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ELRCPartially AllowedCause No. 920 of 2017· [2020] KEELRC 1251 (KLR)

Lawrence Mukeka v Zanaafrica Group Limited [2020] KEELRC 1251 (KLR)

Employment and Labour Relations Court
15 April 2020
HWHellen S. Wasilwa
3,691 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer who fires staff for poor performance without a disciplinary hearing and proof of that poor performance must pay substantial compensation.

What this practically means

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Executive summary

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The Claimant, formerly Finance Officer of the Respondent, sued for compensation for wrongful and unfair termination on 30th March 2017 allegedly on account of poor performance, and for terminal dues comprising one month's pay in lieu of notice, accrued leave, gratuity and a Certificate of Service. The Respondent admitted the employment but defended the termination as justified, asserting the Claimant's poor performance was documented through warnings and appraisals, and counterclaimed Kshs. 950,000 comprising a KRA penalty of Kshs. 750,000 and Kshs. 200,000 it could not account for. The court held that even in poor-performance cases the onus of proving the poor performance rests on the employer, who must test performance against the job description and accord the employee a disciplinary hearing under Section 41 of the Employment Act. Since no disciplinary process was undertaken and no valid reasons were established, the termination was found unfair and unjustified under Sections 43 and 45. The counterclaim was dismissed because the failure to subject the Claimant to a disciplinary hearing meant the alleged losses were unproved. The court awarded one month's salary in lieu of notice (Kshs. 140,000), accrued leave of 20 days (Kshs. 93,333), gratuity as 13th salary under the HR Manual (Kshs. 140,000) and eight months' salary as compensation (Kshs. 1,120,000), totalling Kshs. 1,493,333 less statutory deductions, with costs of the suit plus interest at court rates to the Claimant. Judgment was delivered virtually by Lady Justice Hellen Wasilwa on 15th April 2020.

Key legal issues

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01

Substantive and procedural fairness of termination on grounds of poor performance

Holding

Termination was unfair and unjustified for lack of valid reasons and absence of a fair disciplinary process under Sections 41 and 45 of the Employment Act

Reasoning

The employer was required to prove the reasons for termination under Section 43 and demonstrate valid and fair reasons under Section 45. Poor performance was expected to be tested against the Claimant's job description, which was never done. The Claimant was not taken through any disciplinary process as envisaged under Section 41, making the termination procedurally flawed and the reasons unsubstantiated.

p. 5
02

Respondent's counterclaim for losses occasioned by poor performance

Holding

Counterclaim dismissed for failure to prove losses

Reasoning

The Respondent claimed Kshs. 950,000 being a KRA penalty of Kshs. 750,000 and unaccounted funds of Kshs. 200,000. The court held that failure to subject the Claimant to a disciplinary hearing denied him an opportunity to explain himself, and the losses were therefore not proved.

p. 5

Legal principles established

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  • Even where an employer alleges poor performance, the onus of proving the poor performance lies upon the employer
  • A disciplinary hearing process is mandatory before termination or dismissal

Court orders

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  1. 1.1 month salary in lieu of notice of Kshs. 140,000
  2. 2.Accrued 20 days leave of Kshs. 93,333
  3. 3.Gratuity as provided under the Human Resource Manual as 13th salary of Kshs. 140,000
  4. 4.8 months' salary as compensation for unlawful termination of Kshs. 1,120,000, less statutory deductions
  5. 5.Respondent to pay costs of the suit plus interest at Court rates from the date of judgment
  6. 6.Counterclaim dismissed

Authorities

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Legislation

  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 45(2)
  • Employment Act, 2007Sections 47(5), 49, 50, 35, 36, 42(1), 44(3) and (4)
  • Evidence ActSection 107

Cases cited (12)

  • Postal Corporation of Kenya Vs Andrew K. Tanui
    (2019) eKLR
  • Lillian Ochang Vs kenol Limited
    (2005) eKLR
  • National Bank of Kenya Vs Samuel Nguru Mutunya
    (2019) eKLR
  • Walter Ogal Anuro Vs Teachers Service Commission
    (2013) eKLR
  • Daniel Ouma Okuku Vs Kenya Plantation and Agricultural Workers Union & Others
    Civil Appeal 85 of 2017
  • Alphonce Maghanga Mwachanya Vs Operation 680 Limited
    (2013) eKLR
  • Abraham Gumba Vs Kenya Medical Supplies Authority
    (2014) eKLR
  • Alfred Nyungu Kimungui Vs Bomas of Kenya
    (2013) eKLR
  • James Chucha Gathere Vs Nation Media Group Limited
    (2013) eKLR
  • Pathfinder International Kenya Limited Vs Stephen Ndegwa Mwangi
    (2019) eKLR
  • Abraham Nyambane Asiago Vs Barclays Bank of Kenya Limited
    (2019) eKLR
  • Ol Pajeta Ranching Limited Vs David Wanjau Muhoro
    (2017) eKLR
Jurisdiction invoked
Article 162(2) of the Constitution (establishment of the Employment and Labour Relations Court); Employment and Labour Relations Court Act

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, "Lawrence Mukeka v Zanaafrica Group Limited [2020] KEELRC 1251 (KLR)", Case Analysis (2020). Cause No. 920 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1251/eng@2020-04-15

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