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ELRCPartially AllowedNot stated in the judgment· [2021] KEELRC 1787 (KLR)

Khadija Asman Adams v Nic Bank Limited [2021] KEELRC 1787 (KLR)

Employment and Labour Relations Court
28 April 2021
1,127 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~5 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that even a well-documented poor performance case still requires a proper disciplinary hearing before an employee can be fired.

What this practically means

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Executive summary

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Khadija Asman Adams, employed by NIC Bank Ltd from 2008 and placed on a permanent and pensionable contract in January 2014, was terminated on 22 March 2016 following performance management. She sued for unfair termination and breach of contract; the Bank filed a response and counterclaim for unreturned company property. The Court found the Bank had valid and fair reasons for termination under sections 43 and 45 of the Employment Act, 2007, its documents showing the Claimant's performance did not match agreed standards. However, the termination was procedurally unfair under section 41: a performance evaluation process is not a disciplinary process and lacks the protections of a hearing with representation. The Claimant was never taken through the disciplinary process envisaged by law, and the Bank did not disclose any internal HR manual governing discipline. On quantum, the Court awarded four months' gross salary (Kshs 300,000/-) as compensation, considering her roughly seven years of service and the presence of valid reasons. Salary in lieu of notice required no determination as the Bank had offered it, and the Court deferred to the Bank's offer of 9 outstanding leave days since no evidential foundation was laid for accrued leave for 2015 and 2016. The service pay claim failed because the Claimant did not file the pension Fund rules or join the Fund; she was directed to follow up with the Fund. The counterclaim was not proved - the alleged unreturned properties were never disclosed, and Mr Mutua, who received the surrendered items, was not called to testify. The Claimant succeeded partially and was awarded costs on a half-scale. Judgment delivered at Nairobi on 28 April 2021 by Radido Stephen, Judge.

Key legal issues

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01

Whether a performance evaluation process satisfies section 41 procedural fairness

Holding

It does not; the Claimant was not taken through a disciplinary process as envisaged by law, making the termination procedurally unfair despite valid reasons.

Reasoning

Section 41 requires an employer to give the employee an opportunity to make representations before termination for misconduct, poor performance or incapacity, and the right to be accompanied by a colleague or union representative. An ordinary performance evaluation lacks these inbuilt protections. It merely sets the factual background for any subsequent disciplinary hearing. Since no such disciplinary process was conducted and no HR manual governing discipline was disclosed, the process fell short of the law.

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02

Substantive fairness - whether reasons for termination were valid and fair

Holding

The Respondent proved the Claimant's performance did not match agreed standards, so valid and fair reasons existed under sections 43 and 45.

Reasoning

The burden lay on the Respondent under sections 43 and 45 of the Employment Act to prove the reasons for termination. It produced a performance review letter dated 27 July 2015, minutes of a performance review meeting of 9 November 2015 and minutes of the appeal hearing of 5 January 2016. On considering those documents the Court was satisfied the Claimant's performance did not match agreed standards, so the reasons were valid and fair, though the process was not.

p. 2
03

Quantum of compensation for unfair termination

Holding

Equivalent of 4 months' gross salary (Kshs 300,000/-) was fair given about 7 years of service and the fact that valid reasons existed but the process was unfair.

Reasoning

In exercising discretion on compensation under section 49, the Court weighed the length of service (about 7 years), the fact that the Respondent had established valid and fair reasons for termination, and the failure to follow a fair process. Balancing these factors, four months' gross salary at Kshs 75,000/- per month was considered fair, yielding Kshs 300,000/-.

p. 2
04

Whether the Respondent's counterclaim was proved

Holding

It was not; the alleged unreturned properties were never disclosed and a clearance form is not tangible property.

Reasoning

The Respondent's witness did not identify the properties the Claimant allegedly failed to surrender, and a staff clearance form is a facilitative document, not tangible property. The Claimant testified she surrendered a mobile phone, sim card, tag, business cards and health card to Mr Mutua of human resources, but the Respondent did not call Mr Mutua to testify and offered no explanation for his absence. The counterclaim therefore failed.

p. 2

Legal principles established

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  • A performance evaluation process is not a disciplinary process and cannot substitute for the procedural fairness protections of section 41 of the Employment Act, such as a hearing while accompanied by a colleague or trade union representative.

Court orders

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  1. 1.Award of Kshs 300,000/- being the equivalent of 4 months' gross salary as compensation for unfair termination
  2. 2.Award of benefits set in the letter of termination if the same were not collected
  3. 3.Costs to the Claimant on a half-scale

Authorities

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Legislation

  • Employment Act, 2007section 41
  • Employment Act, 2007sections 43 and 45
Jurisdiction invoked
Employment Act, 2007 (sections 41, 43 and 45)

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, "Khadija Asman Adams v Nic Bank Limited [2021] KEELRC 1787 (KLR)", Case Analysis (2021). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1787/eng@2021-04-28

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