity of the offence and possible outcomes
3. Where the response is not satisfactory the employer shall invite the employee to attend a disciplinary hearing at which he will be accorded the right to be accompanied by a fellow employee of his choice or union shop steward and also the right to call witnesses and also interrogate the managements witnesses
4. The disciplinary panel should be constituted in a manner that does not prejudice the rights of the employee; in particular, that the chairperson shall be independent and not directly involved in the direct supervision of the employee and gender sensitivity. The role of each participant must be declared
5. Minutes must be taken verbatim and not redacted for accuracy. Where they are recorded the chairperson must inform the employee at the commencement of the hearing. Minutes upon transcription must be signed off between a representative of the management and the employee and copy availed to the employee.
6. The employee shall be accorded the right to appeal the decision to be heard by a different and superior panel.
7. The object of the Fair Administrative Action Act 2011

1) Every person has the right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair.
(2) If a right or fundamental freedom of a person has been or is likely to be adversely affected by administrative action, the person has the right to be given written reasons for the action.

Definition of a Probationary Contract

Under Section 2 of the Employment Act, an employee is defined to mean a person employed for wages or salary and includes an apprentice and indentured learner.

Although the Act defines a probation contract in relation to the duration of the contract it does not segregate or isolate a person employed under a probationary contract from the general definition of an employee. Therefore, a reading of Section 41 together with the implicit provisions of Section 42(2) renders illogical the provisions of Section 42(1).

In ELRC Appeal No; E009B of 2021 – Anytme Ltd (Applicant) vs Fredrick Mutobera Omurayao (Respondent)

(Being an Appeal against the Judgment and Decree of Hon. M. Agutu (SRM)in Kisumu

CMCC ELRC CAUSE No. 92 of 2020 delivered on 26^th February, 2021)

“The Employment Act defines probation contract as “a contract of employment, which is of not more than twelve months’ duration or part thereof, is in writing and expressly states that it is for a probationary period”

The Black’s Law Dictionary 11^th Edition, defines Probationary Period of Employment as: “serving for a test or trial” and a Probationary employee as “a recently hired employee whose ability and performance are being evaluated during a trial period of employment”

Going” by the above definitions, probation is a period where an employee is expected to work under supervision for a specified period, following which, he will be confirmed to the position.

Probation therefor, in the opinion of this court, is not a form of contract in its self. It is one of the terms and condition of a contract. Having said that, would the three months period accorded the Respondent in his contract then amount to a probation period? My take would be that though the Respondent’s contract was headed “Probation Contract of Service” and then going on to specify the term of the contract to be three months’, the parties in my opinion were in a fixed term contract and which should have proceeded to provide the period within the three months that the Respondent would serve on probation as a pre-chaser to the intended renewal. The entire contract period cannot in my view be probationary.

I find and hold that the contract between the Respondent and the Appellant was a fixed term contract.

SIGNED, DATED, AND DELIVERED BY VIDEO-LINK AND IN COURT AT KISUMU THIS 10^TH DAY OF FEBRUARY, 2022 – CHRISTINE N. BAARI – JUDGE

Previous judgments strictly interpreted that employees who were on probation were not entitled to procedural requirements under Section 41  which require that before terminating the services of an employee,, the employer must demonstrate that there exists a valid reason, the reason must be fair and that procedure must be followed.

Samuel G. Momanyi v Attorney General & Another [2012] eKLR, a claim where the employee had only worked for eleven months and twenty-seven days as opposed to the provided minimum of not less than thirteen months, Lenaola J. (as he then was) declared the said provision unconstitutional.

41. (1). Subject to section 42 (1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation. (2) Notwithstanding any other provision of this Part,

Section 42(1) of the Act provides that:-Termination of probationary contracts,

• The provisions of Section 41(1) shall not apply where a termination of employment terminates a probationary contract.

• Section 42 A probationary contract shall not be more than six months but it may be extended for a further period not exceeding six months with the agreement of the employee

• No employer shall employ an employee under a probationary contract for more than the aggregate period under subsection (2)

• A party to a contract for a probationary contract may terminate the contract by giving not less than seven days of termination of the contract, or by payment in lieu, employer to employee, of seven day’s wages in lieu of notice

The off-shoot of the application of Section 41(1) explicitly indicate that an employee on a probationary contract set at maximum of 12 months shall not be entitled to the procedural fairness under this Section and may be terminated at will simply by the giving of the notice above.

Additionally, they are not entitled to the remedies for unlawful termination under Section 45

45.(1) No employer shall terminate the employment of an employee unfairly. (2) A termination of employment by an employer is unfair if the employer fails to prove― (a) that the reason for the termination is valid; (b) that the reason for the termination is a fair reason― (i) related to the employees conduct, capacity or compatibility; or (ii) based on the operational requirements of the employer; and (c) that the employment was terminated in accordance with fair procedure. (3) An employee who has been continuously employed by his employer for a period not less than thirteen months immediately before the date of termination shall have the right to complain that he has been unfairly terminated. (4) A termination of employment shall be unfair for the purposes of this Part where – (a) the termination is for one of the reasons specified in section 46; or (b) it is found out that in all the circumstances of the case, the employer did not act in accordance with justice and equity in terminating the employment of the employee .

Subsection (3) above ironically locks out employees who have served for less than 13 months meaning that an employee who is on probation for an aggregate twee months is locked out of any remedies available under this Section.

