Wasike v Nzoia Sugar Company Limited (Cause 90 of 2017) [2022] KEELRC 61 (KLR)
The bottom line
#Nzoia Sugar must pay a former manager KShs 4.46 million after a Kenyan court ruled his 'probation' had legally expired and his dismissal ignored fair procedure.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was still on probation at the time of termination
The Claimant's probationary contract had automatically converted into confirmed employment on lapse of the aggregate 12-month probation period, i.e. by March 12, 2016, before the June 17, 2016 termination.
Section 42(2) of the Employment Act caps probation at six months, extendable by a further six months by agreement, and Section 42(3) prohibits employment under a probationary contract beyond that aggregate period. The appointment letter provided for six months' probation and the Claimant served from March 11, 2015 to June 17, 2016. Even the Respondent's own witness confirmed that as per the law the Claimant was not on probation at termination.
Whether the reason for termination (unsatisfactory performance during probation) was valid and justified
The employer failed to prove the reason for termination; there was no appraisal report or clear criteria, and the internal audit memo could not substitute for evaluation of the Claimant's performance.
Section 43 places the burden of proving reasons for termination on the employer. The termination letter relied on unsatisfactory performance during probation, yet RWI admitted no appraisal report existed. The internal memo of March 3, 2016 related to procurement matters, referred to an audit predating the Claimant's employment, and was not specific to his performance. Academic qualifications, raised at trial, were not stated in the termination letter and were therefore irrelevant under Section 43. The court adopted the Court of Appeal's endorsement of the Jane Samba Mukala criteria on proving poor performance.
Whether the procedure for termination was fair
The termination was procedurally unfair; the Claimant was never invited to disciplinary proceedings, and the manual clause allowing summary dismissal cannot displace Section 41 of the Employment Act.
Section 41 requires an employer contemplating termination on grounds of misconduct, poor performance or incapacity to explain the reasons to the employee in a language they understand and allow the presence of a fellow employee or union representative. RWI admitted the Claimant was not invited to any disciplinary proceedings, and the Respondent relied on Clause 8.2.3.4 of its HR Manual permitting dismissal without hearing for gross misconduct. The court held that manual provisions cannot oust mandatory statutory procedure, and no third warning was issued contrary to the manual's own scheme.
Whether the Claimant was entitled to the reliefs sought, including maximum compensation
The Claimant was awarded the maximum 12 months' gross salary as compensation under Section 49(1)(c), plus interest and costs; reinstatement was not pursued.
Under Section 49(4) the court considered the circumstances of termination, length of service, reasonable expectation of continued employment and employment prospects. The Claimant had served over 13 months, was confirmed by operation of law, and newspaper adverts by the Respondent publishing his photograph and cessation of employment negatively affected his future employment chances. Given the absence of valid reasons and procedural fairness, and his prior credible employment history, maximum compensation of 12 months' gross salary of kshs.371,449.00 was warranted, subject to statutory deductions.
Legal principles established
#- A probationary contract cannot exceed an aggregate of twelve months and is automatically converted into confirmed employment upon lapse of that period.
- An employer bears the burden of proving valid reasons for termination, and poor performance must be established through a clear evaluation or appraisal criteria; an internal memo does not amount to evaluation of performance.
- The procedural requirements of Section 41 of the Employment Act are mandatory and cannot be ousted by an employer's human resources manual.
Court orders
#- 1.A declaration that the termination of the Claimant's employment contract by the Respondent was unlawful and unfair.
- 2.The Respondent to pay the Claimant compensation for unfair and unlawful termination equivalent to 12 months of last gross monthly salary of kshs. 371,449.00, total kshs.4,457,388/-, subject to statutory deductions.
- 3.Interest on the compensation at court rates from date of judgment until payment in full.
- 4.The Respondent to pay costs of the suit.
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 41, 42, 43, 45 and 49 applied)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wasike v Nzoia Sugar Company Limited (Cause 90 of 2017) [2022] KEELRC 61 (KLR)", Case Analysis (2022). Cause No 90 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/61/eng@2022-05-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.