Kaume v Madison Insurance Company (K ) Ltd & another (Cause 363 of 2018) [2023] KEELRC 1491 (KLR)
The bottom line
#Kenya's Employment Court ruled that firing someone for poor performance requires documented targets and an improvement plan—not just warning letters.
What this practically means
#Executive summary
#Key legal issues
#Whether there were valid grounds to terminate the claimant
No. Although poor performance is a valid ground under section 41, the Respondent failed to prove a valid and fair reason because it did not follow its own HR manual's performance management process, did not set agreed targets, and had no performance improvement plan.
The Respondent's manual required annual performance targets agreed with the employee, half-yearly reviews and documented corrective action. There was evidence of dissatisfaction (probation extension, warning letters, MD's letter of 29 May 2017) but no documented performance targets or improvement plan. Section 45(2) places the burden on the employer to prove validity and fairness of the reason. The minutes of the disciplinary hearing dealt with matters satisfactorily explained by the claimant, and poor performance was not specifically handled per the minutes yet featured in the termination letter.
Whether the termination procedure was fair
Formal procedural compliance with section 41 was met (hearing with right to a witness), but the employer's own manual procedures and the standards in the authorities on underperformance were not adhered to.
Even though the respondent invited the claimant to a disciplinary hearing in the presence of a witness, the procedure in the respondent's HR manual for performance management was not followed, nor were the requirements in the authorities (Jane Wairimu Machira; Jane Samba Mukala) requiring evaluation measures, sharing of explanations and opportunity to improve. The termination letter also introduced poor performance not specifically handled in the hearing minutes.
Liability of the 2nd Respondent
The 2nd Respondent, as agent/employee of the 1st Respondent, is not liable and judgment is not entered against him.
The court found the 2nd Respondent acted as an agent/employee of the 1st Respondent and was never the claimant's employer; personal liability does not arise.
Legal principles established
#- Poor performance as a ground for termination requires the employer to demonstrate a performance measurement policy, set agreed targets, and put in place a performance improvement plan before termination.
- The proper procedure once poor performance is noted is to point out the shortcomings and give the employee an opportunity to improve over a reasonable length of time (2-3 months).
- The Human Resource Manual is part of the employment contract and must be complied with where not contradicted by the contract.
Court orders
#- 1.Declaration that the 1st Respondent unfairly and wrongfully terminated the claimant's employment
- 2.Award of 3 months' salary as compensation under section 49(1)(c) of the Employment Act, Kshs 377,143.23 x 3 = Kshs 1,131,429/-
- 3.Refusal of judgment against the 2nd Respondent, who was an agent/employee of the 1st Respondent
- 4.Costs of the suit awarded to the claimant
- 5.Interest at court rates from date of judgment until full payment
- Jurisdiction invoked
- Employment Act, sections 41, 45 and 49(1)(c)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kaume v Madison Insurance Company (K ) Ltd & another (Cause 363 of 2018) [2023] KEELRC 1491 (KLR)", Case Analysis (2023). Employment Cause (unspecified number on record). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1491/eng@2023-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.