[2018] KEELRC 1231 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI

CAUSE NO. 1803 OF 2014

(Before Hon. Justice Mathews N. Nduma)

PROF. ROSE AOKO OGWANG ODHIAMBO............CLAIMANT

VERSUS

THE NATIONAL GENDER

AND EQUALITY COMMISSION.............................RESPONDENT

JUDGMENT

1. Professor Rose Aoko Odhiambo, was the Chief Executive Officer of the National Gender and Equality Commission from 1st October 2012 for a fixed term contract of 5 years. The Respondent terminated her services on 6th October 2014 in terms of clause 15 of the letter of appointment as read with section 22 of the National Gender and Equality commission Act (NGEC) for-

(i) Failure to diligently take her responsibility as expected of her in the Public Procurement and Disposal Act, (2005) and the 2006 Regulations.

(ii) Failure to ensure proper documentation of the procurement process for Tender No. NGEC/01/2013/14.

(iii) Allowing alteration of tender documents to show that Resolution Health was the successful bidder when well aware that BRITAM was the successful bidder awarded by the Tender Committee on 23/6/2014.

(iv) Occasioning delay in completing the procurement process causing the commission to loose over Kshs.3 million paid for extension of cover.

2. The aforesaid conduct was said to amount to negligence and or concealment of information. This constituted breach of legal duty and trust and was injurious to the commission and its members. The Claimant was thus summarily dismissed for gross misconduct.

3. The letter of dismissal was by Commissioner Winfred Lichuma, the Chair person.

4. The claim was filed on 14th October, 2014 praying for –

a) A Declaration that the Respondent’s termination of the Claimant’s contract of employment was illegal, null and void ‘abinitio’.

b) An order directing the Respondent to reinstate the Claimant back to her position of the secretary/CEO of the Respondent.

In the alternative

c) Damages as particularized in paragraph 43 of the statement of claim.

d) Costs of the suit and interest.

Summary of the Claimant’s Case

5. The Claimant served probation and was confirmed to her position. That from on set, the Claimant experienced consistent animosity, antagonism and criticism from the chairperson of to the Respondent (RW1) whose duty is to supervise, and direct the work of the Respondent. The Claimant relied on documents marked 6(a) – (c) as evidence of alleged animosity.

6. Through the pleadings and oral testimony before court, the Claimant’s evidence may be summarized as follows;

7. Sometimes in May 2014, the Claimant initiated the process of renewing the medical cover for the staff, which was due to expire on 30th June 2014, by obtaining the approval of the commission to start the process.

8. The tender was advertised on 9th May, 2014 in the Daily Nation Newspaper. A tender Evaluation committee was put in place on 23rd May, 2014.

9. On 3rd June 2014, the commission wrote to the Claimant seeking inclusion of an expert in the evaluation process. The claimant wrote to both the National Hospital Insurance Fund (NHIF) and the Insurance Regulatory Authority requesting for the said experts. The letters were delivered on 5th June, 2014. The Claimant states that she closely followed the progression of the procurement being alive to the near date of expiry.

10. The Evaluation committee made a decision on 6th June, 2014. The Claimant was not a member of the same. The procurement officer communicated by Memo dated 18th June, 2014 the progress report of the tender for the medical cover.

11. The Claimant noted errors in the report and referred the matter back to the tendering committee by making notes on the memo. The Claimant insisted that corrections had to be made before the procurement officer communicated the award of the insurance tender.

12. On 24th June, 2014 Claimant wrote to the procurement officer noting urgency of the matter. Procurement Officer confirmed by email dated 23th & 25th June 2014 that the process was complete.

13. Draft minutes of the tender committee meeting held on 23rd June, 2014 were forwarded for confirmation by members and copied to the Claimant by an email dated 25th June, 2014.

14. Deputy CEO forwarded the amended document to the Claimant vide an email dated 26th June, 2014. Claimant made notes on the document and referred it back to the tender committee.

15. As time was of essence, the Claimant forwarded to the chair person a soft copy of the award of tender No. NGEC/01/2013/4 on 27th June, 2014. The Chairperson requested for signed minutes leading to that award which the Claimant had not received from the tender committee.

