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ELRCPartially AllowedCause No. 1232 of 2014· [2015] KEELRC 191 (KLR)

Pooroosotum Bheekhoo v Linksoft Group [2015] KEELRC 191 (KLR)

Employment and Labour Relations Court of Kenya
22 October 2015
8,760 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ordered an employer to pay a former executive over $170,000 in unpaid salary and benefits, ruling that claims of poor performance must be proven with real performance management.

What this practically means

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Executive summary

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The claimant, a Mauritian telecommunications specialist, was employed by the respondent on 1st July 2011 on a three-year fixed-term contract as Group Regional Head - West Africa at USD 14,000 per month, plus an annual variable performance-linked pay at 18% of base pay and a further variable pay at up to 100% of target, together with unquantified benefits including company housing, children's education, medical and life insurance. He was confirmed after probation as Chief Projects and Services Officer. His salaries went unpaid from May 2012 and he resigned by letter dated 28th September 2012 giving three months' notice to 31st December 2012; the respondent accepted the resignation unconditionally but asked him to exit earlier, on 1st November 2012. The court framed four issues: identity of the employer, violation of the claimant's employment rights, entitlement to salaries and benefits, and interest. It held that the respondent, as part of the Linksoft Group umbrella, was a proper party and the employer. The respondent's defence of poor performance failed: the claimant was never appraised, no written KPIs or warnings existed, and the respondent's own witness attributed losses to external factors. The court found the non-payment of salary and variable pay to be an unfair labour practice and breach of contract. The alleged reduction of the notice period to one month was not consented to in writing, so salaries were computed at seven months, not five. Rent and leave pay were awarded as unqualified contractual benefits. However, the school fees claim failed because the fees had already been paid in full, and claims for constructive dismissal and moral damages failed for want of pleading; the respondent's claim for a laptop and phone failed as no counterclaim was filed. Judgment was entered for the claimant for leave, seven months' salary, both variable pay heads and rent, with interest at court rates from 31st December 2012, payment in USD subject to statutory deductions, plus costs of the suit.

Key legal issues

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01

Identity of the employer

Holding

The Respondent (Linksoft Group) was a proper party and the employer notwithstanding that the contract referenced Linksoft International Mauritius Ltd, since the group umbrella could not be extricated from the employment

Reasoning

The court examined the contract drawn under the banner of Linksoft Group, the work permit, school fees invoices and communications all issued under Linksoft Group. The respondent's own witness confirmed the group structure with multiple entities. Separating the Respondent from the contracting entity to deny responsibility would amount to an unfair labour practice. Section 13 of the Employment Act places the duty to effect changes in contract particulars on the employer, not the employee.

p. 7
02

Whether the defence of poor performance could justify non-payment of salary and variable pay

Holding

No - the employer failed to appraise, set targets or address performance concerns during employment; the poor performance defence was an afterthought and the non-payment was an unfair labour practice and breach of contract

Reasoning

Once an employee is confirmed after probation, the employer is taken to have assessed and appreciated the employee's competence. An employer alleging poor performance must prove it, showing standards, support and time to improve. Here there was no record of assessment by the CEO, no warnings, and no written KPIs after the role change. The witness admitted external factors caused losses and could not attribute them to the claimant. Varying contract terms to deny variable pay on poor performance and low finances was unacceptable.

p. 9
03

Whether the notice period was reduced to one month by agreement

Holding

No - the alleged reduction of the notice period was not consented to in writing by the claimant; the ambiguity benefits the claimant, so salaries were computed at 7 months not 5

Reasoning

The claimant gave 3 months' notice ending 31st December 2012 per his contract. The respondent's letter of 1st November 2012 asserting an earlier exit was not acknowledged by the claimant. Where an essential term changes, mutual written consent is required under section 13 of the Employment Act. The mistake of failing to reduce any agreement into writing should not be visited upon the claimant; he offered to serve his notice and should be paid for it.

p. 10
04

Benefits: rent and school fees

Holding

Rent arrears up to 31st December 2012 were due as an unqualified contractual benefit; the school fees cap of Kshs.300,000 per child was unsupported by any policy, but the school fees claim itself failed as the fees were already paid in full

