Introduction
The Black’s Law Dictionary defines prerogative as an exclusive or peculiar privilege. It is the special power, privilege or immunity vested in an office or person, either generally or in an official body. Managerial prerogative is therefore the residue of discretionary power left at any moment in the hands of the managers. It is the discretion that managers have to control and direct the work process unhindered in hiring, work assignments, working methods, discipline, dismissal and transfer.
In Kenya, labour practices are governed by various laws including the Constitution of Kenya, 2010 and the Employment Act. Employment rights are enshrined in Article 41 of the Constitution of Kenya and include the right to fair labour practices, fair remuneration, reasonable working conditions, the right to form, join or participate in the activities and programmes of a trade union and to go on strike.[1] Additionally, the Employment Act 2007 provides minimum general principles of employment which include the prohibition of forced labour, discrimination in employment and sexual harassment. In exercising managerial prerogative, one must always tailor their decision with employment rights.
Legal Analysis
Courts are often reluctant to interfere with employers exercising managerial prerogative since every employer has the inherent right to regulate according to their own discretion and judgement. In Ronald Kipngeno Bii v Unilever Tea Kenya Limited [2022] the court held that an employer is entitled to make independent decisions on whether a position is necessary in his enterprise. Such a decision is discretionary and amounts to managerial prerogative which ought not be interfered with unless the employee shows that the procedure followed was wrong and unfair.[2] Unfairness was addressed in Ann Wambui Kamuiru v Kenya Airways Limited [2016] where the court held that an employer who commences disciplinary proceedings must ensure due process, fair hearing, and due regard to natural justice.[3]
Similarly, in Geoffrey Mworia v Water Resource Management Authority and 2 others, court affirmed that courts will intervene in administrative disciplinary proceedings if it is established that the procedure relied on by the employer offended fairness or due procedure by not upholding rules of natural justice or if the procedure is in clear breach of the employer’s prescribed applicable policy or standards.[4] Courts cannot take over and exercise managerial prerogative at the work place unless it is marred with irregularity or stage managed towards their dismissal in which case it will put it right. This does not mean the courts will hinder the employer’s managerial prerogative to discipline its employees or make decisions.[5]
Courts have the jurisdiction to intervene in a disciplinary process, although such intervention must be in exceptional cases when compelling reasons have been given to justify the court’s intervention. Such compelling reasons include the fact that grave injustice would be occasioned to the employee and that the employee had no alternative means of attaining justice or remedies. This was held in Kenya Planation & Agricultural Workers Union v Finlays Horticultural Kenya.[6]
It must be noted that such intervention by the court does not amount to usurping an employer’s right to take disciplinary action against an employee. Courts intervene to right the wrongs occasioned by an unreasonable decision of the employer. The court in Aviation & Allied Workers Union v Kenya Airways Limited warned that the court must proceed with caution and reluctance. The court however, has no supervisory role on what an employer finds reasonable. In Kenya Airways Limited v Aviation Workers Union Kenya, the court noted that as long as an employer genuinely believes that there was existence of a redundancy situation, any termination was justified and it was not for the court to substitute it with its decision.[7]
International Perspective
In other jurisdictions, managerial prerogative is treated similarly. In Arries v Commission for Conciliation, Mediation & Arbitration, court, in South Africa held that if it is proved that the employer exercised the discretion capriciously, for insubstantial reasons or based on any wrong principle or bias, the employee could succeed in having it interfered with. A capricious act is the arbitrary making of a decision in the absence of reason or justifiable reason. If there is absence of evidence of the employer acting mala fide (in bad faith) the court will not readily interfere with the exercise of prerogative.[8]
The purpose of managerial prerogative rights is to provide legal space for employers to use their discretionary power in management of their organization or business as they think fit, tailoring these rights according to the current situation that is best suited for the needs of the business. In Elya Designs Sdn Bhd v Mahkamah Perusahaan Malaysia & Another the High Court in Malaysia posited that every court should be mindful of the fact that every business strives to keep afloat during times when prevailing economic situations turn such endeavors into a real struggle. With such latitude, courts have always respected a company’s exercise of prerogative to improve operations. Management can therefore regulate according to its own discretion and judgement. This way, the purpose of managerial prerogative can be achieved better.[9]
Conclusion
The power of the court to interfere in an employer’s decisions cannot be ousted merely by invoking the word ‘prerogative’. However, employers can exercise this right as they deem fit while tailoring their managerial decisions with employment principles, relevant laws and natural rules of justice.
If you have any queries relating to the above and other employment queries, please do not hesitate to contact James Mahinda Wairoto and Anastasia Cherotich. Please note that this e-alert is meant for general information only and should not be relied on without seeking specific subject matter legal advice.
[1] Constitution of Kenya, 2010 Art. 41.
[2] Ronald Kipngeno Bii v Unilever Tea Kenya Limited [2022] par. 29 eKLR.
[3] Ann Wambui Kamuiru v Kenya Airways Limited [2016] eKLR.
[4] Geoffrey Mworia v Water Resources Management Authority & 2 others [2015] eKLR.
[5] Alfred Nyungu Kimungui v Bomas of Kenya[2013]eKLR.
[6] Kenya Plantation & Agricultural Workers Union v Finalays Horticultural Kenya [2015] eKLR par. 41.
[7] Kenya Airways Limited v Aviation Workers Union Kenya [2014]eKLR.
[8] Arries v Commission for Conciliation Mediation & Arbitration [2006] 27 ILJ 2324 LC.
[9] Elya Designs Sdn Bhd v Mahkamah Perusahaan Malaysia & Another [2011] 3 CLJ 929.
