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ELRCPartially AllowedMemorandum of Claim filed 8th December 2020 (ELRC, Nairobi)· [2024] KEELRC 1819 (KLR)

Kandiyal v Canaan Factories Company Limited (Cause 6530 of 2020) [2024] KEELRC 1819 (KLR)

Employment and Labour Relations Court
12 July 2024
3,170 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The Claimant, employed as a Sales and Marketing Distribution Manager, sued the Respondent alleging unfair, unlawful and summary verbal termination on 30th January 2020 for 'failing to perform', and sought a declaration, twelve months' salary as damages, three months' notice pay, leave allowance, unpaid salaries, a certificate of service and costs. The Respondent defended the suit, contending that the Claimant served on a two-year fixed-term contract with a twelve-month probation, failed to meet KPIs upon evaluation, and ultimately deserted duty, which it said automatically terminated the contract. The Respondent did not call oral evidence. The court framed two issues: whether the termination was fair and lawful, and entitlement to reliefs. On substantive justification, the court found the Respondent produced no evidence of KPIs, performance-evaluation measures, or any appraisal, and took no steps to trace the alleged deserter; the evidential burden under Sections 43 and 45 of the Employment Act was therefore not discharged. On procedure, no Section 41 hearing or notification occurred. The termination was held both substantively and procedurally unfair. The court also held that a purported one-year probation was contrary to Section 42(2), which caps probation at six months extendable only by agreement, so the Claimant was entitled to three months' notice pay. Compensation was limited to two months' gross salary given the short employment duration. The claims for unpaid salaries and leave allowance failed for lack of particularity and justification. Judgment was entered for Kshs 1,500,000.00 with interest, a certificate of service within 30 days, and costs to the Claimant.

Key legal issues

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01

Substantive justification for termination

Holding

Termination for poor performance was not substantively justified as the Respondent proved no KPIs, no evaluation measures and no appraisal.

Reasoning

Sections 43 and 45 of the Employment Act require the employer to prove a valid and fair reason related to conduct, capacity or compatibility. The Respondent alleged below-par performance against KPIs but adduced no evidence that KPIs were ever issued, that performance was evaluated, or that measures existed to assess performance. Termination was verbal, with no termination letter, so the reason could not be discerned. The evidential burden was not discharged.

p. 4
02

Procedural fairness

Holding

The Respondent failed to comply with Section 41 of the Employment Act; no hearing or notification process was undertaken.

Reasoning

Section 41(1) requires notification of allegations and an opportunity to make representations before termination. There was no evidence or indication that the Claimant was subjected to any such process prior to termination. Applying the four elements from Postal Corporation of Kenya vs Andrew K. Tanui, the Respondent did not prove compliance with the spirit of Section 41 as read with Section 45(2)(c), rendering the termination procedurally unfair.

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03

Probationary status and notice pay

Holding

The Claimant was not on probation as at 30th January 2020 and was entitled to three months' notice or pay in lieu.

Reasoning

Section 42(2) caps probation at six months, extendable only by mutual agreement. The Respondent's assertion of a one-year probation is not supported by the contract, which merely provided for evaluation after one year, and would in any event be contrary to law. No evidence of mutuality to extend probation existed. Consequently the Claimant was a regular employee entitled to three months' notice or payment in lieu.

p. 6

Legal principles established

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  • An employer bears the burden of proving both substantive justification and procedural fairness for termination; where no KPIs, evaluation measures or evidence of appraisal exist, termination for poor performance is not substantively justified.
  • A probationary period cannot exceed six months, extendable by a further six months only with the employee's agreement; a purported one-year probation is contrary to law.
  • Where an employee allegedly deserts duty, the employer must take reasonable steps to ascertain the employee's whereabouts.

Court orders

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  1. 1.Judgment entered in favour of the Claimant against the Respondent
  2. 2.Three (3) months' salary in lieu of notice being Kshs 900,000.00
  3. 3.Compensatory damages of Kshs 600,000.00 equivalent to two (2) months' gross salary
  4. 4.Total award of Kshs 1,500,000.00 with interest at court rates from the date of Judgment until payment in full
  5. 5.Respondent to issue the Claimant with a Certificate of Service within 30 days from the date of the Judgment
  6. 6.Claimant to have the costs of the suit

Authorities

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Legislation

  • Employment ActSections 41, 42(2), 43(1), 45(2)(a), 45(2)(b), 45(2)(c), 51(1)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticles 159(2)(d), 48

Cases cited (7)

  • Cooperative Bank Limited vs Yator
    (Civil Appeal 87 of 2018) [2021] KECA 95 (KLR)
  • Barasa Paul Isaac vs Xfor Security Solutions (Ke) Ltd
    (2015) eKLR
  • Margaret A. Ochieng v National Water Conservation & Pipeline Corporation
    (2014) eKLR
  • National Bank of Kenya vs Samuel Nguru Mutonya
    [2019] eKLR
  • Jane Samba Mukala v Ol Tukai Lodge Limited
    Industrial Cause Number 823 of 2010; (2010) LLR 255 (ICK)
  • Mary Mumbi Kariuki vs Director, Pamoja Women Development Programme
    [2015] eKLR
  • Postal Corporation of Kenya vs Andrew K. Tanui
    [2019] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

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, "Kandiyal v Canaan Factories Company Limited (Cause 6530 of 2020) [2024] KEELRC 1819 (KLR)", Case Analysis (2024). Memorandum of Claim filed 8th December 2020 (ELRC, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1819/eng@2024-07-12

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