Peter Muriithi Njoka & 4 others v Style Industries Limited [2022] KEELRC 719 (KLR)
The bottom line
#Kenya's Employment Court ruled Style Industries unfairly dismissed five workers for poor performance, awarding each nine months' salary because no targets, appraisals or fair hearings existed.
What this practically means
#Executive summary
#Key legal issues
#Substantive fairness of termination for poor performance
Termination was substantively unfair; no targets were established and no performance appraisal or evaluation system existed
Section 43 places the burden on the employer to prove the reason for termination, and section 45 requires proof that the reason was valid and fair. For poor-performance terminations the employer must show a performance measurement policy, evaluations, and improvement measures. The Respondent's witness conceded there was no appraisal and no performance improvement plan, and no document discernible targets. The Court found no set targets existed and the termination lacked substantive fairness.
Procedural fairness under section 41 of the Employment Act
Termination violated section 41: no effective opportunity to show cause and no genuine disciplinary hearing
Section 41 requires information, hearing and consideration. The show cause letter did not specify how cause was to be shown; the HR officer alleged to have received explanations was not called to rebut the Claimants' account. The disciplinary minutes were copies whose signatures the Claimants disputed; the Respondent failed to produce originals despite a court warning, and an adverse inference was drawn. The Court concluded no disciplinary proceedings were conducted as purported.
Entitlement to relief and computation of compensation
Compensation of 9 months' gross salary awarded to each Claimant; computed on basic salary plus house allowance
Having found procedural and substantive unfairness, section 49(1)(c) entitled the Claimants to compensation. Pay slips showed inconsistent overtime and bonus figures, so certainty dictated use of basic salary plus house allowance. The extent of the award was informed by the unfairness, the Court's impression that the disciplinary minutes were fabricated, and the length of service. Nine months' compensation was held sufficient for each Claimant.
Legal principles established
#- To validly terminate for poor performance under section 45 of the Employment Act, an employer must demonstrate a known performance policy with evaluation criteria, employee involvement, communication and challenge avenues, and a performance improvement plan.
- Where the original of a contested document is withheld despite a warning, an adverse inference may be drawn that its production would have been prejudicial to the party withholding it.
- Consistent salary components (basic salary and house allowance), not fluctuating overtime and bonuses, should be used in computing compensation.
Court orders
#- 1.A declaration that the termination of the Claimants' employment was both procedurally and substantively unfair
- 2.Compensation pursuant to section 49(1)(c) of the Employment Act: 1st Claimant Kshs. 117,909; 2nd Claimant Kshs. 113,391; 3rd Claimant Kshs. 113,391; 4th Claimant Kshs. 117,909; 5th Claimant Kshs. 117,909
- 3.Interest on the awarded figures from the date of judgment till full payment
- 4.Costs of the suit to the Claimants
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute; judgment delivered under Article 159(2)(d) and Article 48 of the Constitution)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Muchora v National Bank of Kenya Limited (Cause 80 of 2022) [2023] KEELRC 1717 (KLR)[2023] KEELRC 1717 (KLR)29 Jun 2023
Cite this brief
#Cite this brief
Caselaw, "Peter Muriithi Njoka & 4 others v Style Industries Limited [2022] KEELRC 719 (KLR)", Case Analysis (2022). Cause No. 699 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/719/eng@2022-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.