Francis Ndeke Kyalo v Cosmos Limited [2021] KEELRC 1230 (KLR)
The bottom line
#A Kenyan court ruled that firing an employee over a performance plan with no evidence of poor performance is unfair, awarding over Kshs.1.3 million.
What this practically means
#Executive summary
#Key legal issues
#Validity of the reason for termination
Termination was not founded on a valid reason because no poor performance was established before the PIP was imposed
The court found no warning letters, appraisal reports or other records showing poor performance prior to 01.03.2020. RW's cross-examination confirmed nothing filed showed the claimant was a poor performer before the PIP. Absent evidence of want of performance, the PIP was unjustified and the resulting termination lacked a valid reason under sections 43 and 45(2) of the Employment Act.
Procedural fairness of the PIP and disciplinary process
The respondent breached clause 6.2.5 of its Human Resource Policy Manual by failing to monitor and give feedback during the PIP and by unilaterally extending it
Clause 6.2.5 required close monitoring, frequent feedback and recommendations during the PIP. The evidence showed no such steps; review was only fixed for August 2020, the extension beyond 31.05.2020 was never communicated, and the Kshs.10,000 float and samples were withheld. The invoked procedure was therefore unfair under section 45(2)(c).
Remuneration for computation of awards
Last monthly gross pay was Kshs.108,888.15 (basic, house and travel allowances, excluding commission), plus monthly commission
Both parties exhibited an undisputed payslip dated 31.08.2020 showing total payments of Kshs.112,646.15 comprising basic pay, house allowance, travel allowance and sales commission. Excluding sales commission, the court adopted Kshs.108,888.15 as the monthly gross pay for computing the notice and compensation awards.
Entitlement to compensation under section 49
Maximum compensation warranted by aggravating factors but reduced to 10 months for the claimant's partial contribution
The claimant's 17-year clean service, earned bonuses, the irregular PIP and the delayed payment of dues justified maximum compensation. However, his condonation of the irregular PIP and the gratuity paid balanced justice, yielding 10 months' gross salary.
Legal principles established
#- An employer must satisfy itself, with evidence such as appraisal reports or warnings, that an employee's performance needs improvement before imposing a PIP; termination founded on an unjustified PIP lacks a valid reason under sections 43 and 45(2) of the Employment Act.
- Where an employer's own policy (clause 6.2.5) stipulates procedural preconditions for a PIP, non-compliance renders termination unfair under section 45(2)(c).
Court orders
#- 1.Declaration that the respondent unfairly and unlawfully terminated the claimant's employment
- 2.Respondent to pay the claimant Kshs.1,311,958.49 (less PAYE) by 01.09.2021, failing interest at court rates from the date of judgment until full payment
- 3.Claimant entitled to a certificate of service as already issued
- 4.Respondent to pay the claimant's costs of the suit
- Jurisdiction invoked
- Employment and labour relations jurisdiction under the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Francis Ndeke Kyalo v Cosmos Limited [2021] KEELRC 1230 (KLR)", Case Analysis (2021). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1230/eng@2021-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.