TERMINATION PROCESS IN PROBATIONARY CONTRACTS

TERMINATION PROCESS IN PROBATIONARY CONTRACTS

Introduction

Section 2 of the Employment Act, No. 11 of 2007 defines a probationary  contract of employment as “one which is of not more than twelve months duration and is duly written stating that it is for a probationary period.”

A probationary period shall not be more than six months but it may be extended for a further period of not more than six months with the agreement of the employee, this is as provided for under section 42(2) of the Employment Act, No. 11 of 2007.

Termination of probationary contract is provided for under section 42 of the Employment Act, No. 11 of 2007.

Section 42 (4) states that:

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

Either party in a probationary contract may terminate the contract by issuing a seven (7) days’ notice to the other or payment of wages in lieu of notice.

However section 42(1) of the Employment Act, No. 11 of 2007 expressly states that section 41 of the Employment Act will not apply where a termination of employment terminates a probationary contract.

Section 42 of the Employment Act, No. 11 of 2007 provides for notification and hearing before termination on grounds of misconduct, an employer before terminating an employee on grounds of misconduct must notify the employee of the reason and accord the employee an opportunity to be heard, which uplifts the rules of natural justice.

Unfortunately an employee under a probationary contract is not accorded fair hearing as section 42 doesn’t apply to such employees.

The High Court recently handed down a judgment in Petition No. 94 of 2016 – Monica Munira Kibuchi versus Mount Kenya University, section 42(1) of the Employment Act, 2007 excluded employees having probationary contracts from the provisions of section 41, was inconsistent with Articles 24, 41 and 47 of the Constitution of Kenya, 2010 and as such declared to be unconstitutional.

In reaching this decision, the Court juxtaposed the statutory provisions of section 41 with those of section 42 (1) of the Employment Act.

Briefly, section 41 of the Act provides for termination of employment on grounds of misconduct, poor performance or physical incapacity. Accordingly, where an employer considers terminating an employee on those grounds, then he/she is required to:

  1. Explain to the employee reasons for considering the termination; and
  2. Allow the employee to have a right to a representative of his/her choice or another employee present, during such explanation.

The above section clearly and succinctly accords an employee the right to a fair hearing and administrative process as provided for under the Constitution and the Employment Act.

However, in contrast, section 42 (1) provides that an employee under probationary contract is not entitled to the administrative due process contemplated in section 41. The above section reads as follows: “The provisions of section 41 shall not apply where a termination of employment terminates a probationary contract

In context, this means that: An employer can terminate the employment of an employee under a probationary contract at will, without affording him/her a fair hearing as stipulated under Section 41(1) of the Employment Act.

To that extent, the court found that the consequential effect of Section 42 (1) was as follows: –

  1. It excludes and ousts an employee from the procedural fairness requirements under Section 41 as far as probationary contracts are concerned.
  2. It allows an employer to terminate an employee without any regard to procedural fairness.
  3. It violates the labour and employment rights of an employee under a probationary contract.

The same reasoning and findings can be traced in Evans Kiage Onchwari V Hotel Ambassadeur Nairobi [2016] eKLR where Hon. Justice Ndolo held that:

“Article 41 of the Constitution of Kenya guarantees employment and Labour rights for all. “To my mind, these rights may only be limited to the extent that is permitted under Article 24 of the Constitution. To limit enjoyment of a right by the mere reason of the length of service does not in my view meet the threshold of Article 24”

Against this backdrop, the Hon. Judge proceeded to find that Section 42(1) of the Employment Act, 2007 was unconstitutional for it: denies an employee under probationary contract the right to fair hearing as guaranteed under Section 41 of the Employment Act, 2007. Thus, discriminates upon such an employee.

On the one hand, some Courts have found the above section to be unconstitutional as it limits the right to fair hearing of an employee under probationary contract, while on the other hand, courts have stated that there is no discrimination or ousting of a right to a fair hearing. And that an employee under a probationary contract is not afforded the same statutory safeguards as a fully confirmed employee.

These views were echoed by Hon. Justice Nzioki wa Makau in the case of John Muthomi Mathiu V Mastermind Tobacco (K) Ltd [2018] eKLRwhere he found as follows: “the probationary part of a contract of employment is the period where an employee is tested and cannot, therefore, anticipate the same safeguards to be available for him/her like for an employee already confirmed to the position”

However, we are of the opinion that the decision flawed for the reasons that:

An employee is defined under the Employment Act, 2007 as a person employed for wages or salary, and includes an apprentice and indentured learner; and

The Act does not distinguish between an “employee” under a probationary contract from the general definition of an employee. Hence, the only distinction is in respect to the length or duration of the employment contract.

This decision re-emphasizes the need for employers to follow due process and the statutory guidelines when terminating employees under probationary contracts.

It affords all employees (whether on probationary contracts or not) equal protection under the law.

Employers are required to give reasons for termination and guarantee a fair hearing, regardless of the nature of the employment contract. 

Conclusion

It is our considered opinion that the declaration of section 42 of the Employment Act, 2007 as unconstitutional to the extent that it limits the rights of an employee to a fair hearing, is sound within the provision of the Constitution, particularly, Article 10, 24, 41 and 47 of the Constitution of Kenya.

For more information or assistance on similar matters, contact us on info@mmsadvocates.co.ke

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