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ELRCPartially AllowedNot stated in the judgment (memorandum of claim filed 28th June 2017)· [2023] KEELRC 1168 (KLR)

Muturia & 2 others v Co-operative Bank of Kenya Ltd & 2 others (Cause 1234 of 2017) [2023] KEELRC 1168 (KLR)

Employment and Labour Relations Court
12 May 2023
3,261 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan bank was ordered to pay a former employee Kshs 951,246 for firing him unfairly over poor performance without following the required procedure.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank from 2010 and deployed to Malindi branch as a business banker, was summarily terminated on 15th December 2016 for unsatisfactory performance. He had been invited to a performance review meeting in Nairobi on 31st October 2016 with only a few days' notice, which he attended alone, and was thereafter placed on a three-month performance improvement programme running from December 2016 to February 2017. He was terminated before that period expired. A conciliator had found the termination unfair and recommended twelve months' compensation, which the bank rejected. The court framed two issues: whether the termination was fair and procedurally correct, and whether the claimant was entitled to the reliefs sought. Applying sections 41 and 45 of the Employment Act and the principles in Maina Mwangi v Thika Coffee Mills and National Bank of Kenya v Samuel Mutonya, the court held the procedure flawed: the meeting was not disclosed as disciplinary, notice was too short for an employee working upcountry, and the PIP was cut short. It also found the evaluation tool unreliable because targets were repeatedly revised without clear guidelines, and the termination letter compared the claimant to unspecified 'other bank employees'. The court declared the summary dismissal unfair and unlawful, awarded six months' salary (Kshs 951,246) as compensation under section 49(1)(c), and refused reinstatement, salary arrears and general damages. Costs were awarded to the claimant.

Key legal issues

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01

Whether the termination of the claimant for poor performance was procedurally fair under section 41 of the Employment Act

Holding

The procedure was flawed and contravened section 41: the claimant was invited to what was framed as a performance review, not told it was disciplinary, given too little notice (working in Malindi for a Nairobi meeting), and cut short mid-way through his three-month PIP

Reasoning

The invitation letter referred only to a performance improvement programme review meeting, with no indication it was disciplinary. The claimant had no adequate time to prepare or bring a fellow employee or union representative. He was placed on a three-month PIP from December 2016 to February 2017 but terminated on 15th December 2016 before the period expired. The court found the respondent rushed to terminate despite possibly having reasons, failing to follow the correct procedure.

p. 9
02

Whether the performance evaluation system and reasons for termination were substantively fair under section 45

Holding

The evaluation tool was unreliable: targets were repeatedly revised without explanation and the termination letter compared the claimant to unspecified 'other bank employees', so the reason for termination was not validly established

Reasoning

The respondent's witness admitted the performance target was revised within a year from roughly Kshs 47 million to Kshs 87 million and finally Kshs 107 million, corroborating the claimant's complaint of shifting targets with no clear guidelines. The comparison in the termination letter to 'other bank employees' lacked specificity. The court also noted an 'excellent' rating in February 2016 inconsistent with the narrative of sustained poor performance.

p. 7
03

What remedies are due where summary dismissal on grounds of poor performance is unfair

Holding

Six months' equivalent salary under section 49(1)(c) was reasonable compensation given roughly six years of service; reinstatement, salary arrears and general damages were refused

Reasoning

The claimant served about six years. The court fixed compensation at six months of his Kshs 158,541 monthly salary, totalling Kshs 951,246, holding this sufficient to cover general damages in total, and declined prayers 3 and 5.

p. 9

Legal principles established

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  • Where termination is for poor performance, an employee must be notified of his shortcomings, given a reasonable period to improve, and afforded the section 41 Employment Act procedure before termination
  • An employer bears a high level of proof in poor-performance terminations and must demonstrate a stable performance evaluation policy or practice
  • Targets or evaluation parameters that keep shifting without clear guidelines undermine the fairness of a performance-based termination

Court orders

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  1. 1.A declaration that the summary dismissal of the claimant was unfair and unlawful; judgment entered in the claimant's favour
  2. 2.The respondent to pay the claimant six months' equivalent salary as compensation, being Kshs 158,541 multiplied by 6, totalling Kshs 951,246/-
  3. 3.Costs of the suit awarded to the claimant
Jurisdiction invoked
Employment and labour relations dispute under the Employment Act 2007 (sections 41, 42, 45, 49) before the Employment and Labour Relations Court

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, "Muturia & 2 others v Co-operative Bank of Kenya Ltd & 2 others (Cause 1234 of 2017) [2023] KEELRC 1168 (KLR)", Case Analysis (2023). Not stated in the judgment (memorandum of claim filed 28th June 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1168/eng@2023-05-12

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