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Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No 1649 of 2013· [2014] KEELRC 1346 (KLR)

Daniel Mbuthi v Express Automation Limited [2014] KEELRC 1346 (KLR)

Industrial Court of Kenya
17 October 2014
1,193 words in judgment
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The bottom line

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Kenya's Industrial Court ruled that firing an employee for poor performance without explaining the problems and giving them a chance to improve is unfair and must be compensated.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a Driver on a two-year contract from 2nd January 2013 at a gross monthly salary of Kshs. 16,000, claimed compensation for unfair termination. He was issued two warning letters (for improper uniform and absenteeism) before being terminated verbally on 17th August 2013, with a written termination letter of 30th August 2013 citing failure to meet company expectations. He sought unpaid August salary, compensation, salary for the unexpired 16 months of his contract, notice pay, and leave allowance. The Respondent denied unlawful termination, asserting the Claimant absconded duty (a matter reported to Police) and that all dues were paid; it also contended that his probation had been extended and that a confirmation letter signed by Director Archith Rao was not properly issued. The Court found the termination was for poor performance and that the Respondent failed to follow the mandatory procedure under Section 41 of the Employment Act, 2007, rendering the termination unfair for want of due process. Relying on the KSRITAWU v Kinyanjui authority, the Court held an employer must point out shortcomings and allow improvement over a reasonable period. It found the Claimant had been confirmed by the Rao letter since no forgery was proved and the probation extension was never communicated. The Court awarded two months' salary in compensation, one month's notice pay and prorata leave, totalling Kshs. 48,747, dismissed the unpaid salary and remainder-of-contract claims, awarded the Claimant costs, and interest on the award from the date of the award until payment in full.

Key legal issues

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01

Whether termination for poor performance without following Section 41 procedure was fair

Holding

Termination was unfair for want of due process

Reasoning

The termination letter cited failure to meet company expectations. Section 41 of the Employment Act, 2007 requires the employer to explain the reasons to the employee, allow a representative, and hear explanations. The employer did none of these and did not give the employee an opportunity to improve before terminating for poor performance.

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02

Whether the Claimant was still on probation as the Respondent contended

Holding

The Claimant was confirmed in his appointment by the letter signed by Rao and accepted on 16th July 2013

Reasoning

There was no proof of forgery of the Director's signature, the Director was not called to explain the circumstances of signing, and no evidence showed the decision to extend probation was ever communicated to the Claimant. The confirmation letter therefore stood.

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03

What remedies flow from the unfair termination

Holding

Two months' salary in compensation, one month's notice pay and prorata leave, totalling Kshs. 48,747

Reasoning

In exercising discretion the Court took into account the Claimant's length of service and employment record, awarding two months' salary in compensation plus notice pay and prorata leave, while rejecting the unpaid salary and remainder-of-contract claims.

p. 3

Legal principles established

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  • Termination for poor performance requires the employer to follow the procedure in Section 41 of the Employment Act, 2007, including explaining reasons to the employee and hearing their explanation
  • On poor performance, the employer must point out shortcomings and give the employee a reasonable opportunity to improve (2-3 months)
  • Performance is distinct from misconduct and requires a separate handling procedure
  • Salary for the remainder of a contract is a matter of specific performance, granted only in exceptional circumstances

Court orders

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  1. 1.Award of 2 months' salary (Kshs. 32,000) in compensation for unfair termination
  2. 2.Award of 1 month's salary in lieu of notice (Kshs. 16,000)
  3. 3.Award of prorata leave of Kshs. 747
  4. 4.Total award of Kshs. 48,747 to be paid by the Respondent
  5. 5.Respondent to meet the costs of the case
  6. 6.Award to attract interest at court rates from the date of the award until payment in full

Authorities

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Legislation

  • Employment ActSection 41

Cases cited (1)

  • Kenya Science Research International Technical and Allied Workers Union (KSRITAWU) Vs Stanley Kinyanjui and Magnate Ventures Ltd
    Cause No. 273 of 2010
Jurisdiction invoked
Jurisdiction over a dispute of employment and labour relations under the Industrial Court Act / Constitution Article 162(2)

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, "Daniel Mbuthi v Express Automation Limited [2014] KEELRC 1346 (KLR)", Case Analysis (2014). Cause No 1649 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1346/eng@2014-10-17

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