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ELRCPartially AllowedCause 2049 of 2011· [2013] KEELRC 503 (KLR)

AGNES YAHUMA DIGO V PJ PETROLEUM EQUIPMENT LIMITED [2013] KEELRC 503 (KLR)

Industrial Court of Kenya
21 February 2013
LNLinnet Ndolo
3,151 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employment court found a dismissal procedurally unfair but denied most compensation because the employee misused a confidential document.

What this practically means

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Executive summary

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The Claimant, employed on 9th May 2011 as Supply and Trading Manager, Petroleum Division at a gross monthly salary of Kshs. 300,000, was summarily dismissed on 1st September 2011. She claimed unfair and unlawful termination and terminal benefits, including 12 months' salary as compensation. The court first found that, the Respondent having failed to communicate its decision on confirmation within the seven days stipulated in clause 1(e) of the appointment letter before the probation lapsed on 12th August 2011, it was estopped from contending she was on probation; she was deemed confirmed. The court then rejected the alleged undocumented flexi-hours arrangement with the General Manager, holding flexible working hours a policy matter and the arrangement superseded by the contract's entire-agreement clause; the Claimant's daily two-hour absence was unauthorised misconduct. The poor-performance allegation failed because the Respondent had no performance management system, no targets and no job description, applying the KSRITAWU principle. Substantive justification existed on the misconduct ground, but Section 41 procedure was admittedly not followed, rendering the termination procedurally unfair. Applying the clean hands doctrine, damages for unfair termination were refused because the Claimant produced a confidential ministerial letter she had no explanation for accessing; however, the summary dismissal was converted to a normal termination. The court awarded Kshs. 300,000 in lieu of notice, 7 days prorata leave under Section 28(1)(b), a certificate of service under Section 51(2), dismissed the house allowance claim, and ordered each party to bear their own costs.

Key legal issues

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01

Status of employment at termination - probation or confirmation

Holding

The Claimant was deemed confirmed upon lapse of the three months' probation on 12th August 2011 because the Respondent failed to communicate its decision within the time stipulated in the appointment letter

Reasoning

Clause 1(e) of the letter of appointment required the Company's decision on confirmation to be communicated not later than seven days before expiry of probation. The Respondent did not do so and the Claimant continued working. The court held the Respondent estopped from reopening the probation issue, finding the Claimant confirmed upon lapse of the probation period.

p. 3
02

Whether there was a valid flexi-hours arrangement

Holding

No agreement for flexible working hours existed; the alleged undocumented arrangement with the General Manager was superseded by the written letter of appointment with an entire-agreement clause, making the Claimant's daily two-hour absence unauthorised misconduct

Reasoning

Clause 12 of the appointment letter constituted the entire agreement and required any modification to be in writing and signed. Flexi hours were characterised as a policy matter not to be agreed between an employee and supervisor. The alleged arrangement was undocumented and the Managing Director was unaware of it, so the Claimant's absences were unauthorised.

p. 4
03

Substantive justification for the termination

Holding

The Respondent had a fair reason to terminate - the Claimant's failure to keep working hours - because the poor-performance allegation was rejected for lack of any performance management system, appraisal or targets

Reasoning

The Respondent's witness admitted the Claimant had no targets and no written job description, and there was no appraisal. Following KSRITAWU v Kinyanjui, an employer alleging poor performance must point out shortcomings and allow improvement. The bigger blame for the Petroleum Division's closure lay with the Respondent. Only the misconduct of failing to keep working hours justified termination substantively.

p. 5
04

Procedural fairness

Holding

The termination was unfair because the Respondent did not follow the mandatory procedure in Section 41 of the Employment Act of explaining reasons and hearing the employee's representations

Reasoning

Section 41 of the Employment Act requires an employer to explain to the employee the reasons for contemplated termination and to hear and consider representations. It was not disputed that this procedure was not followed. Substantive justification does not displace the duty of procedural fairness, so the termination was unfair for want of fair procedure.

p. 5
05

Remedies - damages for unfair termination and notice pay

Holding

Damages for unfair termination were refused on clean hands grounds due to the Claimant's production of a confidential letter, but the summary dismissal was converted to a normal termination with one month's salary in lieu of notice awarded

Reasoning

Although procedural fairness was lacking, the Claimant filed a confidential letter from the Permanent Secretary, Ministry of Energy to the Energy Regulatory Commission, obtained after she had left employment, with no explanation of how she accessed it. This soiled her hands under the equity maxim, defeating damages. The court nonetheless converted the summary dismissal to a normal termination and awarded notice pay.

p. 6

Legal principles established

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  • Where an employer fails to adhere to the express terms of a letter of appointment regarding confirmation at the end of probation, it is estopped from contending that the employee was never confirmed
  • Flexible working hours are a policy matter to be set in a policy document, not an arrangement to be agreed between an employee and a supervisor, and an undocumented arrangement is superseded by an entire-agreement clause in the written contract
  • An employer who fails to institute any performance management system lacks the moral authority to allege employee underperformance
  • Substantive justification for termination does not absolve the employer of the duty to follow fair procedure under Section 41 of the Employment Act

Court orders

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  1. 1.Payment of Kshs. 300,000 being one month's pay in lieu of notice
  2. 2.Payment for 7 days prorata leave
  3. 3.The Respondent to issue the Claimant with a certificate of service in the format set out in Section 51(2) of the Employment Act
  4. 4.Each party to bear their own costs

Authorities

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Legislation

  • Employment Act, 2007Section 41(1) and (2)
  • Employment Act, 2007Section 28(1)(b)
  • Employment Act, 2007Section 51(2)

Cases cited (2)

  • Kenya Science Research International Technical and Allied Workers Union (KSRITAWU) Vs Stanley Kinyanjui and Magnate Ventures Ltd
    Industrial Court Cause No. 273 of 2010
  • Anne Atieno Sadieda Vs Lavage Laundrette & Drycleaners
    2011 eKLR
Jurisdiction invoked
Employment and labour relations dispute adjudicated under the Industrial Court's jurisdiction (Employment Act, 2007 invoked for remedies)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (22)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "AGNES YAHUMA DIGO V PJ PETROLEUM EQUIPMENT LIMITED [2013] KEELRC 503 (KLR)", Case Analysis (2013). Cause 2049 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/503/eng@2013-02-21

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