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ELRCAllowedCause No 316 of 2016· [2022] KEELRC 984 (KLR)

Winnie Chemutai Chepkony v Jamii Bora Bank [2022] KEELRC 984 (KLR)

Employment and Labour Relations Court
21 January 2022
3,267 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 ruled that a bank unfairly fired an employee because her probation could not be extended without her agreement, and she was never heard before dismissal.

What this practically means

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Executive summary

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The claimant, employed by Jamii Bora Bank on 3rd August 2015 on a three-month probationary appointment, sued for wrongful termination after receiving a 'non-confirmation of contract' letter in January 2016. She contended that her probation was never validly extended, so her employment was confirmed by operation of law, and that her termination was without valid reason or fair procedure. The respondent maintained she was terminated during probation for non-performance and alleged she refused to sign a probation extension letter dated 2nd November 2015. The court found no evidence of mutuality in the purported extension as required by section 42(2) of the Employment Act, noting the claimant never signed the letter and no follow-up communication was produced, and that the extension letter made no reference to performance. The claimant was therefore deemed confirmed upon lapse of the three-month probation. On substantive justification, the termination letter cited loan disbursements below 50%, but email evidence showed the respondent bank faced liquidity and lending slowdown problems, so the shortfall was not entirely attributable to her. Procedurally, there was no evidence she was accorded a hearing on the non-performance allegations as required by section 41(1). The termination was held unfair and unlawful. The court awarded compensatory damages of Kshs 280,000/= (two months' gross salary), one month's salary in lieu of notice (Kshs 140,000/=), 10 days' accrued leave (Kshs 46,667/=) and five days' salary for January 2016 (Kshs 23,333/=), totalling Kshs 490,000/=, plus costs of the suit and interest at court rates from the date of judgment. Judgment delivered by Stella Rutto, J, on 21st January 2022.

Key legal issues

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01

Whether the claimant's probation was validly extended

Holding

The purported extension was ineffectual for lack of mutuality; the claimant stood confirmed upon lapse of the 3-month probationary period.

Reasoning

Section 42(2) of the Employment Act permits extension of probation beyond six months only with the employee's agreement. The claimant refused to sign the extension letter, and the respondent produced no evidence of follow-up communication or of the claimant's acceptance. The extension letter also made no reference to performance. The court inferred there was no agreement, so the claimant was confirmed by operation of law and was not on probation at termination.

p. 2
02

Whether the termination was substantively justified

Holding

The respondent failed to prove valid and fair reasons; poor loan disbursement performance stemmed from the bank's operational/liquidity problems, not the claimant.

Reasoning

Under sections 43(1) and 45(2) of the Employment Act, the employer bears the burden of proving reasons for termination. The termination letter cited loan disbursement below 50%. Email evidence from the respondent's own Head of Medium Enterprise showed liquidity shortages and a lending slowdown affecting disbursements, showing the shortfall was not entirely attributable to the claimant. The respondent thus failed to justify the termination.

p. 3
03

Whether fair procedure under section 41 was followed

Holding

No evidence that the claimant was accorded an opportunity to be heard on the non-performance allegations; procedure was unfair.

Reasoning

Section 41(1) requires an employer to explain to the employee, in a language they understand, the reasons for contemplated termination on grounds of poor performance, and to allow another employee or union representative present. There was no evidence this occurred; the termination letter did not respond to the claimant's explanation to the show cause letter. The court adopted the Jane Samba Mukala reasoning that an employee must be allowed to defend themselves before termination for poor performance.

p. 4

Legal principles established

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  • Extension of a probationary period requires the agreement of the employee; without evidence of mutuality, the employee stands confirmed upon lapse of the contractual probation.
  • An employer must prove both valid reasons for termination and compliance with fair procedure; failure renders termination unfair.

Court orders

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  1. 1.Compensatory damages of Kshs 280,000/= (equivalent to 2 months gross salary)
  2. 2.One month's salary in lieu of notice of Kshs 140,000/=
  3. 3.10 days accrued leave of Kshs 46,667/=
  4. 4.Salary for 5 days worked in January 2016 of Kshs 23,333/=
  5. 5.Total award of Kshs 490,000/=
  6. 6.Claimant to have the costs of the suit
  7. 7.Interest on the total award at court rates from the date of judgment till payment in full

Authorities

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Legislation

  • Employment Actsection 42(2)
  • Employment Actsection 43(1)
  • Employment Actsection 45(2)
  • Employment Actsection 45(2)(c)
  • Employment Actsection 41(1)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48

Cases cited (6)

  • Francis Aboge Oduk vs Hasbah Kenya Limited
    (2020) eKLR
  • Water Ogal Anuro vs Teachers Service Commission
    (2013) eLKR
  • Jane Samba Mukala vs Ol Tukai Lodge Limited
    Industrial Cause Number 823 of 2010 (2013) eKLR
  • Peris Nyambura Kimani vs Dalbit Petroleum Ltd
    Petition No. 63 of 2013
  • James O Oloo vs Tana and Athi River Development Authority
    [2016] eKLR
  • Narry Philemons Onaya-Odeck vs Technical University of Kenya (Formerly, the Kenya Polytechnic University College)
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (memorandum of claim under the Employment Act)

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, "Winnie Chemutai Chepkony v Jamii Bora Bank [2022] KEELRC 984 (KLR)", Case Analysis (2022). Cause No 316 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/984/eng@2022-01-21

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