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ELRCPartially AllowedCause No 1536 of 2012· [2016] KEELRC 1465 (KLR)

Philip Chege Karanja v MTN Business (K) Limited [2016] KEELRC 1465 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
26 February 2016
1,261 words in judgment
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The bottom line

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Kenya's Employment Court ruled MTN unfairly fired a Credit Manager for poor performance without proving it or giving him a proper hearing, awarding over Kshs.1 million.

What this practically means

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Executive summary

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The claimant, employed by the respondent (formerly UUNET (Kenya) Limited) from 15th April 2004 and promoted to Credit Manager on 1st December 2008, sued for compensation for unlawful termination of his employment on 1st November 2011. The termination letter cited poor performance, referring to verbal warnings with no details. The claimant sought a declaration that the termination was unlawful, one month's salary in lieu of notice, compensation of Kshs.2,888,147.36, and costs. The respondent admitted terminating on grounds of performance but asserted the claimant was given an opportunity to defend himself. The court framed two issues: whether the termination was justifiable and fair, and entitlement to remedies. Applying KSRITAWU v Kinyanjui and Magnate Ventures Ltd, the court held that an employer relying on poor performance must prove it and demonstrate opportunities given to improve. Evidence showed the claimant had been a consistently good employee whose performance allegedly declined in 2011, yet the employer made no effort to investigate or assist remediation. Section 41 of the Employment Act covers poor performance, requiring a capability hearing, and there was no evidence the claimant was heard before the decision was made. The court found the termination substantively and procedurally unfair, awarding 7 months' salary (Kshs.937,216) as damages plus one month's salary in lieu of notice (Kshs.133,888), totaling Kshs.1,071,104, with costs to the claimant and interest at court rates from the date of award until payment in full.

Key legal issues

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01

Validity of the reason for termination (poor performance)

Holding

No valid reason was established; the termination was substantively unfair

Reasoning

The termination letter cited poor performance with reference only to verbal warnings without details. The claimant had positive prior appraisals and was previously among the best employees. A warning is a disciplinary action, not a remedial measure, and the employer failed to prove poor performance or assist the employee.

p. 3
02

Procedural fairness under Section 41 of the Employment Act

Holding

Termination was procedurally unfair as no capability hearing was held

Reasoning

Section 41 procedural fairness covers poor performance. The decision to terminate had already been made before the claimant sought a meeting, and there was no evidence he was given an opportunity to respond to allegations of poor performance or misconduct. The court restricted itself to the ground in the termination letter.

p. 3
03

Entitlement to remedies

Holding

Claimant awarded 7 months' salary as compensation plus one month's salary in lieu of notice

Reasoning

Having found the termination substantively and procedurally unfair, the court exercised its discretion under the remedies framework, considering the claimant's length of service (since 2004) and the respondent's conduct in the termination process, awarding 7 months' salary rather than the 12 sought.

p. 3

Legal principles established

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  • An employer relying on poor performance must prove its existence and demonstrate opportunities given to the employee to improve
  • Where a consistently good employee's performance suddenly dips, the employer must investigate why and assist the employee to take remedial measures
  • Disciplinary action based on poor performance must be preceded by a capability hearing under Section 41 of the Employment Act

Court orders

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  1. 1.7 months' salary (Kshs.937,216) as damages for unlawful termination
  2. 2.1 month's salary in lieu of notice (Kshs.133,888), total award Kshs.1,071,104
  3. 3.Claimant awarded costs of the case
  4. 4.Award to attract interest at court rates from the date of the award until payment in full

Authorities

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Legislation

  • Employment Act, 2007Section 41

Cases cited (1)

  • Kenya Science Research International Technical and Allied Workers Union (KSRITAWU) v Stanley Kinyanjui and Magnate Ventures Ltd
    Cause No. 273 of 2010
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 and the Labour Relations Act (first-instance employment cause)

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, "Philip Chege Karanja v MTN Business (K) Limited [2016] KEELRC 1465 (KLR)", Case Analysis (2016). Cause No 1536 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1465/eng@2016-02-26

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