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ELRCPartially AllowedCause No 59 of 2019· [2022] KEELRC 732 (KLR)

Joseph Mwaniki Nganga v United Millers Limited [2022] KEELRC 732 (KLR)

Employment and Labour Relations Court
24 February 2022
CBChristine N. Baari
2,367 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court confirmed an employer can fire for poor performance, but must still follow the mandatory hearing process or pay compensation.

What this practically means

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Executive summary

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The Claimant, employed as Human Resources Manager on a two-year contract effective 1st July 2016 at a gross monthly salary of Kshs. 400,000, was terminated on 11th May 2017, eleven months into the contract, for poor performance. He sued for pay in lieu of notice, compensation for unlawful termination, and unpaid leave. The Respondent asserted that the Claimant's poor performance led to an extension of his probation by six months, a performance review meeting, and an agreed separation through the contractual termination clause, with three months' salary in lieu of notice and pro-rated leave paid. The court framed two issues: whether the termination was unfair, and whether the Claimant was entitled to the reliefs sought. On substance, the court found the Respondent had valid, fair and justifiable reasons for termination, applying the reasonableness test in British Leyland UK Ltd v Swift and the poor-performance requirements in Jane Samba Mukala, since the Claimant never rebutted the probation extension or the performance allegations. On procedure, however, the court held that the Section 41 requirements of the Employment Act were not met and that the right to be heard cannot be displaced by invoking a contractual termination clause, rendering the termination procedurally unfair. The claim for pay in lieu of notice was withdrawn after admission of receipt; the unpaid leave claim failed on proof of payment in lieu of leave. Considering the Claimant's contributory poor performance and his securing comparable employment, the court awarded three months' salary (Kshs. 1,200,000) as compensation, plus half the costs of the suit with interest. Judgment was delivered at Kisumu on 24th February 2022 by Christine N. Baari, Judge.

Key legal issues

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01

Substantive fairness of the termination

Holding

The Respondent had valid, fair and justifiable reasons to terminate the Claimant for poor performance; the termination was substantively fair.

Reasoning

The Respondent extended the Claimant's probation by six months vide a letter dated 19th December 2016 on account of poor performance, held a performance review meeting on 4th May 2017, and produced complaint letters concerning the Claimant's docket. The Claimant did not challenge the probation extension or rebut the allegations. The court applied the band of reasonableness test from British Leyland UK Ltd v Swift and the requirement in Jane Samba Mukala that an employer show effort in assessing poor performance, and found a six-month extension a reasonable time to improve.

p. 3
02

Procedural fairness of the termination

Holding

The termination was procedurally unfair as the requirements of Section 41 of the Employment Act were not met.

Reasoning

Section 41 requires an employer contemplating termination on grounds of poor performance to explain the reasons to the employee in a language he understands and allow him a companion of his choice. No agreement evidencing the Claimant's acquiescence to separation via the termination clause was placed before the court, and even such an agreement could not displace the statutory right to be heard, which the court described as sacrosanct and rooted in the rules of natural justice, citing David Gichana Omuya v Mombasa Maize Millers Limited.

p. 3
03

Quantum of compensation for unfair termination

Holding

The Claimant was awarded three months' salary (Kshs. 1,200,000/-) as compensation under Section 49 of the Employment Act.

Reasoning

Compensation is capped and guided by Section 49 of the Employment Act, which requires consideration of the employee's conduct contributing to the termination, mitigation, and availability of comparable employment. The Claimant's poor performance largely contributed to the termination and he had secured alternative employment for about two years, justifying a modest award of three months' salary rather than the twelve months claimed.

p. 4

Legal principles established

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  • Sections 43, 45(2) and 47(5) of the Employment Act place the burden of proving the reasons for termination on the employer; bare denials and putting the employee to strict proof do not suffice in employment claims.
  • An employee's right to be heard under Section 41 of the Employment Act cannot be taken away through invocation of a contractual termination clause.
  • Termination for poor performance requires the employer to demonstrate a policy or practice for measuring performance and an opportunity for the employee to improve over a reasonable time.

Court orders

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  1. 1.3 Months' Salary in compensation for unfair termination at Kshs. 1,200,000/-
  2. 2.Half the costs of the suit and interest thereon

Authorities

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Legislation

  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 45(2)
  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Section 43(2)
  • Employment Act, 2007Section 41 (including subsection (1))
  • Employment Act, 2007Section 8
  • Employment Act, 2007Section 42(1)
  • Employment Act, 2007Section 49

Cases cited (6)

  • British Leyland UK Ltd v Swift
    (1981) I.R.L.R 91
  • Cooperative Bank of Kenya Limited v Banking Insurance & Finance Union
    [2017] eKLR
  • Jane Samba Mukala v Ol Tukai Lodge Limited
    Industrial Cause No. 823 of 2010 (2010) LLR 255 (ICK)
  • Jane Wairimu Machira v Mugo Waweru & Associates
    (2012) eKLR
  • David Gichana Omuya v Mombasa Maize Millers Limited
    [2014] eKLR
  • Kenya Ports Authority v Festus Kipkorir Kiprotich
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Employment Act, 2007; claim for unfair termination and associated reliefs)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "Joseph Mwaniki Nganga v United Millers Limited [2022] KEELRC 732 (KLR)", Case Analysis (2022). Cause No 59 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/732/eng@2022-02-24

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