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ELRCPartially AllowedCause No 422 of 2018· [2024] KEELRC 70 (KLR)

Kibui v Kenya Orient Life Assurance Limited (Cause 422 of 2018) [2024] KEELRC 70 (KLR)

Employment and Labour Relations Court
30 January 2024
3,347 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that an employee whose six-month probation expired without formal extension is automatically confirmed, so dismissing them without a hearing is unfair.

What this practically means

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Executive summary

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The Claimant sued for unfair termination of employment, having been employed on 13th February 2017 as a Unit Manager and summarily dismissed on 6th September 2017 on grounds of unsatisfactory performance. She sought a declaration of unfair termination, general damages, earnings till retirement age, and costs. The Respondent contended she was dismissed during probation, which required no hearing. The court framed three issues: the status of employment at dismissal, the fairness of the dismissal, and entitlement to reliefs. It held that the six-month probation lapsed on 13th August 2017 and, absent any formal extension by the Respondent, the Claimant was deemed confirmed by operation of law. On substance, the Balance Score Card relied on was defective - undated, lacking comments and agreed KPIs, and identifying the Claimant as the appraiser - so the Respondent failed to prove a valid and fair reason under Section 43. On procedure, no show cause letter or hearing under Section 41 preceded the dismissal. The termination was therefore unfair both substantively and procedurally. The court granted a declaration and compensation equal to three months' salary under Section 49(1)(c), considering the short tenure, the Claimant's contribution to the termination, and her lack of interest in reinstatement. General damages and earnings until retirement were declined, the latter as anticipatory earnings with no legal anchorage. Costs and interest were awarded to the Claimant. Judgment was delivered virtually at Nairobi on 30th January 2024.

Key legal issues

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01

Status of employment at date of dismissal

Holding

The Claimant's probationary contract had lapsed after 6 months; with no formal extension, she was deemed confirmed by operation of law

Reasoning

The contract provided for 6 months' probation extendable at the company's option. Section 42(2) of the Employment Act caps probation at 6 months, extendable only with the employee's agreement. The Respondent adduced no board resolution or letter extending probation, so by 6th September 2017 the probation had lapsed and the employee was deemed confirmed.

p. 5
02

Substantive justification - poor performance

Holding

The Respondent failed to prove a valid and fair reason for termination

Reasoning

The BSC on record lacked dates, comments, agreed KPIs, and identified the Claimant as appraiser rather than appraisee. The employer provided no categorization of dismissal grounds and no performance evaluation signed by the supervisor. An employee cannot be appraised on targets never agreed, so the rating of 1.33 lacked context.

p. 6
03

Procedural fairness

Holding

Termination was procedurally unfair as no hearing or show cause letter preceded dismissal

Reasoning

Section 41 prescribes a mandatory procedure before termination. The Respondent's witness admitted there were no show cause letters or hearings for probationary employees and no record of any meeting between the Claimant and her supervisor. The Claimant was never given an opportunity to confront the alleged poor performance or improve it.

p. 7
04

Compensation quantum

Holding

Equivalent of 3 months' salary awarded under Section 49(1)(c)

Reasoning

The court considered the short duration of employment (about 7 months), that the Claimant did not appeal or express a wish to continue in employment, and that she contributed to the termination. These factors justified the equivalent of 3 months' gross salary as fair compensation.

p. 8

Legal principles established

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  • Where an employer fails to confirm an employee after probation, the employee is confirmed by operation of law
  • An extension of probation must be formal and specify its duration
  • Termination must be justified both substantively and procedurally

Court orders

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  1. 1.Declaration that termination of employment was unfair.
  2. 2.Award of the equivalent of 3 months' salary to the Claimant.
  3. 3.Costs of the suit to the Claimant.
  4. 4.Interest at court rates from the date of judgment until payment in full.

Authorities

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Legislation

  • Employment Act, 2007Section 2
  • Employment Act, 2007Sections 41, 43 and 45
  • Employment Act, 2007Section 42(1) and 42(2)
  • Employment Act, 2007Section 45(2) and 47(5)
  • Employment Act, 2007Sections 49 and 49(1)(c)
  • Employment Act, 2007Section 43(2)
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure Act (Chapter 21)Section 1B

Cases cited (12)

  • CMC Aviation Ltd V Mohammed Noor
    (2015) eKLR
  • Jane Nyandiko V Kenya Commercial Bank Ltd
    (2017) eKLR
  • Kenya County Government Workers Union V County Government of Nyeri & another
    (2015) eKLR
  • Air-India Statutory Corporation V United Labour Union (cited in VMK V CUEA (2013) eKLR)
  • Benjamin Nyambati Ondiba V Egerton University
    (2014) eKLR
  • Esther Njeri Maina V Kenyatta University
  • Joseph Kareko Gikonyo V County Government of Lamu & 2 others
    (2022) eKLR
  • Monica Munira Kibuchi & 6 others V Mount Kenya University
    (2021) eKLR
  • Naima Khamis V Oxford University EA Ltd
    (2017) eKLR
  • Jane Samba Mukalla V Ol Tukai Lodge Ltd
    (2013) eKLR
  • Pius Machafu Isindu V Lavington Security Guards Ltd
    (2017) eKLR
  • D. K. Njagi Marete V Teachers Service Commission
    (2019) eKLR
Jurisdiction invoked
Original jurisdiction under the Employment Act, 2007 (unfair termination claim)

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, "Kibui v Kenya Orient Life Assurance Limited (Cause 422 of 2018) [2024] KEELRC 70 (KLR)", Case Analysis (2024). Cause No 422 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/70/eng@2024-01-30

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