Former CEO awarded Kshs 2.4 Billion for wrongful dismissal

 Here is an interesting report of a hefty compensation awarded to the former CEO of Eco Bank. It talks of the enforcement of Labour Laws in foreign jurisdictions.

http://www.businessdailyafrica.com/Corporate-News/Ex-Ecobank-CEO-awarded-Sh2-4bn/-/539550/2613320/-/qyvpk9z/-/index.html

Enjoy

Industrial Strikes!! Urgent reforms needed to balance business and human rights

2015 has started with another strike by teachers. All attempts to forestall the strike through negotiations and Court adjudication did not bear fruit hence class rooms remain closed in all public schools. The hope in many Kenyans is that the tide of industrial actions witnessed in 2013 will not emerge again. This notwithstanding, it is critical to look at what the law talks about strikes, whether there is a less abrasive means of resolving industrial disputes and the reforms needed.

The foremost foundation for all present industrial action is the Constitution that guarantees every person the right to fair labour practices. It further gives employees the right to participate in the activities of a trade union and most importantly in this case, the right to go on strike. Previously the right to go on strike was not enshrined in the Constitution. It was and still is however recognized under International Labour Organisation’s (ILO) standards.

The Employment Act does protect employees who are members of a trade union and who engage in lawful strikes from termination. This law also allows employees to participate in the activities of a trade union. These provisions echo the Constitution and are also further enshrined in the Labour Relations Act.

The Act specifically protects the right to freedom of association for both employers and employees. It further provides for the right to collective bargaining and outlines the modalities for registration of trade unions. It also enshrines the process of recognition of trade unions by employers which then puts into motion the negotiation of a Collective Bargaining Agreement (CBA). Most importantly, it touches on the need for parties to engage in conciliation before proceeding on strike. In fact once a strike notice has been issued an employer can go to court for the strike to be prohibited if employees, through their union, have failed to engage in conciliation. However the court has powers to ask the parties to engage further in the conciliation.

Nevertheless during many strikes we have seen a narrative that has always repeated itself. Its story line proceeds as follows, a strike notice is issued, the employer invites the union for negotiations, negotiations fail to yield fruits and the employer files a case in Court just before the expiry of the notice. The court issues orders prohibiting the strike but the employees defy the court order and proceed on strike anyway. Once the strike commences, negotiations between both parties continue and hopefully the issue resolved and employees resume work.

The question of strikes is an issue of balancing between business interests or provision of public services and the rights of employees. It is generally known as the balance between business and human rights. Ultimately the state needs to continue providing public services or in the case of profit making companies, they need to make profit and hence create more employment opportunities. However on the other hand, employees need to enjoy their constitutional right to fair labour practices. They need to be fairly remunerated and treated with dignity in a way that allows them to work efficiently. These two competing interests need to have perfect harmony for us to eradicate the problem of strikes in the public and private sector.

On this note, I emphasize the need to entrench more alternative dispute resolution mechanisms that should be pursued before a strike is declared. Presently the law does not give a prominent position to conciliation but only presents it as one of the means of resolving industrial disputes. It seems that whether conciliation takes place or not, employees are still guaranteed to go on strike. However it would be important to reform the law relating to industrial actions so that parties can engage in negotiations and mediation before resulting to strikes.

On the role of the Industrial Court, as observed, employees still disobey Court orders prohibiting strikes. The court should not be so quick to declare a strike illegal. Instead it should focus on playing a supervisory role in the negotiations between parties. It should provide strict timelines within which parties must agree. The Industrial court should embrace ‘court-mandated-alternative dispute resolution’. To this end any return to work formula should be registered in Court to ensure future compliance.

The alternative to this is to entrench a more pro-active role for labour officers. Their mandate during the conciliation proceedings should be enhanced and their decisions adopted and registered in Court. The capacity of Labour Officers to conduct proper conciliation proceedings needs to be improved. More training and provision of infrastructure where proceedings will take place are urgent needs.

