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ELRCPartially AllowedMemorandum of Claim dated 9th August, 2011· [2013] KEELRC 156 (KLR)

Robert Bosire Nyagaka v Sameer Agriculture & Livestock (K) Ltd [2013] KEELRC 156 (KLR)

Industrial Court (Employment and Labour Relations Court)
19 September 2013
1,839 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer that fired a manager for poor performance without a hearing, warnings, or appraisal records was ordered to pay nearly Kshs. 800,000.

What this practically means

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Executive summary

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The Claimant, employed as a Sales and Distribution Manager at a gross salary of Kshs.80,000/=, sued for maximum compensation and terminal benefits following termination of his employment on 1st July 2011 on grounds of unsatisfactory performance. The Respondent contended the Claimant was on successive short-term contracts which expired and were not renewed due to poor performance. The Respondent failed to appear at the hearing on 20th June 2013 despite proper service, and the court determined the claim on the pleadings, the Claimant's testimony and the Respondent's documents. The court found that at the date of termination the alleged six-month extension had expired, so the Claimant was not on a short-term contract, and that the issuance of successive short-term contracts suggested an attempt to defeat the protective provisions of the Employment Act. The court held the termination was both substantively unlawful and procedurally unfair: the Claimant was neither notified of the alleged non-performance nor given an opportunity to make representations as mandated by Section 42(2), and the Respondent produced no appraisal records or warning letters to justify the grounds, failing its evidential burden under Section 47(5). The uncontested terminal benefits of Kshs.158,207/= were awarded, together with eight months' gross salary (Kshs.640,000/=) as compensation under Section 49(1)(c), a total of Kshs.798,207/=, plus costs of the suit and a certificate of service.

Key legal issues

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01

Fair procedure for termination on grounds of poor performance

Holding

The termination was procedurally unfair because the Claimant was neither notified of the alleged non-performance nor given an opportunity to make representations before termination, contrary to Section 45(2)(c).

Reasoning

Section 42(2) of the Employment Act makes it mandatory for an employer to hear and consider representations from an employee on grounds of misconduct or poor performance before termination. The court found no show-cause letter, no notice, no hearing, and no appraisal or warning records. The alleged poor performance was raised for the first time in the termination letter itself, so the procedural requirements were not met.

p. 3
02

Valid and justifiable reason for termination

Holding

The Respondent failed to justify the reason for termination; no appraisal records or warning letters were produced, so the termination lacked a valid reason contrary to Section 45(2)(a).

Reasoning

The Respondent's pleadings contained no evidence of the Claimant's poor performance. Not a single warning letter or appraisal record was produced, and no appraisal was even alleged. The court held the Respondent had failed to discharge its evidential burden under Section 47(5), while the Claimant had proved wrongful and unfair termination.

p. 4
03

Whether the Claimant was on a short-term contract at the time of termination

Holding

At termination on 1st July 2011 the alleged six-month extension had expired on 30th June 2011, so the Claimant was not on any short-term contract.

Reasoning

The court examined the chronology of contracts: the initial contract expired on 31st December 2010 and the alleged six-month extension expired on 30th June 2011. Termination occurred on 1st July 2011 for unsatisfactory performance, indicating the employer treated the relationship as continuing and the Respondent's characterisation of non-renewal could not stand.

p. 3
04

Quantum of compensation under Section 49(1)(c)

Holding

The court awarded eight months' gross salary as compensation, considering the substantive and procedural unfairness, sudden loss of income, humiliation, lack of certificate of service, length of service and loss of future employment prospects.

Reasoning

Section 49(1)(c) permits compensation of up to twelve months' gross salary. The court weighed the aggravating circumstances, including the failure to issue a mandatory certificate of service under Section 51, and fixed compensation at eight months' gross salary of Kshs.80,000/=, totalling Kshs.640,000/=.

p. 4

Legal principles established

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  • Before terminating employment on grounds of misconduct or poor performance, an employer must hear and consider the employee's representations as required by Section 42(2) of the Employment Act.
  • An employer who alleges poor performance must produce evidence such as appraisal records and warning letters; failure to justify the grounds shifts liability to the employer under Section 45.
  • Issuing successive short-term contracts may suggest an intention to defeat the protective provisions of the Employment Act.

Court orders

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  1. 1.Payment of terminal benefits to the Claimant in the sum of Kshs.158,207/= (one month's salary in lieu of notice Kshs.80,000/=; salary arrears 26th May–25th June 2011 Kshs.47,207/=; salary arrears 26th June–1st July 2011 Kshs.16,000/=; three days' salary in lieu of leave Kshs.8,000/=; plus certificate of service)
  2. 2.Compensation of eight (8) months' salary for unlawful and unfair termination in the sum of Kshs.640,000/=
  3. 3.Total award of Kshs.798,207/= payable by the Respondent to the Claimant
  4. 4.Respondent to pay costs of the suit

Authorities

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Legislation

  • Employment ActSection 44(4)
  • Employment ActSection 42(2)
  • Employment ActSection 47(5)
  • Employment ActSection 45(1)
  • Employment ActSection 45(2)(a)
  • Employment ActSection 45(2)(c)
  • Employment ActSection 49(1)(c)
  • Employment ActSection 51
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, Sections 42, 44, 45, 47(5), 49, 51)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Robert Bosire Nyagaka v Sameer Agriculture & Livestock (K) Ltd [2013] KEELRC 156 (KLR)", Case Analysis (2013). Memorandum of Claim dated 9th August, 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/156/eng@2013-09-19

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.