Dr.
Allan Pamba v Kenya Hospital Association for & on behalf of the Nairobi
Hospital & Another [2025] KEELRC 1776 (KLR)
Judge: Hon. Justice Nzioki wa Makau
Case Number: Cause No. E614 of 2020
Parties to the Suit:
- Claimant: Dr. Allan Pamba (former CEO of Nairobi Hospital)
- Respondents:
1. Kenya Hospital Association (owner and operator of Nairobi Hospital)
2. Dr. Irungu Ndirangu (Chairperson of the Board, Nairobi Hospital)
Summary Background:
- Dr. Pamba was appointed CEO of Nairobi Hospital in March 2020 on a 3-year contract.
- He was suspended and eventually dismissed in October 2020.
- He claimed the dismissal was retaliatory, stemming from his opposition to irregularities in procurement and governance.
- He challenged the termination as unlawful, procedurally unfair, and a breach of contract.
Brief Background:
This case arose from the termination of Dr. Allan Pamba’s contract as CEO of Nairobi Hospital by the Kenya Hospital Association. The Claimant was employed by the 1st Respondent on a three-year contract with an initial probation period of six months. The contract was to be confirmed after successful completion of the probation period.
However, in case of unsatisfactory performance, the Claimant was to be placed on enhanced performance probation period for an additional three months. The contract was terminated at the end of the six-month probation period when the Claimant allegedly had unsatisfactory performance and refused to participate in a three-month performance enhancement plan.
The Claimant alleged that the termination contract was unlawful and was instigated by the Respondent due to political reasons. He claimed that he performed well during the probation period, and his contract of employment was therefore automatically confirmed by operation of the law following the end of the six-month probation period.
He also alleged that the final evaluation of his probation that determined his alleged underperformance by the second Respondent (Dr. Irungu Ndirangu—the Board Chair) was done contrary to the hospital’s HR policy and the employment laws.
He also claimed that the special board meeting that approved his dismissal was convened in contravention of the HR policy, as review of his performance was not even on the agenda of that meeting. These allegations were confirmed by other board members and the HR manager, who were witnesses of the Claimant.
Dr. Pamba sought multiple remedies, including declaration of unfair termination, reinstatement, damages, and compensation for reputational harm. The remedy for reinstatement was, however later abandoned as the Claimant found another job during the pendency of the suit.
The Respondents, on the other hand, alleged that the termination of the Claimant’s contract was lawful and was done in accordance with the law and the Hospital’s HR policy. They claimed that the Claimant was dismissed following his refusal to engage in a performance enhancement plan due to underperformance in his probation period.
Legal Issues:
- Whether the termination of Dr. Pamba’s employment was procedurally and substantively fair/Whether the Claimant's contract of employment was automatically confirmed
- Whether his rights under the Employment Act and the Constitution were violated/Whether the Claimant was entitled to fair procedure during termination in terms of section 41
- Whether the Respondents breached the Nairobi Hospital Board Charter.
- Whether the 2nd Respondent (Board Chair) was personally liable.
- What remedies, if any, were available to the Claimant/Whether the Claimant was entitled to compensation for his termination/Whether the Claimant was entitled to compensation for his termination
Legal Principles Applied:
- Sections 41, 43, 45, 49 & 50 of the Employment Act, 2007: Governing fair termination procedures and remedies.
- Article 41 of the Constitution of Kenya, 2010: Right to fair labour practices.
- Common law principles on employment contracts and fiduciary duties.
- Consideration of the Board Charter as part of the governance framework binding the hospital.
Findings:
- Procedural Unfairness: No proper hearing or valid process was followed before Dr. Pamba was terminated.
- Substantive Unfairness: The reasons provided for termination were found to be unsubstantiated and politically motivated.
- Violation of Board Charter: The court found breaches of corporate governance standards, especially by the board chair.
- Personal Liability: The 2nd Respondent, Dr. Irungu Ndirangu, was found jointly liable due to his central role in the unlawful dismissal.
- Reputational Harm: The court recognized the significant damage to Dr. Pamba’s professional reputation.
Disposition / Judgment:
- The court declared the termination unlawful, unfair, and in bad faith.
- Awarded Dr. Pamba KES 206 million in damages for wrongful dismissal, loss of income, and reputational harm.
- The award was suspended for 30 days pending an anticipated appeal by the respondents.
Significance/Jurisprudential impact:
- This case reinforces strict adherence to due process in executive terminations.
- Affirms that board members may be held personally liable for fiduciary breaches and misconduct.
- Sets a high standard for corporate governance and employee protections, especially in high-level positions.
- Recognizes non-monetary harm such as reputational loss as compensable.
- Section 41 of the Employment Act is coached in mandatory terms. The learned judge emphasized that section 41 of the Employment Act does not allow for ifs and buts and must be strictly adhered to by employers during termination.
- End of probation period automatically confirms an employment contract in case of non-communication by the employer- The Respondent hospital has paid hefty consequences for failure to make appropriate communications following the end of the Claimant’s probation period. Employers must therefore make necessary communications in a procedural manner to an employee in probation if they intend to take action other than confirmation of the employee’s contract.
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