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ELRCDismissedCause No 1305 of 2018· [2023] KEELRC 1750 (KLR)

Njeru v Vision Fund Kenya Limited (Cause 1305 of 2018) [2023] KEELRC 1750 (KLR)

Employment and Labour Relations Court
14 July 2023
JRJAMES RIKA
3,226 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled that refusing to sign a mandatory performance agreement amounts to insubordination justifying fair termination, and employees cannot demand redundancy.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent (formerly Kadet Limited) from November 11, 2003, was redeployed in December 2014 from Communications and Events Coordinator to Recovery Officer following a business re-organization. She accepted the redeployment subject to training, but refused to sign a mandatory performance agreement, insisting she lacked the qualifications and training for the new role and that she was being set up to fail, and repeatedly requested exit through redundancy. After a show-cause letter and a disciplinary hearing on July 8, 2015, her contract was terminated on August 12, 2015 for insubordination and refusal to cooperate. She sued for a declaration that the termination was unfair, terminal dues, notice pay, severance and twelve months' salary equivalent. The Respondent maintained that she was trained on-the-job, that the performance agreement was mandatory for all employees, and that her refusal amounted to gross misconduct. The Court framed three issues: fair procedure, valid reason, and remedies. It found the Claimant received the minimum statutory standards of fairness, having been informed of the charge, heard and her representations considered. On substance, her persistent refusal to sign the performance agreement constituted insubordination under Section 44(4)(e), giving the Respondent valid and fair reason under Sections 43 and 45. The Court held redundancy is declared by employers, not demanded by employees, and re-designation is the employer's prerogative. The claim was dismissed with no order as to costs, judgment delivered electronically on July 14, 2023 by James Rika, Judge.

Key legal issues

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01

Whether the termination procedure was fair under Sections 41 and 45

Holding

The procedure was fair; the Claimant knew the charge against her, made representations, and was heard at a disciplinary hearing.

Reasoning

The Claimant was informed her role was no longer strategic and was redeployed. She engaged the Respondent for months over the performance agreement, received a show-cause letter, responded, and attended a disciplinary hearing where her position was considered. The Respondent adhered to its HR Manual and the Employment Act, satisfying the minimum statutory standards of fairness.

p. 5
02

Whether there was valid reason for termination under Sections 43 and 45

Holding

There was valid reason: persistent insubordination in refusing to sign a mandatory performance agreement.

Reasoning

The Claimant accepted redeployment and signed the new contract but refused for about 7 months to sign the performance agreement required of every employee. Her demands for training were met through on-the-job training at Eastlands Branch and field work. Her claim that she lacked qualifications was irrational since the employer did not require a degree. Her conduct constituted gross misconduct justifying summary termination.

p. 6
03

Whether redeployment was disguised redundancy

Holding

It was not; re-designation is an employer prerogative and redundancy cannot be declared at an employee's request.

Reasoning

The employer stated there was no redundancy situation. The Claimant was merely re-designated to a new role and her contract continued. She could not demand exit through redundancy; if dissatisfied she could resign on notice. The former CEO explained re-designation was entirely the employer's prerogative.

p. 6

Legal principles established

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  • Redundancy is a decision made by the employer based on a real redundancy situation; employees cannot demand exit through redundancy.
  • It is the employer, not the employee, who sets the requirements and qualifications for a role.
  • Refusal to sign a mandatory performance agreement amounts to insubordination under Section 44(4)(e) of the Employment Act.

Court orders

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  1. 1.The Claim is dismissed.
  2. 2.No order on the costs.

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 43
  • Employment ActSection 44(4)
  • Employment ActSection 44(4)(e)
  • Employment ActSection 45
  • Electronic Case Management Practice Directions, 2020Practice Direction No. 6(2)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 41, 43, 44(4) and 45)

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, "Njeru v Vision Fund Kenya Limited (Cause 1305 of 2018) [2023] KEELRC 1750 (KLR)", Case Analysis (2023). Cause No 1305 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1750/eng@2023-07-14

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