Cheruiyot v The Co-operative Bank of Kenya Ltd (Cause E228 of 2022) [2024] KEELRC 451 (KLR)
The bottom line
#A Kenyan bank's sloppy performance appraisal process made an employee's dismissal unfair, earning him ten months' salary as compensation.
What this practically means
#Executive summary
#Key legal issues
#Whether termination on grounds of poor performance was wrongful, unfair and unlawful
The termination was unfair, unprocedural and unlawful because the performance evaluation was sloppy: targets were issued late, sometimes after the appraisal period, and the claimant was not warned of the consequences nor heard before termination
The court found the claimant demonstrated that performance targets and guidelines were not issued on time, in some instances being notified towards the close of the performance period, contrary to the respondent's own policy. The claimant was given no warning of the implications of the appraisal and was ambushed with a termination letter, with no opportunity to discuss the evaluation or defend himself. On a preponderance of evidence, the claimant's case overwhelmed the respondent's, establishing unlawful termination contrary to Sections 41, 43 and 45 of the Employment Act, 2007.
Whether the Respondent is entitled to its counterclaim for the outstanding loan
Yes; the counterclaim was well documented and unrebutted, and was allowed
The counterclaim concerned an outstanding staff loan of Kshs.2,567,307.91 which continues to earn interest. The respondent documented and evidenced the loan, and the claimant did not rebut it. The court therefore found for the respondent on the counterclaim.
Whether the claimant is entitled to the relief sought
Yes; having succeeded on unlawful termination, the claimant was awarded a declaration, one month's notice pay and 10 months' compensation
Entitlement to relief followed from the finding of unfair termination. The court exercised its discretion to award one month's salary in lieu of notice (Kshs.113,688.85) and ten months' salary as compensation (Kshs.1,136,888.5), totalling Kshs.1,250,577.35, rather than the twelve months and general damages sought.
Legal principles established
#- Performance targets and guidelines must be issued to an employee in a timely manner and the employee warned of the consequences of poor performance before termination on grounds of poor performance; a defective appraisal process renders termination unfair
- An unrebutted, well-documented counterclaim succeeds even where the main claim succeeds
Court orders
#- 1.A declaration that the termination of employment of the claimant by the Respondent was unfair, unprocedural and unlawful and therefore invalid
- 2.One month salary in lieu of notice of Kshs.113,688.85
- 3.10 months' compensation for unlawful termination of employment of Kshs.1,136,888.5
- 4.Each party shall bear their own costs of the Claim
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over a claim of unfair termination under the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Cheruiyot v The Co-operative Bank of Kenya Ltd (Cause E228 of 2022) [2024] KEELRC 451 (KLR)", Case Analysis (2024). Cause No E228 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/451/eng@2024-02-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.