Court Finds Safaricom Grossly Violated Its Managers Rights In Sh544M Device Disaster

In a damning judgment that exposes serious flaws in corporate governance at Kenya’s telecommunications giant, the Labour Relations Court has ordered Safaricom to pay Sh55 million to 17 former sales managers who were wrongfully dismissed over a botched device distribution project worth Sh544.5 million.

The ruling by Justice Nduma Nderi represents more than just a financial blow to Safaricom – it reveals a troubling pattern of scapegoating by the company’s leadership when faced with operational failures of their own making.

The case centers on events from 2018 when Safaricom summarily dismissed 17 Area Sales Managers from its Consumer Business Unit, blaming them for the loss of Huawei Y311 devices that later surfaced on competitor networks.

The Huawei device project, launched in 2016, was designed to enhance subscriber registration processes to meet regulatory “know your customer” requirements.

Safaricom distributed 90,000 devices at enormous cost, only to watch the initiative crumble due to what the court determined were “deficiencies in the operational procedures, policies and systems of the project” rather than individual negligence by the managers.

What emerges from the court documents is a picture of a company that set up its managers to fail, then ruthlessly discarded them when the inevitable problems arose.

The managers were held “accountable for all devices distributed despite involvement of other staff in the distribution process,” creating an impossible situation where they bore responsibility for outcomes beyond their individual control.

The court’s finding that Safaricom subjected the managers to “unfair and impossible work conditions” while wrongly accusing them of negligence when failures resulted from systemic deficiencies speaks to a fundamental breakdown in corporate responsibility.

This wasn’t simply a case of operational mishap – it was a deliberate decision by Safaricom’s leadership to sacrifice its own employees rather than acknowledge institutional failures.

Perhaps most troubling is how Safaricom handled the dismissals themselves.

The managers were terminated without notice and without payment in lieu of notice, violating basic employment law principles.

They were denied a fair opportunity to defend themselves, trampling on rules of natural justice that should be sacred in any civilized workplace. The company’s Ethics and Compliance Department, ironically, became the instrument of this injustice.

The financial impact extends beyond the immediate Sh55 million compensation.

Safaricom claimed exposure to Sh6.7 million in direct losses plus potential regulatory penalties, yet the court’s findings suggest these losses stemmed from the company’s own systemic failures rather than individual misconduct.

The real cost to Safaricom may be measured in damaged reputation and the precedent this case sets for how corporations treat their employees when projects fail.

Emmanuel Dibo’s testimony from Safaricom’s fraud detection department painted a picture of devices going missing, appearing on competitor networks, and being mapped to individual customers rather than serving their intended registration purpose.

Yet the court saw through this narrative, recognizing that such widespread failure indicated institutional rather than individual problems.

The managers’ failed appeals within Safaricom’s internal processes reveal another layer of institutional failure.

The company had multiple opportunities to recognize the injustice of these dismissals and correct course, yet chose to double down on its flawed position.

Only the intervention of the Labour Relations Court finally delivered justice.

Safaricom’s decision to file a notice of appeal against this judgment raises serious questions about the company’s commitment to learning from its mistakes.

Rather than accepting responsibility and implementing reforms to prevent similar injustices, the telecommunications giant appears determined to continue fighting its former employees even after a court has definitively ruled against its position.

This case should serve as a watershed moment for corporate accountability in Kenya.

When billion-shilling projects fail, the solution cannot be to simply fire the people at the bottom of the hierarchy while protecting those who designed flawed systems and impossible working conditions.

The Labour Relations Court’s ruling sends a clear message that such scapegoating will not be tolerated under Kenyan employment law.

For Safaricom’s current employees, this judgment must provide both relief and concern.

Relief that the courts will protect them from similar injustice, but concern that their employer’s first instinct when facing operational failures appears to be finding someone else to blame rather than addressing systemic problems.

The Sh544 million device disaster reveals Safaricom as a company willing to sacrifice its own people to protect its image and leadership.

The Labour Relations Court’s Sh55 million judgment represents more than compensation for wronged employees – it stands as a rebuke to a corporate culture that values scapegoating over accountability and institutional protection over individual justice.​​​​​​​​​​​​​​​​