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ELRCPartially AllowedCause No. 425 of 2014· [2015] KEELRC 68 (KLR)

Henry Tanui v Ecobank Kenya Limited [2015] KEELRC 68 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
14 December 2015
2,092 words in judgment
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The bottom line

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Kenya's Employment Court awarded an Ecobank manager 12 months' salary because the bank fired him without giving a valid reason or a fair hearing.

What this practically means

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Executive summary

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Henry Tanui, formerly Country Risk Manager of Ecobank Kenya Limited employed from January 2009 and confirmed on 4th August 2009, sued for compensation for unfair and unlawful termination following the termination of his employment on 17th February 2014 by a letter invoking the probation-period notice clause and giving no reason. He sought a declaration of unfair termination, salary in lieu of notice, unpaid leave, 12 months' salary, pension benefits and a certificate of service, contending the termination breached sections 43, 45 and 5 of the Employment Act, Articles 27, 41 and 47 of the Constitution, and the Respondent's own HR policies. The Respondent maintained that the Claimant was terminated for non-performance following a fair 2013 appraisal which returned a low rating, and that he had declined an amicable separation he himself proposed. The court framed three issues: valid reasons, due process and remedies. It found the probation clause improperly invoked since the Claimant was a confirmed employee; that no reason was stated in the termination letter, flouting section 43; that the appraisal process was flawed and biased; and that no disciplinary process under section 41 was undertaken, rendering the termination unfair under section 45. The court awarded 12 months' salary of Kshs. 6,256,680/- plus costs and interest, but refused notice pay and leave claims as those were admitted to have been paid.

Key legal issues

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01

Whether there were valid reasons for the termination

Holding

No valid reasons were stated or proved; section 43 of the Employment Act was flouted as the termination letter gave no reason and only cited the notice clause.

Reasoning

The termination letter dated 17.2.2014 invoked only the notice clause and stated no reason for termination. The employer was duty-bound to prove reasons under section 43(1) and (2). Although the Respondent contended in evidence that termination was for non-performance following an appraisal, this was not stated at termination, and the appraisal itself appeared flawed and procedurally defective, with the purported independent assessor appearing to have pre-judged the matter.

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02

Whether due process was followed

Holding

No due process was followed; the Claimant was not taken through the disciplinary process envisaged under section 41 of the Employment Act.

Reasoning

Section 41 requires an employer, before terminating on grounds of misconduct, poor performance or incapacity, to explain the reasons to the employee and to hear and consider representations. The court found this process was not undertaken and the Claimant was not taken through the disciplinary process, rendering the termination unfair and nugatory under section 45(1) and (2).

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03

What remedies the Claimant is entitled to

Holding

The Claimant was awarded 12 months' salary as compensation for unlawful termination, plus costs and interest; notice pay and leave claims were refused as already paid.

Reasoning

Having found the termination unfair, the court awarded the maximum 12 months' gross salary compensation (12 x 521,390 = 6,256,680/-). However, since the Claimant admitted being paid one month's salary in lieu of notice and that leave was not taken, nothing was awarded on those heads. The award attracts interest at court rates from the date of judgment.

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Legal principles established

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  • An employer bears the burden of proving the reason or reasons for termination, failing which the termination is deemed unfair under section 45 of the Employment Act.
  • Where termination is on grounds of poor performance, the employer must explain the reasons to the employee and hear and consider the employee's representations before termination.
  • Once probation has lapsed and the employee is confirmed, invoking a probation-period termination clause is improper.

Court orders

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  1. 1.Award of 12 months' salary as compensation for unlawful termination of Kshs. 6,256,680/-
  2. 2.Costs of the suit to the Claimant
  3. 3.Interest on the amount awarded at court rates from the date of judgment

Authorities

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Legislation

  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 43 (1) & (2)
  • Employment Act, 2007Section 41 (1) & (2)
  • Constitution of Kenya, 2010Article 41 (1)
  • Constitution of Kenya, 2010Article 47 (1) and (2)
  • Constitution of Kenya, 2010Article 27 (5)
  • Employment Act, 2007Section 5
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 41, 43, 45)

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, "Henry Tanui v Ecobank Kenya Limited [2015] KEELRC 68 (KLR)", Case Analysis (2015). Cause No. 425 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/68/eng@2015-12-14

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