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ELRCPartially AllowedCause (Memorandum of Claim dated 22/12/2015 - number not stated in judgment)· [2019] KEELRC 434 (KLR)

Carolyne Lagat Cheptumo v Jamii Bora Bank Limited [2019] KEELRC 434 (KLR)

Employment and Labour Relations Court
16 October 2019
HWHellen Wasilwa
3,159 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that a bank wrongly fired its branch manager because her probation had expired without her consent, awarding her nearly Kshs. 3 million.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent bank on 11/3/2015 as Funzi Road Branch Manager on permanent and pensionable terms with a three-month probation, was terminated on 24/8/2015 on allegations of poor performance and lack of leadership. She claimed the termination was without notice, hearing or valid reasons, and sought a declaration of unfair termination, reinstatement or Kshs. 67 million in lieu, and special damages. The Respondent maintained she was still on probation, that Section 42 of the Employment Act governed, and that she had admitted poor performance at appraisal. The court found that the contractual probation ended on 15/6/2015; under Section 42(2) any extension required the employee's agreement, and the appraisal document relied on was signed by the Claimant on 13/7/2015 before the supervisor signed on 15/7/2015, so there was no agreement extending probation. She therefore ceased to be on probation after 15/6/2015, and termination required compliance with Section 41. She was dismissed without an opportunity to defend herself and was not given a chance to demonstrate the absence of the performance reasons cited. The court declared the termination unfair and unjustified under Section 45(2). Awarding remedies, the court granted one month's salary in lieu of notice (Kshs. 223,571), maximum 12 months' compensation (Kshs. 2,682,852), and prorata leave of Kshs. 37,262, totalling Kshs. 2,943,685, with costs and interest at court rates from the date of judgment. Reinstatement and the larger claimed sums were not granted.

Key legal issues

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01

Whether the Claimant was on probation at the time of termination

Holding

She was not; the probation lapsed on 15/6/2015 and the purported unilateral extension was ineffective

Reasoning

Clause 4 of the contract provided for a 3-month probation ending 15/6/2015. Section 42(2) permits extension only with the employee's agreement. The appraisal document was signed by the Claimant on 13/7/2015 before the supervisor signed on 15/7/2015, so there was no discussion or agreement extending probation. The Respondent's silence after 15/6/2015 indicated she was no longer on probation.

p. 4
02

Whether the termination procedure was fair

Holding

It was not; the Claimant was dismissed without an opportunity to be heard contrary to Section 41

Reasoning

Section 41 requires the employer to explain reasons for termination and hear the employee's representations, with a chosen companion present. The Claimant was not given a notice to show cause, was not heard, and was not given the opportunity to respond to the performance-related allegations. The purported probation protections did not apply since she was no longer on probation.

p. 4
03

Whether valid and fair reasons for termination were established

Holding

No; the Respondent failed to establish valid reasons under Section 45(2), rendering the termination unfair and unjustified

Reasoning

The termination letter cited performance-related reasons, but the Claimant was never given an opportunity to demonstrate the presence or absence of those reasons. Section 45(2) requires the employer to prove both a valid and fair reason and fair procedure; the Respondent failed on both limbs.

p. 4
04

What remedies flow from the unfair termination

Holding

One month's salary in lieu of notice, maximum 12 months' compensation under Section 49, and prorata leave, totalling Kshs. 2,943,685

Reasoning

Having found the termination unfair, the court exercised its powers under Section 49 to award notice pay, the maximum 12 months' compensation (12 x 223,571), and prorata leave for 4 months (4/24 x 223,571), with costs and interest. Reinstatement and the claimed prospective earnings of Kshs. 67 million were not granted.

p. 5

Legal principles established

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  • A probationary period under Section 42(2) of the Employment Act may only be extended with the agreement of the employee
  • Once the probationary period lapses without an agreed extension, the employee ceases to be on probation and termination must comply with Section 41 of the Employment Act
  • An employer terminates employment unfairly where it fails to prove a valid and fair reason and fair procedure under Section 45(2) of the Employment Act

Court orders

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  1. 1.Payment of 1 month's salary in lieu of notice of Kshs. 223,571
  2. 2.Payment of maximum 12 months' salary as compensation for unlawful and unfair termination, Kshs. 2,682,852
  3. 3.Payment of prorata leave for 4 months, Kshs. 37,262
  4. 4.Total award of Kshs. 2,943,685
  5. 5.Respondent to pay costs of the suit plus interest at court rates from the date of the judgment

Authorities

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Legislation

  • Employment Act 2007Section 41
  • Employment Act 2007Section 42 (including 42(1), 42(2) and 42(3))
  • Employment Act 2007Section 43
  • Employment Act 2007Section 45 (including 45(2))
  • Employment Act 2007Section 49 (including 49(3) and 49(4))
  • Employment and Labour Relations Court ActSection 12(3)(vii)
  • Constitution of Kenya 2010Article 47

Cases cited (8)

  • Frank Zawadi Wanjala Mudibo & 5 others –v- Zircon Group Limited
    [2016] eKLR
  • Benjamin Nyambati Ondibe –v- Egerton University
    [2014] eKLR
  • Kenya Union of Commercial Food & Allied Workers v Meru North Farmers Sacco Limited
    Cause No. 74 of 2013
  • Kenya Union of Printing, Publishing, Paper Manufacturers & Allied Workers v Timber Treatment International Limited
    [2013] eKLR
  • Beatrice Achieng Osir –v- Board of Trustees Teleposta Pension Scheme
    Cause 665 of 2011
  • John Muthomi Mathiu –v- Mastermind Tobacco (K) Limited
    [2018] eKLR
  • Danish Jalang’o & another –v- Amicabre Travel Services Limited
    [2014] eKLR
  • Kenya Chemical & Allied Workers Union v National Cement Company Limited
    [2014] eKLR
Jurisdiction invoked
Original jurisdiction under the Employment Act 2007 and the Employment and Labour Relations Court Act (Section 12 invoked by Respondent on reinstatement)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Carolyne Lagat Cheptumo v Jamii Bora Bank Limited [2019] KEELRC 434 (KLR)", Case Analysis (2019). Cause (Memorandum of Claim dated 22/12/2015 - number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/434/eng@2019-10-16

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