Paul Katuku Muthengi v SMEP Micro Finance Bank Ltd [2021] KEELRC 929 (KLR)

Section 41 requires an employer, before terminating on grounds of poor performance, to explain the reason to the employee and hear any representations. The respondent's witness admitted the procedure was not applicable where an employee was dismissed for poor performance and that it was not followed. Payment in lieu of notice does not excuse non-compliance. The court found the termination procedurally unfair.

The employer was bound by its pleadings denying the score card, then confirmed in evidence the scores were the claimant's, warranting an adverse inference for failure to tender the performance evaluation policy. No appraisal was done after the 13th February 2015 letter committed to one, creating a legitimate expectation. The alleged performance improvement plan lacked proof of the claimant's participation and offered no training, redeployment or timelines, and the audit report was not a performance appraisal document.

Relying on its own prior decision in Lydia Moraa Obara v Tusker Mattresses Limited, the court held the employer bears the burden of proving a fair reason and fair procedure. Only where constructive dismissal is alleged does the employee bear a specific burden of proving intolerable conduct. The respondent's submission that the claimant bore the burden was rejected.

Special damages must be specifically proved, but proof depends on the circumstances and need not be by receipts only. The claimant explained he handed over receipts during handover and the regional manager never testified. The float returns template (CEXH IX) sufficed as proof of entitlement to the refund of Kshs. 8,050.