Recent Court decisions have now held that any provision of thee law that infringe on the fundamental rights of any person are un-constitutional are null and void. The y have cited various protections:

Basic minimum conditions of employment.

26.(1) The provisions of this Part and Part VI shall constitute basic minimum terms and conditions of contract of service. (2) Where the terms and conditions of a contract of service are regulated by any regulations, as agreed in any collective agreement or contract between the parties or enacted by any other written law, decreed by any judgment award or order of the Industrial Court are more favourable to an employee than the terms provided in this Part and Part VI, then such favourable terms and conditions of service shall apply.

 Monica Munira Kibuchi & 6 others v Mount Kenya University; Attorney General (Interested Party) [2021] eKLR

The Court of Appeal made the following obseations and dttermination:

1. q) That though Parliament is permitted to enact legislation to give effect to the Constitution such enactment should be done without undermining or ousting the provisions of the Constitution, denial of redness or violation or infringement of or threat to a right or fundamental freedom in the Bill of rights. Therefore, the fact that an employer can dismiss/terminate the employment of an employee without according the employee a fair hearing is an act that contravenes Articles 47 and 50 of the Constitution thus null and void
2. Any legislation therefore which intends to limit or qualify a labour right, ought to be to the extent that the limitation or qualification is reasonable and justifiable in an open and democratic society.
3. Further, in addition to the inconsistencies among Sections 42(1), 42(2) and 41 considered earlier in this judgement, we find no reasonable and justifiable cause in the exclusion of an employee holding a probationary contract from the procedural safeguards contained in Section 41 of the Employment Act.
4. That Section 42(1) insofar as it excludes an employee holding a probationary contract from the provisions of Section 41 of the Employment Act, is inconsistent with Articles 41 and 47 of the Constitution hence null and void.
5. The Court however absolved employer from culpability in failing to accord the claimants fair hearing as the respondent “as the respondent honestly believed and applied the law as it was prior to the pronouncements contained in this judgment. It would therefore be unjust to condemn the Respondent for applying the Law as enacted by Parliament even if that Law is, as we have found it be, inconsistent with the Constitution”. And declined to award compensation as sought in the Petition.

The Court further observed that Courts of the Commonwealth have the inherent power to issue common law declarations of unconstitutionality when Parliament legislates against constitutional norms.

“While it is conceded that declaration of incompatibility against an Act of Parliament does not impugn its legal validity until it is repealed or amended by Parliament, it is necessary to emphasize the need for the Attorney General to review and where in concurrence, initiate necessary legislative repeal or amendment of the statute or sections thereof declared unconstitutional. The Court is aware that several statutes or sections thereof have been declared unconstitutional by the Courts in our judicial hierarchy yet no corresponding legislative amendment or repeal has followed. They therefore remain booby traps to citizens who may not be aware that the Courts have pronounced them invalid”.

In conclusion the Court disposed of the Petition as follows: –

1. a) To the extent that Section 42(1) of the Employment Act, 2007 excludes employees having probationary contracts from the provisions of Section 41, it is inconsistent with articles 24, 41 and 47 of the Constitution.
2. b) The Court will not declare that in terminating the Petitioners’ probationary contracts, the Respondent violated their constitutional rights and Section 41 of the Employment Act since the Respondent relied on the provisions of Section 42(1) of the Act as enacted by Parliament, which expressly excluded persons holding probationary contracts from the provisions of Section 41.

DATED SIGNED AND DELIVERED AT NAIROBI THIS 30^TH DAY OF JULY 2021

MONICA MBARU – JUDGE, JORUM ABUODHA – JUDGE, LINNET NDOLO – JUDGE

REDUNDANCY DURING PROBATION PERIOD

 Cause 2 of 2018 – Luke Kinyua Kamunti v Amigos Nuts and Commodities Limited [2019] eKLR

The respondent was adversely affected by the 2017/18 post-election violence when his newly established hotel was gutted by fire. He opted to declare the employees who still on probation redundant and assumed that the provisions of Section 40 did not apply. The Court found in favour of the Claimant and awarded to payment of 3 month’s salary as compensation for the un-procedural declaration of redundancy.

“The law is now settled that in declaring redundancy, an employer is required to issue two separate notices of at least one month each. The first is a general communication to employees generally notifying them of the impending redundancy. The second is a specific notice to the affected employee. The employer is further required to issue a one month’s notice to the local Labour Officer. In the instant case even though the Respondent issued a general notice to the employees one month before issuing termination notice to the Claimant, the Respondent never issued a notice to the labour officer. Failure to issue a notice to the labour officer violated the provisions of Section 40 of the Employment Act with the result that that redundancy of the Claimant was un-procedural and therefore unfair. The Claimant is therefore entitled to payment of 3 month’s salary as compensation for the unprocedural declaration of redundancy. The sum is subject to deduction as per Section 49 of the Employment Act”.

Nzioki wa Makau – JUDGE

There are various forms of termination but the general requirement of procedural fairness as envisaged under Section 41 and 45 of the Act are followed to avoid penalties.

The author Dan Omondi is a former District Labour Officer and also Executive Officer – Industrial Relations with the Federation of Kenya Employers. The contents of this newsletter do not constitute legal advice and are provided for general information purposes only. To get legal advice, contact us on dataspace2004@yaho.com