16. The duly finalized and signed documents for the Medical Cover were availed to the Claimant on 1st July, 2014 at Windsor Hotel alongside a workshop of the commissioners and the CEO. At the same time, the Claimant saw an email from the procurement officer purporting to communicate to the winning company and a losing company prior to the approval of the commission and contrary to the express written prohibition by the Claimant. The emails by the procurement officer are marked annexture ‘18’.

17. The Claimant presented the received procurement documents for approval to the commission at Windsor due to the urgency of the matter. The commission declined to grant approval of the tender award citing lack of board paper requesting approval; absence of specifications of the cover and lack of expertise in the evaluation among others.

18. The commission directed the repeat of the evaluation process with an expert, an extension of the current cover by two (2) months to allow adequate time to process a new cover and a warning letter to the Claimant for the delay of the process that would occasion the commission to lose resources.

19. The Claimant in compliance with the commission directions above enlisted participation of a Mr. Douglas Mburia, an expert from the Insurance Regulatory Authority. The expert recommended cancellation of the advertised tender and re-advertisement and the commission was notified. Tender Committee recommended extension of current cover by two (2) months in their meeting of 8th July, 2014. The Claimant initiated the extension process.

20. The new tender process for the Medical Cover went on successfully and the new cover took effect on September, 2014 at the expiry of the two (2) months extension.

21. The Claimant laments, despite the above sequence of events, on 24th July, 2014 the Respondent through the Chair issued the Claimant a notice to show cause why she should not be dismissed for the various charges that led to her dismissal outlined earlier in this judgment. The Claimant responded to these allegations in a letter dated 7th August, 2014 and provided supporting documents.

22. The Claimant states that she had demonstrated that she was not guilty of any of the alleged acts/omissions amounting to gross misconduct.

23. On 25th September, 2014, the Claimant was invited to a disciplinary hearing. She was to appear before the commission on 2nd October, 2014. The Claimant at the time suffered throat infection with loss of voice. She was unable to make oral presentation but made a supplementary written response pointing all numerous inaccuracies’ and errors in the report to the commission committee.

24. The Claimant attended oral presentation on 6th October, 2014 with two lawyers. The two lawyers were denied audience. She represented herself and on 7th October, 2014 she received a letter of termination.

25. The Claimant states that the termination was capricious, malicious and without reasonable basis and was in breach of the Rules of Natural Justice.

26. The Claimant was prior to taking this appointment Director of the Institute of Women, Gender and Development Studies at Egerton University for a period of 13 years. She had resigned to take up her new assignment with the Respondent. The Claimant states she suffered loss and damage and was at the time of hearing without a job and unable to support her livelihood.

27. That the false allegations, of incompetence and dishonesty are injurious to her reputation, character and her known abilities and minimizes her chance of re-employment. The Claimant therefore sought reinstatement and in the alternative, award of damages.

Response

28. The Respondent did not file a Memorandum of Reply to the Memorandum of Claim. The Respondent however filed a comprehensive replying affidavit sworn by Wilfred Odimbo Lichuma, the Chair person to the commission to the application filed simultaneously with the Memorandum of Claim. Whether or not this serves the purpose served by a Memorandum of Claim is a matter for determination. Chairperson Lichuma also testified under oath as RW1 in opposition to the claim.

29. In her testimony, RW1 testified that the Claimant was recruited as CEO following a very competitive process. However, the Claimant was not confirmed after six months probation because she did not meet the mark. The probation was extended for a further six months.That the CEO was answerable to the commission. That the Chairperson supervised her work on behalf of the commission.Therefore the Claimant was answerable to the Chairperson on her daily performance. RW1 denied harassing the Claimant. She stated that decision to extend the Claimant’s probation was not personal but was by the commission. The Claimant was subsequently confirmed in the position of CEO. The issue was referred to parliament through Hon. Wanga. The Chairperson answered the issue to parliament. RW1 said she did not know who raised the query with parliament.