Ultimately the question of labour relations management is founded on the need to balance business and human rights. It is critical for all players to accommodate an appropriate balance to ensure the speedy resolution of industrial actions. The core institutions, the Industrial Court and the Ministry of Labour, should also play a more pro-active role in resolving the disputes between employers and employees.

We all hope that the current strike stalemate can be resolved expeditiously so that our children continue enjoying their right to education.

Employees Need a Fair Hearing Before Termination or Dismissal

Employers have been complaining that the Industrial Court is quite harsh towards them. Some have argued that the industrial court is highly skewed in favour of employees. The proponents of this view argue that the court is a pro-employee court and employers stand no chance to win a suit in the court. This view has resulted to some responding with anger, disdain and admonition for the Court. Yet the wise ones should seek to investigate whether this is truly the case and what can be done to remedy this and avoid the risks that follow.

However, I believe that “Fidelity to the Law” is what exemplifies the industrial court in Kenya. You see all that the Industrial Court is doing is enforcing the law more strictly. Although the court tries to even the imbalanced power relations between employees and employers, the Court has simply been firm in enforcing the provisions of the law especially the Employment Act. When this happens, employers who have not been complying with the procedural and substantive aspects of the law will obviously receive adverse orders.

If an employee’s services are terminated unfairly, summarily dismissed without cause, an employee is not paid terminal dues, an employee is discriminated upon or even victimized, such conduct will obviously not portend well with the Court. The industrial court has been keen to ensure that both the procedural and substantive aspects of the employment act are enforced. An employer must conduct the employment relationship within fair rules that are stipulated in the Employment Act. Secondly, the reason for taking certain action must be fair and just.

Today we will highlight the most important aspects of procedural compliance. In this country, just like the world over, majority of people derive their livelihood through employment. The employment relationship is one that affects not just the employee, but the family too. It is therefore a most important relationship. That is why the law will frown upon the mode of firing popular in the media where an employer comes up to an employee and pronounces ‘You are fired’. This will not suffice under the watchful eye of the industrial court.

Procedural compliance mainly involve affording an employee a fair chance to be heard on any allegations raised before any adverse action is taken. This requirement prevents cases where decisions about the fate of employees, for instance a decision to terminate employment, are made in a rushed manner without involving the employee.

For instance when an employer calls an employee for an impromptu meeting only to serve the employee with a termination letter, without an explanation. In this case the employee may also asked to leave the employer’s premises immediately and only return after one week to collect the terminal dues. In this scenario, the employee could also be informed of various allegations of misconduct without being given an opportunity to respond.

Well, let us now clarify what a fair hearing entails as per the provisions of the law and most importantly, the pronouncements that the Industrial Court is making. To begin with, a fair hearing simply entails giving the employee an opportunity to be heard before any adverse action is taken.

Before terminating an employee or undertaking summary dismissal, an employee should be informed of the allegations against him. Such communication should also inform the employee of the date when a formal hearing will be conducted. During the formal hearing the employee should be allowed to be accompanied by another employee or representative of his choice (lawyers should be excluded at this stage). An employee should provide a response to the allegations in writing or orally during the hearing since the allegations had been communicated in advance.

The employer is not stopped from proceeding with the decision to terminate or summarily dismiss if the employee does not give a reasonable response. An employee can dispute all allegations and in such a case the employer only needs to ensure that a fair opportunity to be heard is given. It is for a conciliator or the court itself to then determine whether the reason for termination was fair and just. What is important is that the employer has complied with the first limb of procedural compliance.

The final decision should also be communicated in writing highlighting the reasons for termination or summary dismissal. If dissatisfied, the employee can file suit. In this case however an employer will easily prove that a fair hearing was afforded to the employee. If the court is satisfied, it will then delve into the merits of the decision.

In conclusion, it is important that employers adhere to the procedural requirements of the employment law. This will help employers avoid the risks that come with litigation. I believe that it also puts a human face to the termination process and dignifies the severance of the employment relationship.