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ELRCPartially AllowedCause No 19 of 2020· [2022] KEELRC 1504 (KLR)

Ogwang v Equator Bottlers Limited (Cause 19 of 2020) [2022] KEELRC 1504 (KLR)

Employment and Labour Relations Court
15 June 2022
923 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 even where poor performance justifies dismissal, employers must still follow the correct warning and hearing procedure or pay compensation.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent since 2005 and last serving as an Area Retail Manager, was dismissed on 10 September 2019 for poor performance after a cautionary letter on asset verification scores, a second cautionary letter, and a Performance Improvement Plan with three monthly reviews all rated below expectations. The Court considered procedural and substantive fairness. On procedure, it held that the cautionary letter did not meet the section 35(1)(c) threshold of warning the employee of contemplated termination in clear and unambiguous terms, and that the Respondent failed to demonstrate that the Claimant was afforded the opportunity to make representations in the company of a fellow employee as required by section 41 before termination. Performance review meetings could not, without more, substitute the statutory hearing. The termination was therefore declared procedurally unfair. On substance, however, the Court was satisfied under sections 43 and 45 that the Respondent proved valid and fair reasons: targets were agreed, evaluations discussed with the Claimant, time given to improve, and no evidence showed the targets were unreasonable or the evaluations biased. Balancing the tainted process against about 14 years of service, the Court awarded compensation equivalent to five months' gross wages, Kshs 560,000, with interest at court rates from the date of judgment, ordered issuance of a Certificate of Service within 21 days, and awarded the Claimant costs of the Cause. The Cause was heard on 31 March 2022 and judgment delivered in Kisumu on 15 June 2022 by Radido Stephen, Judge.

Key legal issues

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01

Procedural fairness in termination for poor performance

Holding

The termination was procedurally unfair because the cautionary letter did not clearly warn of contemplated termination and the Claimant was not afforded the section 41 hearing with a fellow employee before termination

Reasoning

Section 35(1)(c) requires written notice of at least 28 days unless summary dismissal applies. The cautionary letter of 6 June 2019 merely advised the Claimant to desist from dishonesty and did not unambiguously signal termination. Section 41 requires an employer to allow representations accompanied by a co-worker before termination. The performance review meetings did not amount to the required hearing.

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02

Substantive fairness of termination for poor performance

Holding

The Respondent proved valid and fair reasons for the termination as the Claimant was set targets, evaluated, given time to improve and showed no improvement

Reasoning

Under sections 43 and 45 the employer must prove valid and fair reasons. The Respondent produced performance evaluations discussed with the Claimant, with agreed targets. He was given time to improve but did not, and produced no evidence that the targets were unreasonable or that the evaluations were biased.

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Remedies: compensation and Certificate of Service

Holding

Given 14 years of service but valid reasons with a tainted process, the equivalent of 5 months' gross wages was awarded, and a Certificate of Service ordered as a statutory entitlement

Reasoning

The Court weighed the finding that reasons were valid but the process tainted, against the Claimant's roughly 14 years of service, fixing compensation at five months' gross salary. A Certificate of Service is a statutory entitlement which the Respondent must issue.

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Legal principles established

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  • A cautionary letter must warn an employee of contemplated termination in clear and unambiguous terms to satisfy section 35(1)(c) of the Employment Act
  • Performance review meetings cannot substitute the hearing and opportunity to make representations required by section 41 of the Employment Act before termination for poor performance

Court orders

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  1. 1.Declaration that the termination of the Claimant's employment was procedurally unfair
  2. 2.Compensation of Kshs 560,000/- (equivalent of 5 months' gross wages)
  3. 3.Interest on the decretal sum at court rates from the date of judgment
  4. 4.Respondent to issue a Certificate of Service within 21 days
  5. 5.Claimant to have costs of the Cause

Authorities

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Legislation

  • Employment Act, 2007Section 35(1)(c)
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 45
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 35, 41, 43 and 45 applied); specific constitutional provision not invoked in the judgment

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, "Ogwang v Equator Bottlers Limited (Cause 19 of 2020) [2022] KEELRC 1504 (KLR)", Case Analysis (2022). Cause No 19 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1504/eng@2022-06-15

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