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Employment Act – “At will” termination of probationary contracts is unconstitutional

24 August 2021
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An employee under probation has the right, before termination of his or her probationary contract, to be explained to by the employer of the reason for which the employer is considering termination.

This was the decision in the case of Monica Munira Kibuchi and 6 Others v Mount Kenya University and the Attorney General [2021] (the “MKU Case”) in which the Employment and Labour Relations Court held that section 42 (1) of the Employment Act, insofar as it excludes an employee under a probationary contract from the provisions of fair procedure prior to termination of their employment, is inconsistent with the Constitution.

Background

The brief facts are that on or about 30 September 2015, Mount Kenya University (the “Respondent”) advertised for various positions, which the Petitioners applied for and were subsequently appointed to. The Petitioners were required to report on duty on 1 February 2016.

Later, the Petitioners learnt that the Respondent had embarked on a process of investigating how the Petitioners were recruited without disclosing the nature of the investigations to the Petitioners.

On 29 April 2016, the Petitioners received letters of termination of their contracts stating that their last date of employment was 30 April 2016. The letters indicated that the Petitioners would each be paid 14 days’ salary in lieu of notice upon clearance with the Respondent as per the terms of their respective employment contracts.

The Respondent terminated the Petitioners’ contracts based on the provisions of section 42 (1) of the Employment Act which excludes the application of section 41 to probationary contracts. Section 41 mandates an employer to explain to an employee the reason for which the employer is considering termination before terminating an employee, on the grounds of misconduct, poor performance or physical incapacity. Section 41 also prescribes the employee’s right to have a shop floor representative present at the time of such explanation.

The Petitioners filed a constitutional petition challenging the constitutionality of section 42 (1) of the Employment Act and sought among others, a declaration that the Petitioners were entitled to the payment of the balance of their contractual periods. They also sought damages from the Respondent for its failure to accord them a fair hearing thereby causing them loss of employment.

The Respondent did not participate in the proceedings.

The Court’s determination

The main issue for determination was whether section 42 (1) of the Employment Act is inconsistent with the Constitution.

In determining the matter, a three-judge bench of Honourable Mbaru J, Abuodha J and Ndolo J. held that previous judicial decisions were divided with some judges deciding that employees under probation could not anticipate substantive justification or fairness of procedure prior to termination and other courts ruling that the limitation of an employee’s right to a fair hearing by the mere reason of the length of service was an unjustified limitation of the employee’s constitutional rights.

The judges noted that Article 47 of the Constitution confers on every person the right to administrative action which includes reasonability and procedurally fairness. If a person’s fundamental freedom 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. The spirit of Article 47, the judges said, was incorporated in section 41 of the Employment Act.

While acknowledging that Article 24 of the Constitution permitted for the limitation of constitutional rights by Acts of Parliament, the judges decided that the limitation of the employee’s right to a fair hearing prior to termination of employment by section 42(1) was neither reasonable nor justifiable. In coming to this conclusion, the judges contrasted section 42(1) with other provisions of the Employment Act and found that:

  1. section 42(2) of the Employment Act mandates employers to only extend the probationary period by a maximum of 6 months with the consent of an employee and is implicit that some consultation must take place between the parties and issues of concern warranting extension discussed before such extension; and
  2. the statute does not distinguish a person employed under a probationary contract from the general definition of an employee and that it was illogical to accord an apprentice or indentured learner who are included in the definition of an employee the procedural benefits of section 41 but deny these to an employee simply because they hold a probationary contract.

The judges elevated employment to one of the most emotive issues in an individual’s life (in addition to life and land ownership) and held 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 the rights to fair labour practice and fair administrative action under Articles 41 and 47 of the Constitution hence null and void.

Why is this relevant for employers?

The MKU Case provides useful guidance on the termination of probationary contracts by employers. Going forward, employers that no longer desire to retain the services of an employee in probation will now be required to afford such and all employees an explanation of the reasons the employer is considering termination and an opportunity for the employee and/or his representative to make representations before such termination.

Employers will no longer be able to rely on the contractual positions that allow them to terminate employment contracts without fair and valid reasons or fair procedure.