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ELRCPartially AllowedNot stated in judgment text· [2024] KEELRC 1934 (KLR)

Mbuchi v Software Group Kenya (Cause E718 of 2021) [2024] KEELRC 1934 (KLR)

Employment and Labour Relations Court
18 July 2024
3,992 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled a 'poor performance' dismissal unfair, awarding an employee six months' salary because the employer faked the process.

What this practically means

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Executive summary

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The Claimant, employed as a Project Manager from 19th October 2016, sued the Respondent alleging wrongful and unfair termination of his employment by letter dated 18th June 2021 on grounds of poor performance. He sought declarations of violation of Articles 47, 41, 28, 50(1) and 10 of the Constitution, reinstatement (later abandoned), notice pay, maximum 12 months' compensation, breach of contract damages, house allowance, bonuses, and general damages. The Respondent maintained that the termination was substantively justified and procedurally fair: the Claimant's performance fell short of KPIs, he was given a warning, a performance review, a Performance Improvement Plan with periodic reviews, and 30 days' notice with pay in lieu; it also contended the salary was gross/consolidated and that the bonus claim was unproved special damages. The court framed three issues: substantive fairness, procedural fairness under section 41 of the Employment Act, and entitlement to reliefs. It found the dismissal unfair and unlawful under sections 43, 45 and 47 of the Employment Act, holding that the warning letter was irregular and that the performance scores were manipulated to justify a predetermined termination. The court issued declarations of violation of Articles 47, 41, 50(1) and 10, awarded 6 months' salary as compensation (Kshs. 2,027,994), costs of the suit, and interest at court rates on the compensation from the date of judgment until payment in full. Reinstatement was not granted, being no longer possible; the notice pay, breach of contract, house allowance, bonus and general damages claims did not succeed.

Key legal issues

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01

Whether the termination was substantively justified

Holding

No - the dismissal was unfair and unlawful under sections 43, 45 and 47 of the Employment Act; the reasons were not genuine and the performance scores were manipulated

Reasoning

The court found the warning letter of 21st December 2020 referencing September 2020 incidences was irregular and fictitious in content, and that the evaluation report was manipulated to portray the Claimant as a poor performer. There was no established tool or system relied upon to measure the Claimant's performance before the PIP, the PIP ran for four weeks instead of the six weeks communicated, and no appraisal followed the PIP. The court concluded the process had a predetermined outcome.

p. 7
02

Whether procedural fairness under section 41 was observed

Holding

No - the Respondent violated the Claimant's rights to fair administrative action, fair labour practices and a fair hearing

Reasoning

The court found that no show cause letter was issued and no disciplinary hearing was conducted before termination. The PIP process was a mere formality done to demonstrate compliance with due process. Accordingly, declarations of violation of Articles 47, 41, 50(1) and 10 were issued.

p. 7
03

Whether the Claimant is entitled to the reliefs sought

Holding

Partially - 6 months' salary compensation awarded; reinstatement abandoned, bonuses and house allowance claims failed

Reasoning

As a successful litigant, with reinstatement not possible, the Claimant received 6 months' salary compensation of Kshs. 2,027,994 plus costs and interest. However, the bonus claim failed as unproved special damages, the house allowance claim failed because the salary was gross/consolidated under clause 4(a), and notice pay and breach of contract claims were not pursued.

p. 7

Legal principles established

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  • For a termination to pass the fairness test, there must be both substantive justification and procedural fairness
  • Termination on grounds of poor performance places a high burden on the employer to prove performance measurement mechanisms and a genuine PIP
  • Constitutional petitions should not be used to disguise ordinary contractual labour disputes (doctrine of constitutional avoidance)
  • Gross salary is basic salary plus all allowances
  • He who alleges must prove (section 107 Evidence Act) and courts will not award unproved special damages

Court orders

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  1. 1.Declaration that the Respondent violated the Claimant's rights to fair administrative action under Article 47 and fair labour practices under Article 41
  2. 2.Declaration that the Respondent violated the Claimant's right to a fair hearing under Article 50(1) and rights under Article 10 of the Constitution
  3. 3.Award of 6 months' salary as compensation for the unlawful dismissal - Kshs. 2,027,994/-
  4. 4.Costs of the suit
  5. 5.Interest at court rates on the compensation sum from date of judgment till payment in full

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 10, 28, 41, 47, 50(1), 50(2)
  • Employment Actsections 10(5), 31, 41, 43(2), 45, 47
  • Employment and Labour Relations Actsection 12(3)(vii)
  • Evidence Actsection 107

Cases cited (18)

  • Mary Chemweno Kiptui v Kenya Pipeline Company Limited
    [2014] eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • Jane Samba Mukala v Ol Tukai Lodge Limited
    [2013] eKLR
  • National Bank of Kenya v Samuel Nguru Mutonya
    [2019] eKLR
  • Benedict Mtoto Mwabili v County Public Service Board Taita Taveta County
    [2018] eKLR
  • Judicial Service Commission v Gladys Boss Shollei & another
    [2014] eKLR
  • Kiilu v Isinya Resorts Limited
    (Cause E022 of 2021) [2022] KEELRC 13240 (KLR)
  • Grace Bosibori Nyamongo v Kenya Institute of Administration
    [2014] eKLR
  • Benson K. Nguti v Kenfreight (EA) Ltd
    [2014] eKLR
  • Kenfreight (E.A.) Limited v Benson K. Nguti
    [2016] eKLR
  • Kenfreight (E.A.) Limited v Benson K. Nguti
    [2019] eKLR
  • Charloy Sikuku Madiangi v Bunson Travel Service Limited
    [2018] eKLR
  • Gabriel Matava & 2 others v Managing Director Kenya Ports Authority & another
    [2016] eKLR
  • Jane Wairimu Machira v Mugo Waweru and Associates
    [2012] eKLR
  • Leonard Gethoi Kamweti v National Bank of Kenya Limited
    [2020] eKLR
  • Nisha Nileshbhai Bhavsar v Kensalt Limited
    [2022] eKLR
  • Evans Otieno Nyakwana v Cleophas Bwana Ongaro
    [2015] eKLR
  • Douglas Kalafa Ombeva v David Ngama
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Act, Article 162(2) of the Constitution (implied by the claim's framing under Articles 41, 47, 50(1) and 10); not expressly cited

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, "Mbuchi v Software Group Kenya (Cause E718 of 2021) [2024] KEELRC 1934 (KLR)", Case Analysis (2024). Not stated in judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1934/eng@2024-07-18

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