When Kevin Isika Mule was HFC’s director of credit risk on a monthly salary of Sh1.16 million, he approached two of the senior-most directors at Housing Finance with information of undisclosed bad loans amounting to Sh4.3 billion. Shortly after that, he was fired. He successfully sued the employer and the High Court awarded him Sh8.9 million as compensation for unlawful termination.
In reaching the final award, Justice Ongaya said he had considered Mr Isika’s whistle-blowing and how it turned against the former HFC employee.
“The court has considered the claimant’s unchallenged lamentations about the respondent’s non-compliance with statutory and regulatory provisions as reported by him to the respondent’s management, leading to his predicament, and which factor aggravates the respondent’s action to dismiss the claimant,” the judge ruled. Mr Isika had in the course of 2015 and 2016 revealed to HF Group managing director Frank Ireri and HFC managing director Sam Waweru that the latter risked losing Sh4.3 billion in bad loans, some of which had been issued irregularly.
On Friday June 17, 2016, Mr Isika was asked to meet his boss Mr Waweru at the Serena Hotel at 6pm. He naturally thought that the meeting would outline the next course of action in the wake of the revelations over the bad loans.
But at the meeting, Mr Waweru handed him a notice to show cause why he should not be fired for failing to apologise for grievances raised by debt management staff, failure to hire a valuer as instructed by Mr Ireri a year earlier and reporting to work late and leaving early without permission.
He was also accused of absenteeism. Mr Isika was also ordered to respond to the letter by the following Monday at 8.30am. The only problem was that he had already been locked out of the HFC system.
On deadline day, the banker again tried to complete his response and submit it but was still locked out of the system so he decided to go to the lender’s headquarters and deliver it in person.
His access card had also been deactivated and rumours were already flying that he was on interdiction. On arrival, Mr Isika found his office locked and it had been ransacked. He was met by two human resource department officers who had scheduled a disciplinary hearing for noon the same day. A new charge had also been introduced — failing to respond to the show cause letter within the prescribed timeline. After failing to convince the HFC board of his predicament, Mr Isika sued the lender and claimed he had been sacked on June 20, 2016, but had not been given a termination letter.
Mr Isika claims to have received the termination letter in December, half a year later, but HFC insisted that it sent the letter on June 21, 2016, via email and post.
In court, HFC accused Mr Isika of forum shopping. The mortgage lender argued that Mr Isika could not sue because he still had a pending appeal before the HFC board hence the suit was an abuse of the court process.
HFC said Mr Isika was sacked on June 21, 2016, after failing to respond to the show-cause letter and ignoring the disciplinary hearing.
Justice Ongaya held that HFC’s action could not be considered to be a constructive termination. He ruled that HFC acted unfairly by not giving Mr Isika a genuine chance to respond to his charges.
“The court finds that taking into account the magnitude of the allegations in the show-cause notice, the claimant was entitled to lament that the weekend allowed to reply was not sufficient.
“When Monday, June 20, 2016, came, the invitation for hearing was made and the claimant was not given ample time to prepare and to attend. There was no room provided in the invitation for the claimant to attend with a colleague of his choice as per section 41 of the Employment Act, 2007.
“The court holds that an employer should offer an employee a genuine chance by way of a notice and a hearing as per section 41 of the Act, failing which it cannot be presumed that the employee is culpable of the allegations for which no such genuine opportunity was provided. The termination was unfair in substance and procedure and the court finds accordingly,” Justice Ongaya held.
The judge held that Mr Isika was entitled to six months’ pay of Sh6.82 million and one month’s salary in lieu of notice (of termination).