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ELRCPartially AllowedNot stated in judgment· [2023] KEELRC 1866 (KLR)

Mwangi v Kenol-Kobil Limited (Cause 587 of 2017) [2023] KEELRC 1866 (KLR)

Employment and Labour Relations Court
3 July 2023
3,987 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 Kenol Kobil unfairly fired a 25-year employee without evidence of poor performance, awarding her over Kshs. 14 million.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from March 1992 and last serving as Special Products Manager earning Kshs. 700,000 monthly, was terminated with effect from February 13, 2017 on grounds of poor performance and restructuring. She claimed the termination was unfair, lacked notice or hearing, and was in substance a redundancy disguised as termination targeting long-serving, high-earning employees ahead of the company's sale. The Respondent maintained the termination was justified by deteriorating performance and procedural. The court found that the Claimant had been rated 'Very Good' in her 2016 appraisal and received a performance bonus in December 2016, yet was dismissed two months later without any evidence of poor performance or a performance improvement programme. The Respondent's own witness conceded no evidence of drastic deterioration was provided. The court held it was a classic case of dismissing first and looking for a reason later, rendering the dismissal unfair and unlawful. The court awarded two months' notice pay (Kshs. 1,400,000), severance pay for 25 years at 15 days' pay per year (Kshs. 8,750,000), six months' salary as compensation for unfair termination (Kshs. 4,200,000), a certificate of service under section 51 of the Employment Act, and interest on those sums from the date of judgment. The claims for 12 months' compensation (reduced to six), unpaid leave days, the vehicle logbook, and 13 days' salary for February 2017 (held time-barred under section 90 of the Employment Act) were refused. No express costs order appears in the disposition.

Key legal issues

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01

Validity of the reason for termination

Holding

The reason of poor performance was not validly established; the dismissal was unfair and unlawful

Reasoning

The Claimant had been rated 'Very Good' in her June/July 2016 appraisal and received a bonus of Kshs. 500,000 in December 2016 for good performance. Two months later the Respondent alleged drastic deterioration. The Respondent led no evidence of poor performance or of a performance improvement programme, and its own witness confirmed no evidence of deterioration was provided. The discrepancy between the December 2016 letter and the termination letter showed the reason was an afterthought.

p. 7
02

Procedural fairness of the termination

Holding

No fair procedure was followed; no notice, warning or hearing preceded the dismissal

Reasoning

Section 45 of the Employment Act requires both a valid reason and a fair procedure. The Respondent's HR Manual prescribed a multilevel disciplinary process, but none was initiated. The Claimant was summoned by telephone on a Friday and handed a termination letter the following Monday, effective three days later, without any opportunity to respond to the allegations.

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Limitation of the claim for 13 days' salary for February 2017

Holding

The claim was time-barred under section 90 of the Employment Act as it was introduced only in the March 2022 amendment

Reasoning

The cause of action for salary accrued in February 2017, but the Claimant only introduced the claim when amending her Memorandum of Claim in March 2022, over four and a half years later. The limitation period in section 90 applies to employment contract claims and was not extended. Her late claim also amounted to acquiescence in the non-payment.

p. 7
04

Entitlement to reliefs on finding of unfair termination

Holding

The Claimant was awarded notice pay, severance pay for 25 years, six months' compensation and a certificate of service, with interest

Reasoning

Having established unfair termination, the Claimant was entitled to reliefs under sections 49 and 51 of the Employment Act. The court exercised its discretion to award six rather than twelve months' salary as compensation, and granted severance at 15 days' pay per year for the 25 years served, plus two months' notice pay, a certificate of service and interest from the date of judgment.

p. 7

Legal principles established

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  • An employer must have a valid reason for dismissal before terminating, evidenced by proof of poor performance and a performance improvement process
  • Where an employee's recent appraisals were positive and no appraisal followed, a sudden assertion of drastic performance deterioration is unsupported and the dismissal is unfair

Court orders

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  1. 1.Two months' salary in lieu of notice – Kshs. 1,400,000/-
  2. 2.Severance pay for the 25 years worked at the rate of 15 days' pay – Kshs. 350,000 x 25 years = Kshs. 8,750,000/-
  3. 3.6 months' salary as compensation for unfair termination – Kshs. 4,200,000/-
  4. 4.Certificate of service in terms of section 51 of the Employment Act
  5. 5.Interest at court rates on the sums in i), ii) and iii) from the date of judgment till payment in full
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Industrial Court Act (sections 12(3)(vi), 45, 49, 51 and 90 of the Employment Act invoked by the parties)

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, "Mwangi v Kenol-Kobil Limited (Cause 587 of 2017) [2023] KEELRC 1866 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1866/eng@2023-07-03

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