30. RW1 told court that the claimant’s employment was terminated for falsifying documents in a tender process the commission was involved in. That the Claimant was served with a show cause letter and her explanation was not satisfactory hence the termination.

31. That the letter of appointment stipulates well the responsibilities of CEO. The Claimant had the overall responsibility and oversight over the commission. That the claimant had responsibility to ensure the tender process met the requirements of the Public Procurement Act and Regulations.

32. RW1 stated that in the particular tender process to renew the staff medical cover, Resolution health had won the tender. The commission was not satisfied with the process followed and ordered the process to start afresh. That the minutes of the committee revealed that the tender had been awarded to BRITAM but the Claimant presented documents to the commission for the approval of an award to Resolution Health for 11. 3 million Kenya shillings. The claimant had demanded that the Tender Committee review their award and that is how a change was made from BRITAM to Resolution Health.

33. That the Claimant was aware that the procurement officer Mr. Brown Mkanda had on 27th June, 2014 written to Resolution Health informing them that they had not won the tender. The CEO had been copied the letter and therefore was aware of the matter when she presented documents awarding the Medical Cover Tender to Resolution Health to the Commission for approval. That the Claimant did not disclose this to the commission at Windsor Hotel, but instead presented documents for approval of tender to the losing company.

34. That the Commission suffered loss as a result of extension of the existing cover by two months due to the prior performance by the Claimant in supervising the tender process and in fact her interference with the due process caused the delay in awarding the tender to the correct insurance company.

35. RW1 stated that BRITAM was the lowest bidder and had correctly been awarded the tender by the procurement committee and not Resolution Health. The procurement officers who were involved in the fraudulent process had their employment terminated. These were six (6) officers who were involved in the tender process.

36. RW1 stated that the Claimant was subjected to a fair process. She got a notice to show cause. She respondent to it twice. She appeared before a committee of the commission for a hearing on the matter. The Claimant’s explanation was not satisfactory hence the dismissal.

37. RW1 underwent close cross-examination by Mr. Ogembo for the Claimant and held to her narrative largely. RW1 denied that the demand by the commission to involve an expert in the tender process delayed the conclusion of the process. RW1 added that this requirement by the Commission was communicated to the Claimant from the start and the delay in bringing the expert on board was the Claimant’s own doing. She had over all responsibility on the matter and could not be heard to blame the procurement officer, her subordinate for the delay.

38. RW1 insisted that the initial award was to BRITAM and the Claimant had unprocedurally caused amended minutes of the tender committee to Resolution Health. RW1 told the court that members of the tender committee had complained that the award did not reflect what had been agreed by the tender committee. The officers made written statements to this effect. This led to the notice to show cause to the Claimant and eventual termination. RW1 prays that the Claimant’s case be dismissed since the termination was lawful and in terms of a fair procedure.

39. RW1 clarified that though Kshs.3 million was not lost due to the extension of the existing cover for two months, the commission was forced to spend money that had not been budgeted for at the time.

Determination

40. The main reason for terminating the employment of the Claimant was that she caused tender documents to be changed to replace the bidder who had won the staff medical cover BRITAM with the existing insurance company Resolution Health. That she failed to disclose the changes made to the commission and went ahead to have the tender award approved by the commission.

41. The commission declined to approve the award and directed that the existing cover be extended by two months and the process of evaluation of tenders be done afresh.

42. The Claimant in compliance with the directives by the commission re-started the process and included an expert in the tender committee, who had hitherto no been incorporated. The claimant caused the two months extension to staff cover be put in place at a cost of 3 million Kenya Shillings. The tender process was repeated and new cover commenced after the expiry of the two months period.

43. The Claimant was in the court’s view and finding falsely accused of causing the delay in the procurement process resulting in the loss of Kshs.3 million. As a matter of fact, there was no loss of Kshs.3 million. The new cover started after the extension period of two months. The extension was ordered by the commission after they had failed to approve the tender documents presented to them alongside a workshop of the commission at Windsor hotel. It was within the commission’s right to give further directives on the tender process but they wrongly and falsely shifted the blame for the delayed process to the Claimant.

