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ELRCPartially AllowedCause No. 566 of 2015 (Consolidated)· [2018] KEELRC 2445 (KLR)

James Mburu Chege & another v Kenyacam Limited & another [2018] KEELRC 2445 (KLR)

Employment and Labour Relations Court
16 February 2018
2,793 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled that firing employees for poor performance without a fair, participatory process is unfair and deserving of compensation.

What this practically means

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Executive summary

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This is a consolidated first-instance claim by James Mburu Chege and Joseph Njagi Mugo against Kenyacam Limited and Camusat Kenya Limited (the same entity following a change of name), both formerly employed as Riggers and later Field Technicians, terminated by letters dated 30th September 2015 on grounds of negligence and unsatisfactory work performance. The Claimants sought notice pay, house allowance, overtime, service pay, twelve months' compensation and certificates of service, alleging malicious and procedurally flawed terminations. The Respondents maintained the terminations followed a performance notice issued on 1st September 2015 and a performance review meeting on 30th September 2015, and that terminal dues were paid. The court framed two issues: the lawfulness and fairness of the terminations, and entitlement to remedies. It held that Section 41 of the Employment Act applies fully to poor-performance terminations; that the performance notices were mere aspirations rather than measurable targets; and that the performance review meeting, held the same day as termination and without evidence of the Claimants' participation, was indistinguishable from a disciplinary hearing. The terminations were found unjustifiable and unprocedural. Each Claimant was awarded eight months' salary - Kshs. 264,000 and Kshs. 320,000 respectively - with interest at court rates from the date of judgment until payment in full. Claims for house allowance, notice, service pay and overtime were dismissed for lack of proof or by reason of salary consolidation. The Claimants were granted certificates of service and costs.

Key legal issues

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01

Whether termination on grounds of poor performance was lawful and fair

Holding

The termination was unjustifiable and unprocedural; the performance notices were mere aspirations, and the review meeting did not involve the Claimants' participation, breaching Section 41 of the Employment Act.

Reasoning

Poor performance is a valid ground for termination, but Section 41 procedural fairness applies. The performance notices contained only general statements and aspirations, not measurable shortcomings or targets against which performance could be gauged. The review meeting held on 30th September 2015, the same day as termination, produced no evidence of the Claimants' participation by comments or signatures, and was indistinguishable from the disciplinary hearing. Termination was therefore unjustifiable and unprocedural.

p. 6
02

Whether the Claimants were entitled to compensation and what quantum

Holding

Each Claimant was awarded eight months' salary, taking into account length of service and the Respondents' conduct prior to termination.

Reasoning

Having found the termination unfair, the court exercised discretion under the remedies framework, considering the Claimants' length of service and the Respondents' conduct prior to termination, and awarded eight months' salary each, translating to Kshs. 264,000 and Kshs. 320,000 respectively.

p. 6
03

Whether the Claimants were entitled to house allowance

Holding

The claim failed because the reviewed contracts consolidated gross salaries inclusive of house allowance, which the Claimants acceded to without objection.

Reasoning

Section 31(1) and (2) of the Employment Act obliges an employer to provide housing or rent unless the contract consolidates a housing element into the salary. The contracts reviewed on 1st May 2013 provided gross monthly salaries ordinarily inclusive of house allowance, and although the Claimants alleged lack of consultation, there was no evidence of any objection before filing suit.

p. 6

Legal principles established

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  • The procedural fairness requirements of Section 41 of the Employment Act, 2007 apply fully to terminations on grounds of poor performance; the employer must point out shortcomings and allow reasonable time to improve.
  • An appraisal of an employee's performance must involve the active participation of the employee.
  • Where an employee's contract of service consolidates a housing element into the gross salary, Section 31(2) of the Employment Act disapplies the employer's obligation to provide or pay for housing.

Court orders

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  1. 1.Judgment entered in favour of the Claimants: Kshs. 264,000 for the 1st Claimant, James Mburu Chege, being eight (8) months' salary for unlawful and unfair termination of employment
  2. 2.Judgment entered in favour of the 2nd Claimant, Joseph Njagi Mugo, in the sum of Kshs. 320,000, being eight (8) months' salary for unlawful and unfair termination of employment
  3. 3.The awards to attract interest at court rates from the date of delivery of the judgment until payment in full
  4. 4.The Claimants to be issued with certificates of service
  5. 5.The Claimants awarded the costs of the case

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSections 31(1) & (2)
  • Companies ActChange of Name provisions

Cases cited (2)

  • Kenya Science Research International Technical and Allied Workers Union (KSRITAWU) v Stanley Kinyanjui and Magnate Ventures Ltd
    Cause No 273 of 2010
  • Jane Wairimu Machira v Mugo Waweru and Associates
    [2012] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court (employment claims under the 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, "James Mburu Chege & another v Kenyacam Limited & another [2018] KEELRC 2445 (KLR)", Case Analysis (2018). Cause No. 566 of 2015 (Consolidated). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2445/eng@2018-02-16

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