Reasoning

The contract provided company house and children's education as open benefits with no conditions. No policy limiting school fees was attached to the contract or brought to the claimant's attention. Rent paid by the claimant in cash or personal effects should be reimbursed. However, the court found from the claimant's own annexures that school fees were fully paid by 25th September 2013, so awarding $19,179 would be double payment, though costs were awarded due to the delay in payment.

p. 11
05

Interest on the dues

Holding

Interest at court rates was awarded from 31st December 2012 (last day of employment) until payment in full

Reasoning

The respondent admitted owing salaries and retained the dues while blaming the claimant for poor performance, which the court found to be an unfair labour practice. The offer to pay in instalments was rejected and the respondent sat back and waited, frustrating the former employee. The claimant was paid by direct bank deposit in USD, and since he left Kenya with his work permit cancelled, the dues were to be paid in United States Dollars.

p. 11
06

Unpleaded claims for constructive dismissal and moral damages

Holding

The claims failed as they were not pleaded; pleadings must define the case so the other party is not ambushed

Reasoning

Though the claimant testified he was forced to resign and suffered moral damage including his father's death, these heads were not in the memorandum of claim. The court noted the absence of the omnibus prayer under section 12(3)(viii) of the Employment and Labour Relations Court Act which would have invited the court's discretion. The court applied authorities on the fatal effect of unpleaded claims.

p. 12

Legal principles established

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  • An employer alleging poor performance bears the burden of proving it, including demonstration of performance standards, support and opportunity to improve
  • The duty to set policy guidelines, measurable targets and performance indicators is upon the employer
  • Changes to essential terms of a contract of employment require mutual written consent and cannot be unilateral
  • Benefits under a contract without attached conditions come as given; an employer cannot impose unstated policy limits after the fact
  • A claim against a claimant must be raised by way of counterclaim to be awardable

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent
  2. 2.Award of 13 days leave at $7,583.00
  3. 3.Award of 7 months' salary $98,000.00
  4. 4.Award of annual variable (performance linked pay target) for 5 quarters $30,240.00
  5. 5.Award of annual variable (performance link) pay for 5 quarters $37,800.00
  6. 6.Award of house rent $6,297.07
  7. 7.Interest at court rates on the awarded amounts from 31st December 2012 until payment in full
  8. 8.All amounts subject to statutory deductions under section 49(2) of the Employment Act
  9. 9.Payment to be made in United States Dollars
  10. 10.Claimant awarded costs of the suit

Authorities

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Legislation

  • Employment Actsection 9(1)-(3)
  • Employment Actsection 13(1)
  • Employment Actsection 42
  • Employment Actsection 43
  • Employment Actsection 49(2)
  • Employment Actsections 10 and 12
  • Employment and Labour Relations Court Actsection 12(3)(viii)

Cases cited (10)

  • Jane Samba Mkala versus Ol Tukai Lodge Limited
    Cause No.823 of 2010
  • Agnes Yahuma Digo versus PJ Petroleum Equipment Ltd
    Cause No.2049 of 2011
  • Simon Muguku Gichingi versus Taifa Society Ltd
    Cause No.681 of 2012
  • Frederick Owegi versus CFC Life Assurance
    Cause No.1001 of 2013
  • Jane Frances Ominde Munyakoh versus Imaging Solutions Limited
    Cause No.1491 of 2011
  • Mariana Onica and Another versus Sky Aero Limited
    Cause No.1815 of 2014
  • Emmanuel Mutisya Solomon versus Agility Logistics
    Cause No.1448 of 2011
  • Nathan O Atiagaga versus Davis Engineering Ltd
    Cause No.419 of 2014
  • Thomas Mbiya Odundo versus the Managing Director, Add Sales Limited & Another
    Cause No.861 of 2012
  • Catherine Wanja Njeru versus Kenya Post Office Savings Bank
    Cause No.53 of 2011
Jurisdiction invoked
Employment and Labour Relations Court Act, section 12; Employment Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "Pooroosotum Bheekhoo v Linksoft Group [2015] KEELRC 191 (KLR)", Case Analysis (2015). Cause No. 1232 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/191/eng@2015-10-22

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