44. As the CEO of the Respondent the Claimant was the overall accounting officer and had oversight over all the processes carried out with financial implications at any level.

45. The Claimant had put in place a procurement committee to open and evaluate, staff medical cover. From the documents produced in court, the Claimant followed the process closely being aware of the right timelines available before the expiry of the existing cover.

46. The procurement committee was led by the procurement officer and there was regular correspondence between him and the Claimant on the progress. The Claimant at all times put a sense of urgency on the matter and demanded a final report of the process be availed to her for approval timelessly.

47. The Claimant relies on the financial expertee of the Deputy CEO to look at the procurement committee report. The Deputy CEO advised the claimant that there were evaluation errors in the document that had resulted in the award of the tender to BRITAM instead of Resolution Health, the existing provider.

48. The CEO, well guided by her deputy made notes on the report directing the committee to rectify and correct the apparent errors.

49. The errors were corrected and tender document presented to the Claimant in time for presentation to the commission for signing on 27th June, 2014 at Windsor hotel alongside an on going workshop.

50. The commission refused to approve the tender because a Board paper had not been presented by the Claimant alongside the tender documents as was customary. The Claimant explained the urgency of the matter and the tight timelines that the procurement process had taken from the date the commission had given the green light to the CEO to start the procurement process to the date she presented the documents to the commission.

51. The Claimant told the court that she was aware that the procurement officer had leaked correspondence purportedly awarding the tender to BRITAM instead of Resolution Health contrary to the final tender award of the committee which had indeed, upon correction of the errors awarded the tender to Resolution Health.

52. The Claimant explained that there was bad blood between herself and the Chairperson of the commission, Commissioner Lichuma. That the Chairperson had fought the Claimant from day one and that she was indeed behind the confusion in the award of the tender and the false accusations made against the Claimant.

53. It is the court’s finding upon a careful evaluation of the evidence before the court that the Claimant was entitled and it was within her mandate to direct correction of errors apparent on the face of the tender report before she could present it for approval to the commission.

54. It is the court’s finding that the Claimant did not interfere unprocedurally with the independence of the tender committee but played her oversight role as the CEO as advised by the Deputy CEO to have obvious errors corrected and the award made by the committee to the winning bidder.

55. It is evident that the procurement officer undermined the efforts of the CEO by prematurely issuing out the award letters before the process was complete and leaking the same to third parties including the commission.

56. In the end, the entire committee members suffered disciplinary consequences and had their employment terminated.

57. The court finds that there was no valid reason to terminate the five (5) year contract between the Claimant and the Respondent prematurely. The Claimant had done her work and could not be punished for that. The Respondent is a public institution and neither the CEO nor the commission is permitted to unduly super intend the other. The relationship must be guided by the constitutional principles well set out in Chapter 6 and 10 of the Constitution of Kenya 2010. Transparency and accountability and fairness are the overriding principles especially in all procurement processes. The Claimant suffered for insisting that these principles be followed to avoid awarding the wrong bidder. The Claimant completed the process, albeit two months late but to the satisfaction of the commission.

58. Accordingly, the Claimant has proved on a balance of probabilities that the termination of her contract was unlawful and unfair. That it violated section 41, 43 and 45 of the Employment Act, 2007. The bullying by the chairperson of the commission amounted to unfair labour practice and undermined good governance, transparency and accountability in the running of the commission. These are the findings of the court.

Issue ii

59. What are the remedies available to the Claimant? The Claimant has sought reinstatement and in the alternative compensation for the unlawful and unfair termination of employment. The termination took place on 6th October, 2014. The court issued interim orders stopping the filling of the post pending the hearing and determination of the suit. Unfortunately, the matter has taken too long to conclude. It is now about three years and six months since the termination took place. The Claimant was employed on a five (5) year contract with effect from 18th September, 2012. The contract period has since expired. The Claimant had only served two years at the time of termination and was left with three years to the end of the contract.

