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ELRCPartially AllowedCause No 517 of 2016· [2021] KEELRC 1686 (KLR)

Maghanga Newton Raphael v Panal Freighters Limited [2021] KEELRC 1686 (KLR)

Employment and Labour Relations Court
27 May 2021
LNLINNET NDOLO
1,175 words in judgment
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The bottom line

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A Mombasa court ruled that firing an employee without stating reasons or following fair procedure is unlawful, awarding the worker compensation and costs.

What this practically means

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Executive summary

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The Claimant, employed as Transport Coordinator on 2nd October 2015 at a monthly salary of Kshs. 40,000, sued for compensation for unfair termination following the termination of his employment on 5th May 2016. He sought 12 months' salary in compensation, one month's notice pay, service pay, overtime and a certificate of service. The Respondent, which did not appear at the hearing despite due service, asserted in its Memorandum of Response that the termination was for poor performance established through appraisals in December 2015 and April 2016, and for divulging confidential information to competitors, and that terminal dues of Kshs. 25,957.79 had been paid. The Court identified two issues: whether the termination was lawful and fair, and entitlement to remedies. Applying the settled procedure for poor-performance terminations, the Court found the appraisal forms bore no Claimant's comments or signature, that no shortcomings had been pointed out to him, and that he was given no opportunity to improve. The misconduct allegation was held to be empty and unparticularised, and no opportunity to respond was given as required by Section 41 of the Employment Act. The Court held the termination substantively and procedurally unfair and awarded three months' salary in compensation (Kshs. 120,000) and one month's notice pay (Kshs. 40,000), totalling Kshs. 160,000, with interest at court rates from the date of judgment. Service pay was disallowed as the Claimant contributed to NSSF, and the overtime claim was dismissed as unproved. Costs were awarded to the Claimant. Judgment was delivered ex parte at Mombasa via Microsoft Teams due to COVID-19 restrictions.

Key legal issues

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01

Lawfulness and fairness of termination

Holding

Termination was substantively and procedurally unfair; no reason was disclosed in the termination letter, poor performance ground not established, and misconduct allegation unsubstantiated

Reasoning

The termination letter disclosed no reason. The Respondent later claimed poor performance and disclosure of confidential information. The appraisal forms bore no employee comments or signature, no shortcomings were pointed out, and no opportunity to improve was given. The misconduct allegation lacked details and the Claimant was never required to respond to it as Section 41 requires. The termination therefore failed both substantive and procedural fairness tests.

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02

Entitlement to remedies

Holding

Claimant awarded 3 months' salary compensation and 1 month's notice pay; service pay and overtime claims disallowed

Reasoning

Compensation was calibrated at three months' salary considering length of service and the Respondent's unlawful conduct. Notice pay was awarded as claimed. Service pay failed because the Claimant contributed to NSSF. Overtime was not proved despite the Claimant's testimony on long working hours. Ex parte hearing did not relieve the Claimant of the burden of proof on unproven heads.

p. 3

Legal principles established

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  • Procedure for termination on grounds of poor performance requires that the employee be made aware of shortcomings, given reasonable time to improve, and that appraisals relied on must include the employee's input
  • Allegations of misconduct must be put to the employee to respond to at the shop floor under Section 41 of the Employment Act

Court orders

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  1. 1.Judgment entered in favour of the Claimant: 3 months’ salary in compensation (Kshs. 120,000)
  2. 2.1 month’s salary in lieu of notice (Kshs. 40,000)
  3. 3.Total award of Kshs. 160,000 with interest at court rates from the date of judgment until payment in full
  4. 4.Claimant awarded costs of the case

Authorities

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Legislation

  • Employment ActSection 41

Cases cited (2)

  • Jane Wairimu Machira v Mugo Waweru and Associates
    [2012] eKLR
  • Joshua Kabaka v Tandu Alarms Systems Limited
    [2019] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Section 41 invoked on procedure)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Maghanga Newton Raphael v Panal Freighters Limited [2021] KEELRC 1686 (KLR)", Case Analysis (2021). Cause No 517 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1686/eng@2021-05-27

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