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ELRCPartially AllowedStatement of Claim filed 12th November 2015 (ELRC, Nairobi)· [2020] KEELRC 1147 (KLR)

Peninna Mutile Kitua v Jamii Bora Bank Limited [2020] KEELRC 1147 (KLR)

Employment and Labour Relations Court
12 May 2020
MOMAUREEN ONYANGO
3,370 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 even documented poor performance cannot justify dismissal without giving the employee a hearing first.

What this practically means

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Executive summary

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The claimant, employed by the respondent from December 2002 (initially as a loans officer with Jamii Bora Trust) and last serving as a Small Enterprise Officer, was terminated by letter dated 13th May 2015 with effect from 15th May 2015 on grounds of non-performance. She sued for a declaration that the termination was unlawful, notice pay, severance pay, leave pay, overtime, house allowance, damages to retirement age and pension benefits. The respondent defended the dismissal as procedurally proper after warnings and two performance improvement plans, and contested all quantum claims. The court framed two issues: whether the termination was unfair, and the reliefs payable. It held that although poor performance was a valid reason under sections 43 and 41(1) of the Employment Act, the termination was procedurally unfair because the claimant was not given a hearing as required by section 41(2); no minutes of any disciplinary hearing were produced, and placement on a performance improvement plan did not dispense with the right to be heard. On remedies, the court awarded one month's notice pay (Kshs.46,875), 14 days' leave pay (Kshs.25,240) and compensation of 10 months' salary (Kshs.468,750) under section 49(4), totalling Kshs.540,865. Severance, overtime, house allowance, damages to retirement age and pension claims were dismissed for want of proof, lack of redundancy, consolidated salary, the 12-month statutory cap and receipt of pension refund respectively. The respondent was ordered to pay the claimant's costs, with interest from the date of judgment at court rates.

Key legal issues

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01

Fairness of the termination procedure

Holding

Termination was substantively justified (poor performance) but procedurally unfair for breach of section 41

Reasoning

The court accepted a long-standing performance issue with warnings and two performance improvement plans, establishing valid reason under section 43/41(1). However, the claimant's uncontroverted testimony was that she was served with a termination letter without a hearing; the respondent produced no minutes of any disciplinary hearing. Section 41(2) requires the employer to hear and consider representations before termination on grounds of poor performance.

p. 4
02

Remedies for unfair termination

Holding

One month's notice pay, 14 days' leave pay and 10 months' salary as compensation awarded; other heads dismissed

Reasoning

Applying section 49(4) factors, including circumstances of termination and length of service, the court awarded 10 months' salary against the 12-month statutory cap. Notice limited to one month per contract; overtime unproved; house allowance consolidated; severance inapplicable absent redundancy; pension claim dismissed as refund received.

p. 5
03

Employer's evidential burden on poor performance

Holding

Employer must demonstrate measures and evaluation system used to assess performance; mere assertion insufficient

Reasoning

Adopting the reasoning in Jane Samba Mukala, the court noted that where poor performance is the reason for termination, the employer bears a high level of proof, showing a performance evaluation system and the effort taken to address poor performance before the dismissal decision.

p. 4

Legal principles established

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  • An employer must prove the reason for termination, failing which the termination is unfair under section 45
  • An employee terminated for poor performance must be given a hearing under section 41 irrespective of prior performance improvement plans
  • Compensation for unfair termination under section 49 cannot exceed 12 months' salary

Court orders

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  1. 1.Declaration that the termination of the claimant's employment was unfair
  2. 2.Pay in lieu of notice (one month's salary) Kshs.46,875
  3. 3.Pay in lieu of 14 days leave Kshs.25,240
  4. 4.Compensation of 10 months' salary Kshs.468,750 (total Kshs.540,865)
  5. 5.Respondent to pay the claimant's costs
  6. 6.Interest to accrue from date of judgment at court rates

Authorities

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Legislation

  • Employment Actsection 45(2)(a),(b),(c)
  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 40(g)
  • Employment Actsection 36(6)(a)
  • Employment Actsection 31(1),(2)
  • Employment Actsection 49(1)(c)
  • Employment Actsection 49(4)
  • Employment Actsection 44(3),(4)
  • Employment Actsection 5(8)(c)
  • Retirement Benefits Actnot specified
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d); Article 48

Cases cited (3)

  • Gilbert Mariera Makori v Equity Bank Limited
    [2016] eKLR
  • Jane Samba Mukala v Ol Tukai Lodge Limited
    [2013] eKLR
  • Kenfreight (E.A) Limited v Benson K. Nguti
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (no specific constitutional article pleaded for jurisdiction; judgment cites Article 159(2)(d) and Article 48 only for virtual delivery)

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, "Peninna Mutile Kitua v Jamii Bora Bank Limited [2020] KEELRC 1147 (KLR)", Case Analysis (2020). Statement of Claim filed 12th November 2015 (ELRC, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1147/eng@2020-05-12

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