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ELRCPartially AllowedCause No 1271 of 2013· [2018] KEELRC 254 (KLR)

Eddah Anyango Akumu v AAR Insurance Kenya Limited [2018] KEELRC 254 (KLR)

Employment and Labour Relations Court
19 December 2018
HWHellen Wasilwa
4,694 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 awarded 12 months' salary to an employee fired without valid reasons or a fair hearing, ruling her employer ignored its own procedures.

What this practically means

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Executive summary

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Eddah Anyango Akumu, formerly a procurement officer employed on permanent and pensionable terms, sued AAR Kenya Limited for wrongful and unfair termination following the termination of her employment by letter dated 18th June 2014, citing negative attitude towards performance management and insubordination. She sought declarations of unfair termination and breach of Article 41 of the Constitution, plus substantial reliefs including 21 years' salary to retirement age, notice pay, June 2014 salary, accrued leave, pension contributions, and a non-prejudicial Certificate of Service. The Respondent maintained that the Claimant's performance was wanting, that she was warned twice, and that the termination was fair under Section 41 of the Employment Act. The court framed three issues: valid reasons, opportunity to be heard, and entitlement to reliefs. It found the Respondent failed to discharge its Section 43 burden of proving valid reasons, as the grounds of 'poor attitude' and insubordination were never substantiated. The court further held the Respondent ignored its own Human Resource Manual by terminating the Claimant before the prescribed three-month Performance Improvement Plan period elapsed, and that no fair disciplinary process under Section 41 was conducted - the Claimant was condemned unheard. The termination was therefore unfair and unjustified. The court awarded 12 months' gross salary (KShs. 1,899,804) as compensation, holding the remaining prayers for future earnings and pension untenable since terminal dues had been paid, and ordered costs plus interest at court rates from the date of judgment.

Key legal issues

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01

Valid reasons for termination

Holding

The Respondent failed to prove valid reasons; the grounds of 'negative attitude' and 'insubordination' were not substantiated with facts

Reasoning

The termination letter cited negative attitude towards performance management and insubordination, but the court found the parameters of the 'poor attitude' were never set out, and the acts of insubordination were not explained to the court. Some annual targets had been met by April 2014, and delay in the BSC submission was not the Claimant's fault. Under Section 43, the employer must prove the reasons, and failure rendered the termination unfair.

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02

Procedural fairness under Section 41 of the Employment Act

Holding

No fair hearing or disciplinary process was accorded; the Claimant was condemned unheard

Reasoning

There was no letter inviting the Claimant to a disciplinary hearing and no minutes of any disciplinary process. The Respondent also ignored its own HR Manual, which provided for a three-month Performance Improvement Plan with milestones and review; the Claimant was instead warned within a day of the PIA and terminated before three months elapsed, without the promised support.

p. 6
03

Remedies for unfair termination

Holding

Compensation of 12 months' gross salary awarded; other prayers refused

Reasoning

Terminal dues (notice pay, June salary, leave, pension) had been paid as admitted, so only compensation under Section 49 remained. The court exercised discretion to award the equivalent of 12 months' gross salary (KShs. 1,899,804), holding the remaining prayers for future earnings and pension contributions to be untenable.

p. 6

Legal principles established

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  • The employer bears the burden of proving valid reasons for termination, failing which the termination is deemed unfair
  • An employer must follow its own internal performance improvement and disciplinary procedures, including the prescribed review period and a fair hearing under Section 41 of the Employment Act
  • Performance improvement measures do not substitute for a fair disciplinary process; an employee condemned without a hearing is unfairly terminated

Court orders

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  1. 1.Award of 12 months' salary as compensation for unfair termination, KShs. 1,899,804
  2. 2.Respondent to pay costs of the suit
  3. 3.Interest on the award at court rates from the date of judgment

Authorities

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Legislation

  • Constitution of KenyaArticle 41
  • Employment Act 2007Sections 41(1), 41(2), 42(1), 43(1), 43(2), 44(3), 44(4), 45(2), 49(b)(k)
  • Employment Act (Cap 226)Section 41(1)

Cases cited (3)

  • Jane Samba Mukala vs. Ol Tukai Lodge
    Nairobi ELRC Cause No. 823 of 2010 [2013] eKLR
  • Everlyn Lynn Kagendo vs. Statpack Industries Limited
    Nairobi HCCC No. 2081 of 2011 [2013] eKLR
  • John Wafula Simiyu vs. The Star Publications Limited
    Kericho ELRCC No. 240 of 2015 [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Act; Employment Act 2007 (Sections 41, 43, 45, 49)

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, "Eddah Anyango Akumu v AAR Insurance Kenya Limited [2018] KEELRC 254 (KLR)", Case Analysis (2018). Cause No 1271 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/254/eng@2018-12-19

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