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ELRCPartially AllowedCause No. 1207 of 2011· [2015] KEELRC 758 (KLR)

Elizabeth Nzanga Kisio v Equity Bank Ltd [2015] KEELRC 758 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
10 July 2015
MNMathews Nderi Nduma
2,119 words in judgment
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The bottom line

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A Kenyan court awarded a banker 10 months' salary after Equity Bank fired her without a hearing, ruling poor performance claims didn't hold up.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank on 11th March 2009 as a Marketing Officer and confirmed in September 2009, was summarily dismissed on 27th May 2011 on grounds of poor performance and attitude, failed coaching, and loss of confidence. She contended the real reason was her refusal to take up ESOP shares, evidenced by her exemplary appraisals, salary raises, December 2010 bonus, and the 6th May 2011 promotion and raise lavishing praise on her performance weeks before dismissal. The respondent maintained she had underperformed and had signed ESOP acceptance terms on 5th May 2011. The court framed two issues: the true cause of the dismissal and the fairness of the procedure. It found that the record of confirmation, raises, bonus and promotion indicated good performance, that no correspondence showed sudden poor performance after 6th May 2011, and that the claimant's reluctance to buy shares was the logical cause of her 'sudden fall from grace'. On procedure, the respondent gave no show-cause notice, no hearing, and levelled no charges, contrary to the mandatory requirements of section 41 of the Employment Act, 2007. The dismissal was held wrongful and unfair under section 45, and the claimant was awarded ten months' salary (Kshs 832,000) under section 49, a certificate of service, interest at court rates, and costs. Reinstatement was not granted, and notice pay and May 2011 salary were not awarded as they were not pleaded.

Key legal issues

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01

True cause of the summary dismissal

Holding

The dismissal was prompted by the claimant's reluctance to take up ESOP shares, not poor performance, as shown by the recent praise, promotion, salary raise and bonus

Reasoning

The court found that confirmation after probation, an April 2010 appraisal with salary raise, a December 2010 bonus and the 6th May 2011 promotion and raise demonstrated good performance. No correspondence between 6th May and 27th May 2011 showed sudden poor performance. Production of stale warnings from 2009-2010 undermined rather than supported the respondent's case. The court accepted the claimant's evidence that she fell out of favour on declining the shares, and found RW1's denial unconvincing.

p. 4
02

Fairness of the dismissal procedure

Holding

The summary dismissal was procedurally unfair and substantively unjustified under sections 41 and 45 of the Employment Act

Reasoning

The respondent gave no show-cause letter, granted no opportunity to be heard, and levelled no formal charges; the claimant learned the reasons only after dismissal. Section 41 of the Employment Act, 2007 is mandatory and requires a hearing before summary dismissal for misconduct or poor performance. On a balance of probability the claimant demonstrated the dismissal was wrongful and unfair contrary to section 45(1)(c) as read with 45(2)(a) and (c), entitling her to compensation under section 49.

p. 5

Legal principles established

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  • Section 41 of the Employment Act, 2007 is mandatory; an employer intending to summarily dismiss an employee for misconduct or poor performance must first hear and consider the employee's representations.
  • A summary dismissal without a show-cause letter, hearing, or formal charges is procedurally unfair even where poor performance is alleged.

Court orders

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  1. 1.The Respondent is to pay the Claimant Kshs 832,000 being 10 months' salary for the unlawful and unfair summary dismissal
  2. 2.The award is payable with interest at court rates from the date of the judgment till payment in full
  3. 3.Respondent is to provide the Claimant with a certificate of service within 14 days from date of the judgment
  4. 4.The Respondent is to pay the costs of the suit

Authorities

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Legislation

  • Employment Act, 2007section 41
  • Employment Act, 2007sections 44(3) and (4)
  • Employment Act, 2007sections 45(1)(c), 45(2)(a) and (c)
  • Employment Act, 2007sections 49(1) and 49(4)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007)

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, "Elizabeth Nzanga Kisio v Equity Bank Ltd [2015] KEELRC 758 (KLR)", Case Analysis (2015). Cause No. 1207 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/758/eng@2015-07-10

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