Ngala v Pidilite East Africa Limited (Cause E126 of 2023) [2024] KEELRC 1200 (KLR)
The bottom line
#Kenyan employers cannot fire staff for poor performance without a hearing, performance measures, and genuine help to improve first.
What this practically means
#Executive summary
#Key legal issues
#Fairness of summary dismissal on grounds of poor performance
Termination was unfair; the employer had no performance improvement measures, did not address stockouts raised by the claimant, and no hearing was conducted.
Section 41(1) requires an employer to explain reasons and allow representation before termination. Case law requires demonstrable performance measures and an improvement plan. The respondent sent emails about targets but made no efforts to assist the claimant or address stockouts, so the reason could not be attributed to the employee. The dismissal was unlawful and unfair under Sections 41(1) and 45.
Entitlement to terminal dues - notice pay, July salary, fuel allowance, leave pay
Notice pay of Ksh.100,000, July 2023 salary of Ksh.84,000 for 25 days worked, prorated fuel allowance of Ksh.22,000 and leave pay of Ksh.56,000 for 24 days awarded.
Unfair termination entitles the claimant to notice and compensation. Section 18(4) and (5) prohibits denying pay for labour done despite the loan facility. Fuel allowance accrues with employment for the 25 days worked. The employer, as custodian of records, failed to show leave taken, so the claimed 24 accrued days stand, computed on basic pay.
The car loan facility and counterclaim
Counterclaim allowed only to the extent that the claimant continues repaying the loan at Ksh.22,337 monthly; the respondent may recall the balance at commercial rates on default.
The claimant did not deny owing the car loan and, following the ruling of 25 January 2024, was up to date with repayments. Because the unfair termination deprived him of earnings to service the loan, equity required that he continue repayment at staff preferential rates with an option to offset the balance, rather than an immediate recall and depreciation claim.
Legal principles established
#- Where poor performance is the reason for termination, the employer bears a high level of proof and must show it had measures or a policy in place to measure performance
- An employer must assist and give an employee an opportunity to improve before invoking poor performance as a disciplinary ground
- Without employer mechanisms to assist the employee, reliance on poor performance is unfair under Sections 41(1) and 45 of the Employment Act
Court orders
#- 1.Declaration that employment was terminated unfairly
- 2.Compensation awarded at Ksh.400,000 (four months' gross salary)
- 3.Notice pay Ksh.100,000
- 4.Pay for July 2023 Ksh.84,000
- 5.Leave pay for 24 days Ksh.56,000
- 6.Fuel allowance Ksh.22,000
- 7.Counterclaim allowed to the extent that the claimant shall continue to repay the loan facility on monthly instalments of Ksh.22,337 until paid in full, with the option to pay the total amount at once
- 8.In default of instalments, the respondent shall be at liberty to recall the balance of the car loan facility at commercial rates
- 9.Each party bears its own costs
- Jurisdiction invoked
- Employment Act, 2007 (Sections 41, 45, 28, 51); court's employment and labour relations jurisdiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ngala v Pidilite East Africa Limited (Cause E126 of 2023) [2024] KEELRC 1200 (KLR)", Case Analysis (2024). Cause No E126 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1200/eng@2024-05-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.