Safaricom Ordered to Pay Sh55 Million to Former Sales Managers for Wrongful Dismissal
the Employment and Labour Relations Court in Kenya has ordered Safaricom, the country's leading telecommunications company, to pay a total of Sh55 million in compensation to 17 former sales managers for wrongful dismissal. The verdict, delivered by Justice Nduma Nderi, marks a significant moment in Kenya's labor law landscape, highlighting issues of unfair termination and corporate accountability.
The case centers on the dismissal of the managers, who held the position of Area Sales Manager (ASM) within Safaricom's Consumer Business Unit, in 2018. The managers were sacked following allegations of negligence related to the handling of Huawei Y311 mobile devices, purchased by Safaricom for Sh544.5 million in 2016. These devices were distributed to Safaricom's retail shops, dealers, and agents as part of a subscriber registration project aimed at complying with Kenya's "Know Your Customer" regulations. However, an investigation by Safaricom's Ethics and Compliance Department revealed that some devices were not used for their intended purpose, with several found operating on rival networks or linked to individual customers, including Safaricom agents or dealers. The company claimed this resulted in a financial loss of approximately Sh6.7 million and potential regulatory exposure.
Justice Nderi ruled that the dismissals were unlawful and unfair, citing that Safaricom failed to provide the managers with a fair opportunity to defend themselves. The court found that the company violated the Employment Act of 2007 and breached principles of natural justice. The judge emphasized that the managers were subjected to unfair and challenging work conditions, and the project's failures stemmed from deficiencies in Safaricom's operational procedures, policies, and systems rather than individual negligence. The compensation awarded to each manager was calculated based on their respective monthly gross salaries, as reflected in their payslips at the time of termination.
The ruling has sparked widespread discussion about workplace fairness and the responsibilities of large corporations in Kenya. The Sh55 million compensation package underscores the court's commitment to upholding employee rights and ensuring due process in disciplinary actions. Legal experts suggest this decision could set a precedent for similar cases, encouraging companies to adhere strictly to labor laws and internal policies when handling terminations.
Safaricom, which controls approximately 65.7% of Kenya's mobile market with a subscriber base of around 47 million as of 2024, has responded to the ruling by filing a notice of appeal. The company intends to challenge the Labour Court's findings, arguing that the decision does not fully reflect the circumstances surrounding the dismissals. Safaricom's legal team is expected to focus on the investigation's findings, which highlighted issues such as slow uptake of subscriber registration and the misuse of devices on competitor networks.
This case adds to a series of legal challenges Safaricom has faced over employee terminations in recent years. The telecommunications giant has been ordered to pay millions in compensation to former employees in various rulings, including Sh14.5 million to a former customer care director in 2020 and Sh7.2 million to two senior managers in 2021. These cases highlight ongoing concerns about the company's disciplinary processes and its approach to handling allegations of misconduct or underperformance.
The affected sales managers, who have remained out of the spotlight during the legal proceedings, expressed relief at the court's decision. For many, the ruling represents not only financial compensation but also vindication after years of reputational damage and professional setbacks. The case has also drawn attention to the pressures faced by employees in high-stakes corporate environments, particularly in roles tied to large-scale projects with complex operational demands.
As Safaricom prepares for its appeal, the case continues to resonate across Kenya's corporate sector, raising questions about accountability, employee rights, and the balance between corporate objectives and fair treatment of workers. The outcome of the appeal could further shape the legal and corporate landscape, influencing how companies approach terminations and employee relations in the future.