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ELRCPartially AllowedMemorandum of Claim dated 19th March 2018 (ELRC Cause)· [2025] KEELRC 60 (KLR)

Andera v Aimsoft Limited (Employment and Labour Relations Cause 1791 of 2017) [2025] KEELRC 60 (KLR)

Employment and Labour Relations Court
16 January 2025
5,503 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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A Kenyan employer who fires an employee for poor performance without a hearing or performance improvement plan must pay compensation, notice pay, and unpaid pension contributions.

What this practically means

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Executive summary

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The Claimant, employed from 14th January 2013 as a Business Development Manager on a permanent and pensionable contract, sued the Respondent for unfair termination following her dismissal on 27th June 2017 on grounds of poor performance, claiming loss of employment for 20 years, service pay, notice pay, unremitted NSSF and CIC pension contributions, interest and costs. The Respondent maintained the dismissal was fair, that the Claimant never met her business targets, that commissions were not payable, and that all terminal dues were paid. The Court, per Ocharo Kebira J, framed two issues: the fairness of the termination and entitlement to reliefs. On fairness, the Court held that payment in lieu of notice does not displace sections 41 and 45 of the Employment Act; no show cause letter was issued, no disciplinary hearing was convened, and the Claimant was never placed on a performance improvement plan as required by the Respondent's own HR policy. Budget estimates could not bind the Claimant as performance targets absent concurrence. The termination was found both procedurally and substantively unfair. On reliefs, compensation was capped at five months' gross salary (KShs. 1,038,240) rather than 20 years. Unremitted NSSF and CIC pension contributions were awarded because the employer, as custodian of records under section 74, failed to produce records to rebut the claim. Notice pay was awarded as payment was unproven. Service pay was declined as the Claimant was an NSSF member under section 35para 6. Judgment was entered for the Claimant with compensation, notice pay, contributions, interest and costs.

Key legal issues

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01

Procedural fairness of termination

Holding

Termination was procedurally unfair as no show cause letter was issued, no disciplinary hearing was held, and no performance improvement plan was applied.

Reasoning

Section 41 of the Employment Act requires the employer to notify the employee of the grounds for termination and allow representations. The Respondent's witness admitted no show cause letter was issued and no disciplinary hearing minutes existed. The warning letters did not amount to notification of intention to terminate. The Court adopted the reasoning in National Bank of Kenya v Samuel Nguru Mutonyi.

p. 9
02

Substantive fairness of termination for poor performance

Holding

Termination on grounds of poor performance was substantively unfair because the Respondent did not prove performance assessment measures or place the Claimant on a performance improvement plan.

Reasoning

Applying the Jane Samba Mukala criteria, the employer must show a policy for measuring performance, measures taken to address poor performance, and an opportunity to explain. The Human Resource Manual only sketchily provided for PIPs; the Claimant was never placed on one. Budget estimates prepared by the Claimant could not be treated as binding performance targets absent concurrence.

p. 10
03

Unremitted NSSF and CIC Pension contributions

Holding

Claimant succeeded; employer failed to produce records to rebut the claim.

Reasoning

The Claimant specified the months of non-remittance. Under section 74 of the Employment Act the employer is custodian of employee records and should easily have produced records to discount the claim; it did not. The Court rejected the authority suggesting such relief is not awardable, noting section 12 of the ELRC Act liberally construed allows it.

p. 10
04

Notice pay

Holding

Claimant awarded notice pay as the Respondent failed to prove payment of salary in lieu of notice.

Reasoning

Though the Respondent contended the Claimant was paid one month's salary in lieu of notice, it placed no material before the Court showing payment was made, when and how. The Court therefore found the notice pay was not made and awarded KShs. 207,848.

p. 11
05

Service pay / severance pay

Holding

Claim for service pay declined as the Claimant was an NSSF member, excluded by section 35para 6; severance pay under section 40 is only for redundancy.

Reasoning

The Court distinguished severance pay (section 40, redundancy) from service pay (unfair termination claims). Section 35para 6 excludes NSSF members from service pay. The Claimant was a member and thus not entitled; the claim of KShs. 935,316 was declined.

p. 11
06

Quantum of compensation for unfair termination

Holding

Compensation awarded at 5 months' gross salary (KShs. 1,038,240) under section 49para 1[c], not the 20 years sought.

Reasoning

Section 49para 1[c] caps compensation at 12 months' gross salary and the award is discretionary. Considering length of service (about 4.5 years), the Respondent's total disregard of legal requirements on fairness, and the Claimant's expectation under her permanent and pensionable contract, 5 months' gross salary was appropriate.

p. 10

Legal principles established

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  • The burden to prove the fairness of a termination rests with the employer, assessed on the totality of the circumstances.
  • Payment of salary in lieu of notice does not displace the procedural and substantive fairness requirements of sections 41 and 45 of the Employment Act.
  • A budget estimate cannot bind an employee as performance targets absent concurrence between employer and employee.
  • Under section 74 of the Employment Act the employer is custodian of employee records and must produce records to rebut claims for unremitted statutory contributions.

Court orders

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  1. 1.A declaration that the termination of her employment was unfair.
  2. 2.Compensation under section 49[1][c] of the Employment Act for unfair termination of employment, KShs. 1,038,240.
  3. 3.Severance pay, KShs. 467,658.
  4. 4.Notice pay, Kshs. 207, 848.
  5. 5.Unremitted Contributions for Claimant's NSSF Account.
  6. 6.Unremitted Contributions for the Claimant's CIC Pension Scheme account, KShs. 93,625.
  7. 7.Interest on [b] above at court rates from the date of this judgment till full payment.
  8. 8.Interest on the sums awarded in [c] [d] and [e] above at court rates from the date of filling this suit till full payment.
  9. 9.Costs of this suit.

Authorities

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Legislation

  • Employment Act, 2007Section 35[1][c]
  • Employment Act, 2007Section 35[4]
  • Employment Act, 2007Section 35[5]
  • Employment Act, 2007Section 35[6]
  • Employment Act, 2007Section 36
  • Employment Act, 2007Section 40
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 49[1][c]
  • Employment Act, 2007Section 74
  • Employment and Labour Relations Court ActSection 12

Cases cited (5)

  • Theewaterskloof Municipality v Salga
    [2010] 10 BLLR 1216[LC], 1223
  • National Bank of Kenya v Samuel Nguru Mutonyi
    [2019] eKLR
  • Jacob Oriando Ochanda v Kenya Hospital Association Ltd t/a Nairobi Hospital
    [2019]
  • Jane Samba Mukala v Ol Tukai Lodge Limited
    Cause Number 823 of 2010; [2010] LLR 255[ICK]
  • Lunga'tso v Hilwig
    [2022] KEELRC 1375 [KLR]
Jurisdiction invoked
Employment and Labour Relations Court Act, Section 12

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Andera v Aimsoft Limited (Employment and Labour Relations Cause 1791 of 2017) [2025] KEELRC 60 (KLR)", Case Analysis (2025). Memorandum of Claim dated 19th March 2018 (ELRC Cause). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/60/eng@2025-01-16

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