Joshua Mwaniki v Andela Kenya Limited [2020] KEELRC 653 (KLR)
The bottom line
#A Kenyan court awarded a former Andela Country Director KShs 9.29 million because the company dismissed him without a hearing or performance improvement plan.
What this practically means
#Executive summary
#Key legal issues
#Substantive justification for the termination
Poor performance was proved (overall score of 2), but the alleged bullying was not proved as no victim testified and RW1 had no evidence of it.
The respondent produced a performance review showing the claimant scored 2, below expectation, proving poor performance on a balance of probability. On the bullying allegation, no victim tendered evidence and RW1 admitted having no evidence of the alleged bullying, so that ground was not a valid and fair reason for dismissal.
Procedural fairness
Termination was procedurally unfair: no hearing under section 41 and no PIP as required by the Andela Exit Policy clause 5.6.
RW1 admitted the claimant was dismissed without any hearing as required by section 41 of the Employment Act and the Employee Handbook, and admitted he was never placed on a PIP contrary to the company's own regulations. These lapses meant the employer failed to prove a fair procedure, rendering the dismissal unfair and unlawful under section 45.
ESOP claim
Claimant not entitled to shares; he never exercised the option by signed exercise notice and payment, and forfeited it on dismissal for cause.
Clause 4.2 of the Stock Option Agreement required an exercise notice accompanied by full payment of the exercise price. The claimant admitted he never filled the requisite forms nor paid for the vested shares before or after dismissal. Rights also lapsed upon termination for cause, consistent with the South African authority in Vela v Efora Energy.
Defamation claim
Defamation not proved because the claimant failed to prove the defendant published or caused publication of the article.
Although the article's allegation of financial impropriety was false (the termination letter cited poor performance and misconduct), an essential ingredient of defamation—publication by the defendant—was not established since the article was published by Kahawa Tungu, a third party. General and exemplary damages therefore fail.
Legal principles established
#- An employer cannot terminate an employee for poor performance without evaluating performance and taking measures to address it, such as a PIP where the company policy requires one.
- Section 41 of the Employment Act mandatorily requires an explanation to the employee and an opportunity to make representations before termination for poor performance or misconduct.
- Vested stock options lapse where the employee fails to exercise them within the prescribed period and the right is forfeited upon termination for cause.
Court orders
#- 1.Declaration that termination of the Claimant's employment by the respondent was unfair
- 2.One month's salary in lieu of notice of KShs. 1,088,710
- 3.Compensation of six months' salary of KShs. 6,532,260
- 4.Payment for 43 accrued leave days of KShs. 1,560,484
- 5.Unpaid salary of 3 days of KShs. 108,871 (total award KShs. 9,290,325)
- 6.Certificate of service to be issued forthwith
- 7.Costs of the suit plus interest at court rates from the date of judgment
- 8.The award of damages is subject to statutory deductions
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (sections 35, 41, 43, 45, 49, 51, 74)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kenya National Private Secureity Workers Union v Guard Force Security Limited [2021] KEELRC 1985 (KLR)[2021] KEELRC 1985 (KLR)11 Mar 2021applied
Cite this brief
#Cite this brief
Caselaw, "Joshua Mwaniki v Andela Kenya Limited [2020] KEELRC 653 (KLR)", Case Analysis (2020). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/653/eng@2020-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.