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ELRCPartially AllowedNot stated in judgment· [2023] KEELRC 902 (KLR)

Achungo v IBM East Africa Limited (Cause 365 of 2019) [2023] KEELRC 902 (KLR)

Employment and Labour Relations Court
13 April 2023
2,698 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer cannot extend probation past six months; after that, an employee is permanent and termination must follow full Employment Act protections.

What this practically means

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Executive summary

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The claimant, head-hunted from the United States of America, was employed on 1st November, 2015 as an Enterprise Content Management Client Solution Specialist on a six-month probationary contract terminable by seven days' notice. He complained of lack of orientation, absence of agreed targets and Key Performance Indicators for several months, and harassment by his supervisor. No performance review occurred within the initial probation, which expired on 1st May, 2016. On 11th May, 2016 the respondent purported to extend probation for a further six months, and on 3rd May, 2016 placed the claimant on a Performance Improvement Plan; his employment was terminated on 15th June, 2016 for alleged poor performance, without notice pay, May/June salary or a Certificate of Service. The court held that upon expiry of the six-month probation the claimant became a permanent employee by operation of law, and the purported extension of probation was null and void ab initio. The termination therefore engaged the mandatory requirements of Sections 36, 41, 43 and 45 of the Employment Act. The respondent proved neither a valid reason nor a fair procedure, and its conduct was an aggravating circumstance. Judgment was entered for the claimant: one month's salary in lieu of notice (Kshs 728,922), arrear salary for May and June 2016 (Kshs 1,093,563), compensation of three months' salary (Kshs 2,186,766), totaling Kshs 4,009,251, with interest at court rates, a Certificate of Service within 30 days, and costs to the claimant.

Key legal issues

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01

Effect of expiry of the probationary period

Holding

The six-month probation ended on 1st May, 2016; the purported extension on 11th May, 2016 was null and void whether or not signed under coercion, and the claimant became a permanent employee

Reasoning

Section 42 caps probation at six months extendable once by agreement for a further six. The initial period expired on 1st May, 2016; the employer's purported reintroduction of probation thereafter was outside the statutory framework, so the claimant enjoyed full statutory protection against unfair termination.

p. 4
02

Validity of the termination

Holding

Termination was unlawful and unfair for lack of valid reason and fair procedure

Reasoning

The respondent relied on poor work performance but produced no performance evaluation reports and gave no hearing, notice or reasons. The short interval between the purported extension and termination showed the extension was a device to escape the Employment Act's mandatory provisions.

p. 5
03

Quantum of remedies

Holding

Claimant awarded notice pay, arrear salary and three months' salary compensation with aggravating circumstances

Reasoning

The court considered the claimant's head-hunting, relocation from the USA, deceptive conduct by the respondent, failure to pay earned salary, and absence of a Certificate of Service as aggravating factors under Sections 49(1)(c) and (4), justifying three months' gross salary as compensation.

p. 5

Legal principles established

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  • Upon expiry of the statutory maximum probationary period without confirmation, the employee converts to a permanent employee by operation of law and the employer cannot lawfully extend probation
  • Once the probationary period expires, termination is subject to the mandatory procedural and substantive requirements of Sections 36, 41, 43 and 45 of the Employment Act

Court orders

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  1. 1.One month salary in lieu of notice of Kshs 728,922
  2. 2.Arrear salary for May and June, 2016 of Kshs 1,093,563
  3. 3.Compensation of Kshs 2,186,766 (equivalent of three months' salary), total award Kshs 4,009,251
  4. 4.Interest at court rates from date of judgment till payment in full
  5. 5.Certificate of Service to be provided to the claimant within 30 days of the judgment
  6. 6.Respondent to meet the costs of the suit

Authorities

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Legislation

  • Employment ActSection 42
  • Employment ActSections 36, 41, 43 and 45
  • Employment ActSection 49(1)(c) and (4)

Cases cited (4)

  • Catherine Kathina Kelly –Vs- Ilkisonko Sacco Limited
    [2016] eKLR
  • Barclays Bank of Kenya Limited –vs- Evans Ondusa Onzere
  • Kenya Science Research International Technical and Allied Institutions Worker’s Union (KSRITAWU) –vs- Stanley Kinyanjui and Magnate Venture’s Limited
  • Dorcas Kemunto Wainaina -vs- IPAS
    [2018] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, No. 11 of 2007

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, "Achungo v IBM East Africa Limited (Cause 365 of 2019) [2023] KEELRC 902 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/902/eng@2023-04-13

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