A court battle over the dismissal of a senior manager at Kenya Airways (KQ) has exposed an internal dispute over an aircraft engine maintenance contract at the national carrier.
The case was triggered by the airline’s decision to sack Daniel Okello and his supervisor over the selection of a higher-cost, third-ranked supplier from Germany instead of a lower-priced Israeli top bidder for a Boeing 737 engine maintenance contract.
The Employment and Labour Relations Court in Nairobi ruled that the airline unfairly terminated Mr Okello, a B787 Materials and Tools Support Manager, but only on procedural grounds.
The court found that although the August 2019 dismissal was valid, the process was flawed due to bias and lack of disclosure. It upheld the airline’s claim that Mr Okello had defied instructions from his supervisor to halt the procurement process and stop engaging the supplier.
‘The claimant’s supervisor fully participated in the decision-making process that resulted in the claimant’s termination. This participation no doubt creates a sense of bias and a possible conflict of interest,’ the court said.
‘The participation of the claimant’s accuser is, in my view, fatal and impairs the fairness of the process.’
Procurement row
The case stems from a 2019 procurement dispute over Maintenance, Repair and Overhaul (MRO) services for CFM56-7B aircraft engines used on Boeing 737-700 and 737-800 fleets.
Mr Okello told the court he had been instructed to abandon a completed Request for Proposals (RFP) process that had ranked Israel Aerospace Industries (IAI) Bedek and KLM Engineering and Maintenance as top bidders.
Instead, he said, his supervisor directed him to engage Germany’s MTU Aero Engines, a third-ranked bidder offering higher costs and less favourable contractual terms.
He objected, arguing the move violated internal procurement procedures, the company’s code of ethics and public procurement laws.
Mr Okello said the directive would expose the airline to financial loss and undermine value, especially given its well-documented financial strain.
He further argued that the directive breached multiple frameworks, including the KQ Procurement Procedure Manual (2015), the KQ Code of Ethics, and the KISM Code of Ethics and Conduct.
He maintained that Israel Aerospace Industries and KLM Engineering had been recommended based on better pricing, contractual value and more favourable terms.
Insubordination claim
The airline, however, maintained that the instructions were lawful and issued by a superior, Irene Lempaka, acting within her mandate as Acting Head of Supply Chain and Facilities.
It told the court that its managing director and chief operating officer had directed that the RFP process with Israel Aerospace Industries be halted, and that Mr Okello was required to comply.
According to the airline, Mr Okello continued engaging suppliers despite clear instructions to stop, amounting to insubordination.
He was issued with a notice to show cause in June 2019, accused of defying instructions, confronting colleagues and maintaining an insolent attitude towards his supervisor.
Mr Okello responded by defending his actions as necessary to protect the company from irregular procurement decisions and financial risk.
He was invited to a disciplinary hearing on July 4, 2019, dismissed on July 22, 2019, and his appeal was rejected by the airline’s chief executive on August 21, 2019.
He later challenged the decision in court, seeking a declaration that his dismissal was unlawful, unfair and in violation of his constitutional rights.
He also claimed Sh161.7 million in compensation, including lost earnings, benefits and damages.
Court findings
In court, Mr Okello argued that the termination process was fundamentally flawed. He said he was denied access to witness statements and that Ms Lempaka, who initiated the complaint, sat on the disciplinary panel.
The court agreed, finding that the process violated his right to a fair hearing.
‘Fair hearing includes disclosure of evidence to enable adequate defence,’ the court ruled, noting that the airline failed to provide the requested witness statements.
It added that the supervisor’s dual role as accuser and decision-maker ‘impairs the fairness of the process’.
However, the court drew a clear distinction on the substance of the dismissal.
It held that employers are entitled to enforce lawful instructions and discipline employees who defy them.
‘It is undisputed that instructions were issued to the claimant to halt the RFP process, and the claimant admits challenging and continuing engagement, albeit on grounds of legality and financial prudence,’ the court said.
Mr Okello’s claim that the procurement directive was unlawful or would cause financial loss was not proven.
‘The claimant has not provided any credible proof of the respondent’s alleged violation of procurement laws and potential financial losses, as he did not conclusively prove illegality,’ the court said, ruling that KQ had a valid reason to terminate his employment.
Mr Okello had sought Sh161.7 million, including projected earnings over 22 years, pension contributions and travel benefits.
The court rejected the claims as speculative and lacking legal basis, warning against unjust enrichment.
Instead, it awarded him six months’ salary, amounting to Sh2.7 million, citing his long service and the procedural flaws in the dismissal.