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ELRCPartially AllowedCause (Memorandum of Claim dated 6th July 2016; filed 8th July 2016)· [2018] KEELRC 2321 (KLR)

Mathew Wandera Akwiri v Habo Group of Companies Limited [2018] KEELRC 2321 (KLR)

Employment and Labour Relations Court
8 March 2018
1,607 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 ruled that probation cannot be quietly extended without a written agreement, and firing for poor performance requires warning the employee and giving a chance to improve.

What this practically means

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Executive summary

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The Claimant sued Habo Group of Companies Limited for unfair termination of employment. He was employed as a Project Manager from November 2014 and his employment was terminated on 4th May 2015 on the ground of poor performance, at which point he had served about five months. The Respondent contended that the Claimant was still on probation, having never been confirmed in writing, and that his termination was proper after notifications and meetings; it closed its case without calling any witness. The Court framed three issues: probation status, lawfulness and fairness of the termination, and entitlement to remedies. On probation, the Court held that extension of probation by default is untenable: Section 2 of the Employment Act requires a probationary contract to be in writing, and extension of probation is an adverse managerial action requiring a prior participatory performance appraisal, none of which existed; further, the termination letter admitted one month's notice pay inconsistent with probationary status. On fairness, although poor performance is a lawful ground, it must be established through due process; no negative appraisal report was produced and the Claimant was not taken through a capability hearing under Section 41 of the Employment Act. The Respondent's reliance on Section 45(3) failed as that provision had been declared unconstitutional in Samuel G. Momanyi v Attorney General. The Court found the termination substantively and procedurally unfair and awarded three months' salary in compensation, notice pay, in-house savings and prorata leave, totalling Kshs. 475,083 with interest, plus a certificate of service and costs. Claims for Sacco, NSSF and NHIF deductions were dismissed for lack of basis.

Key legal issues

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01

Whether the Claimant was on probation at the time of termination

Holding

The Claimant was no longer on probation; automatic or default extension of probation is not legally tenable, and no written extension or participatory performance appraisal preceded any extension.

Reasoning

Clause 7 of the contract provided for a 3-month probation extendable by up to 6 months. The Court held that Section 2 of the Employment Act requires a probationary contract to be in writing, and that extension of probation is an adverse managerial action requiring a prior participatory performance appraisal. No written extension or appraisal existed. Further, the termination letter admitted one month's notice pay, inconsistent with probationary status.

p. 3
02

Whether termination for poor performance was lawful and fair

Holding

The termination was substantively and procedurally unfair. No negative appraisal report was produced, and the Claimant was not taken through a capability hearing under Section 41 of the Employment Act.

Reasoning

Although poor performance is a lawful ground for termination, it must be established through due process: the employee must be alerted to the poor performance and given a chance to improve. The Respondent closed its case without calling any witness and adduced no negative appraisal report, and no capability hearing under Section 41 was conducted before termination.

p. 4
03

Whether Section 45(3) of the Employment Act bars a claim by an employee who served less than 13 months

Holding

The Court was persuaded that Section 45(3) of the Employment Act was declared unconstitutional in Samuel G. Momanyi v Attorney General, and therefore the Claimant's claim was properly before the Court.

Reasoning

The Respondent argued in final submissions that a Claimant with less than 13 months' service is barred by Section 45(3) from claiming unfair termination. The Court, persuaded by Lenaola J's decision in Samuel G. Momanyi v Attorney General & another [2012] eKLR in which the provision was declared unconstitutional, held the claim was properly before it.

p. 3

Legal principles established

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  • Extension of probation by default is not tenable; a probationary contract must be in writing and extension of probation, being an adverse managerial action, requires a prior participatory performance appraisal.
  • Termination on grounds of poor performance requires the poor performance to be brought to the employee's attention with an opportunity to improve, and a capability hearing under Section 41 of the Employment Act.

Court orders

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  1. 1.Judgment entered in favour of the Claimant: 3 months' salary in compensation Kshs. 330,000; 1 month's salary in lieu of notice Kshs. 110,000; In-house savings Kshs. 3,000; Prorata leave for 5 months Kshs. 32,083; Total Kshs. 475,083
  2. 2.The decretal amount to attract interest at court rates from the date of judgment until payment in full
  3. 3.The Claimant to be issued with a certificate of service
  4. 4.The Respondent to pay the costs of the case

Authorities

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Legislation

  • Employment ActSection 2
  • Employment ActSection 45(3)
  • Employment ActSection 41

Cases cited (4)

  • Jane Wairimu Machira v Mugo Waweru and Associates
    [2012] eKLR
  • Samuel G. Momanyi v Attorney General & another
    [2012] eKLR
  • Kenya Science Research International Technical and Allied Workers Union (KSRITAWU) v Stanley Kinyanjui and Magnate Ventures Ltd
    Cause No. 273 of 2010
  • Lilian O. Ochang v Kenol Kobil Limited
    [2015] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (claim for unfair termination)

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, "Mathew Wandera Akwiri v Habo Group of Companies Limited [2018] KEELRC 2321 (KLR)", Case Analysis (2018). Cause (Memorandum of Claim dated 6th July 2016; filed 8th July 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2321/eng@2018-03-08

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