60. Section 12(3)(iv) of the Employment and Labour Relations Court Act Cap 348 B of the laws of Kenya, empowers the court to reinstate an employee within three years from the date of termination. The three years period has since expired and the contract period has also expired. In the circumstances of the case, it would not be appropriate to reinstate the Claimant in terms of section 12 of the ELRC Act, as read with section 49(3)(a) of the Employment Act 2007.

61. Accordingly, the Claimant is deserving of compensation in terms of section 49(1)(c) as read with sub-section 49(4) of the Employment act, 2007.

62. In this regard, the Claimant a high ranking professor and a former Director of the Institute of Equality and Gender studies at the Egerton University suffered immense indignity at the hands of her new employer, the Respondent, a commission meant to protect the rights of women. From day one, the professor suffered harassment from the Chairperson. Her work was constantly undermined as the Claimant has ably demonstrated through her testimony before court.

63. The Claimant was eventually kicked out of her position for simply doing her work and following the directives of the commission. The commission deliberately delayed approving renewal of staff medical cover and shifted all the blame to the Claimant. The allegations made against the Claimant were false and intended to undermine her work and dignity. The Claimant lost her means of livelihood after abandoning a lucrative job at the Egerton University.

64. The prospects of completing a renewable five (5) year contract were nabbed in the bud by the unlawful and unfair conduct of her employer.

65. It is the courts finding that the Claimant did not cause the Respondent any financial loss as alleged by Respondent or at all. The Claimant did not therefore contribute to the loss of her employment.

66. The Claimant wished to continue working. Her bright career, high status in society, were hurt by the false accusations and joblessness. There is no evidence that the Claimant had received any compensation or payment of terminal benefits upon the termination of her employment. The letter of termination is vague as to whether the Claimant was summarily dismissed or was subjected to normal termination. No payment in lieu of notice was offered in the letter in terms of clause 14 of the contract. The letter was silent as to whether the Claimant was entitled to payment of gratuity at 31% of the annual basic salary in terms of clause 9 of the contract of employment.

67. In paragraph 43 of the Memorandum of claim, the Claimant seeks –

(i) Kshs.22,234,695 being the benefit of employment for the unexpired contract net of PAYE .

(ii) Kshs.590,807 being the amount of gratuity that the Claimant would be entitled to at the of the contract net of PAYE.

(iii) Kshs.240,000 leave allowance for the remainder of the unexpired contract.

(iv) Reasonable amount to cover transport allowance, club membership, medical cover and mileage claim.

68. In Andrew K. Tanui vs Postal Corporation of Kenya, Rika J considered the case of a Claimant who was employed by the Respondent on a fixed term contract of three years. His employment was prematurely terminated. The Claimant sought reinstatement and in the alternative remuneration for the remaining term of the contract including gratuity and payment of compensation.

69. The court awarded the Claimant, the maximum 12 months salary, in compensation for the unlawful termination and payment of gratuity for the served term and one month salary in lieu of notice.

70. The court noted that the fixed term contract had expired and it would be unreasonable to reinstate the Claimant.

71. The court in the present case is persuaded by the reasoning of Rika J.

72. Having considered all the circumstances of this case, the matters set out under subsection 49(4) of the Employment Act, and the case law above, the court awards the Claimant –

(i) Twelve months salary in

compensation for the unlawful

termination in the sum of Kshs. 7,747,200.

(ii) One month’s salary in lieu

of notice Kshs. 645,600.

(iii) Gratuity for the served term

of the contract, calculated

at 31% in the sum of Kshs. 2,976,000.

Total award – Kshs.11,368,800.

(iv) Interest at court rates from date of filing suit in respect of (ii) and (iii) above and from date of judgment in respect of (i) above till payment in full.

(v) Respondent to pay costs of the suit.

Dated and Signed in Kisumu this 31st day of July, 2018

Mathews N. Nduma

Judge

Delivered and signed in Nairobi this 10th day of August, 2018

Maureen Onyango

Judge

Appearances

Okoth & Kiplagat Advocates for the Claimant

Rachier & Amollo Advocates for the Respondent

Anne Njuge – Court Clerk