Mutyota v Horeca Kenya Limited (Cause 2477 of 2016) [2023] KEELRC 379 (KLR)
The bottom line
#A Kenyan court awarded a manager Kshs 1.6 million because his employer fired him for poor performance without targets, appraisal, or a hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether the claimant was on probation at the time of termination
The claimant had served past his three-month probationary period with no evidence of extension, hence he was deemed a confirmed employee entitled to full statutory safeguards
The contract dated 20th April 2016 provided for a three-month probation under clause 7. The certificate of service and June 2016 pay slip confirmed commencement on 15th June 2016. By termination on 30th September 2016, the claimant had served three and a half months. No evidence of extension existed, so the contract was deemed confirmed by operation of law under section 42 of the Employment Act, following the Onaya-Odek decision. An unsigned contract dated 15th June 2016 purporting to provide six months' probation was not owned and had no evidential value.
Whether the respondent had a justifiable reason for termination
The respondent failed to discharge its evidential burden under sections 43(1) and 45(2)(a) and (b); the termination was not substantively fair
The termination letter cited poor performance. However, the respondent, which did not tender any evidence at trial, proved no performance targets, indicators, appraisals or reports against which performance could be measured. Following Agnes Yahuma Digo v PJ Petroleum Equipment Limited, an employer who fails to manage performance lacks the moral authority to allege underperformance. Absent any performance assessment, the court concluded the respondent had not proved fair and valid reasons for termination.
Whether the claimant was accorded procedural fairness prior to termination
The termination was procedurally unfair within the meaning of sections 45(2)(c) and 41 of the Employment Act
Section 41(1) requires an employer, before terminating on grounds of misconduct, poor performance or physical incapacity, to explain the reasons to the employee and allow representation. The claimant's testimony that he was not heard was uncontroverted as the respondent called no evidence. The termination letter took effect the same day, showing the termination was abrupt with no notice or opportunity to defend himself. The court adopted the reasoning in National Bank of Kenya v Samuel Nguru Mutonya and Naumy Jemutai Kirui v Unilever Tea Kenya Limited.
Entitlement to reliefs
Compensatory damages of three months' gross salary, the balance of notice pay, and the September 2016 withheld salary were awarded; house allowance and leave pay claims were denied
Having found both substantive and procedural unfairness, the court awarded compensatory damages equivalent to three months' gross salary, factoring in the short length of employment. Since only half a month's salary (Kshs 200,000.00) was paid in lieu of notice, the balance of Kshs 200,000.00 was awarded. The respondent gave no justification for paying only half salary for September 2016, so the balance was awarded. The house allowance claim failed because gross salary was presumed to include allowances, and the leave claim failed because leave dues had been paid and the extent of any shortfall was not demonstrated.
Legal principles established
#- Where an employee continues working past the contractual probationary period without an extension, the contract is deemed confirmed by operation of law under section 42 of the Employment Act
- An employer alleging termination for poor performance must prove a performance assessment mechanism with measurable targets agreed in advance, and that the employee's performance fell below them
- Termination without prior notice of the reasons and an opportunity to be heard offends sections 41 and 45(2)(c) of the Employment Act and is procedurally unfair
Court orders
#- 1.Judgment entered in favour of the claimant against the respondent
- 2.Compensatory damages of Kshs 1,200,000.00 being equivalent to three months of gross salary
- 3.Half a month's salary in lieu of notice being Kshs 200,000.00
- 4.Withheld salary for September, 2016 being Kshs 200,000.00
- 5.Total award of Kshs 1,600,000.00
- 6.Interest on the total award at court rates from the date of judgment until payment in full
- 7.The claimant to have the costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 35, 41, 42, 43, 44, 45) in a first-instance unfair termination claim
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mutyota v Horeca Kenya Limited (Cause 2477 of 2016) [2023] KEELRC 379 (KLR)", Case Analysis (2023). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/379/eng@2023-02-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.