Safaricom ordered to pay Sh55 million to 17 ex-employees for unfair dismissal

Safaricom PLC has been ordered to pay over Sh55 million in compensation to its 17 former employees as compensation for being unfairly terminated in 2018.(Photo: File)

By Carolyne Kubwa
Wednesday, July 23, 2025

The judge ruled ruled that the employees, all serving as Area Sales Managers, were wrongfully terminated after being blamed for failures in a flawed electronic subscriber registration project piloted by the company.

Safaricom PLC has been ordered to pay over Sh55 million in compensation to its 17 former employees as compensation for being unfairly terminated in 2018.

Employment and Labour Relations Judge Mathews Nduma ruled that the employees, all serving as Area Sales Managers (ASMs), were wrongfully terminated after being blamed for failures in a flawed electronic subscriber registration project piloted by the company.

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The court found that Safaricom engaged in unfair labour practices by summarily dismissing the employees without acknowledging the operational deficiencies of the project, which the employees had repeatedly flagged during its pilot phase.

"There is insufficient evidence to prove that the respondent (Safaricom) deliberately violated the constitutional rights of the Claimants," the judge noted. However, he emphasised that the termination process itself was unfair, stating that the workers were subjected to impossible standards and not given a fair opportunity to defend themselves," the judge ruled.

Justice Nduma stated that the claimants were subjected to the same unfair and impossible work conditions by the respondent and were wrongly accused of negligence when failures of the project were a result of deficiencies in the operational procedures, policies, and systems.

The case stemmed from the rollout of a Huawei Y311 device-based digital subscriber registration system initiated by Safaricom in October 2016.

The court heard that despite feedback from the ASM team highlighting deficiencies in the project, Safaricom proceeded with a national rollout of over 90,000 devices.

In January 2018, employees were asked to account for the devices, many of which had been distributed to agents and dealers.

Testimony presented by the employees indicated that they responded to audit queries and provided reconciliation statements, but received no formal feedback from the company.

In May 2018, the workers were summoned to Safaricom's headquarters by the Risk Division, where they claim they were coerced into recording statements. A month later, they were served with summary dismissal letters.

"All 39 Area Sales Managers involved in the project were dismissed on June 28, 2018," court records state, though only five were later reinstated. The court found no evidence of discrimination in the reinstatements.

In defense, Safaricom argued that the dismissal was justified due to the claimants' negligence, which allegedly resulted in financial losses of Sh544.5 million in purchasing the devices and potential regulatory non-compliance.

Testifying for the company, Senior Manager for Fraud Detection Emmanuel Dibo stated that the ASMs failed to ensure proper usage of the devices, with some being found on competitor networks or registered under individual dealers rather than being used for Safaricom's subscriber registration.

Nonetheless, the court ruled that the failure of the project was not attributable to the employees' actions but rather to systemic and operational deficiencies that had been repeatedly raised by the employees to the company.

While the court dismissed claims of discrimination and violations of constitutional rights, it awarded the employees compensation for unlawful dismissal and payment in lieu of notice.