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ELRCPartially AllowedNot stated on the face of the judgment (Memorandum of Claim dated 29th July 2019)

Onyango v Family Bank Limited (Employment and Labour Relations Cause E508 of 2019) [2025] KEELRC 471 (KLR)

Employment and Labour Relations Court
19 February 2025
3,279 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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A Kenyan bank was ordered to pay over Kshs 1.5 million for firing an employee over poor performance without a fair hearing or genuine support.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank from 1st October 2015 as a Relationship Officer, Micro Banking – Gikomba, and later transferred to Dagoretti as a Relationship Officer – Personal Banker, sued challenging his termination on 18th January 2018 for poor performance. He sought a declaration that the termination was unlawful, twelve months' salary (Kshs 960,000), one month's notice pay, the return of his repossessed motor vehicle KCM 262K, costs and interest. The respondent admitted the employment but maintained the termination was for valid reason and followed due procedure through a performance improvement plan, that the claimant defaulted on his vehicle loan justifying repossession, and that terminal dues were payable only upon clearance. The court framed three issues: valid reasons, due process, and remedies. It found the three-month PIP inadequate and unsupported by evidence of measures to assist the claimant, and noted the assessment covered a month the claimant was on compulsory leave. Applying section 43 of the Employment Act, it held the respondent failed to prove a valid reason. On procedure, no disciplinary hearing was conducted, breaching section 41. The termination was therefore unfair under section 45(2). The court awarded eight months' salary compensation (Kshs 640,000), one month's notice pay (Kshs 80,000), and the loan value of the repossessed vehicle (Kshs 863,153.30), totalling Kshs 1,583,153.30 less statutory deductions, with costs and interest. Judgment was delivered virtually at Nairobi on 19th February 2025 by Hellen Wasilwa, Judge.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether there were valid reasons to warrant the claimant's termination
  2. 2.Whether the claimant was subjected to due process
  3. 3.Whether the claimant is entitled to remedies sought

Key legal issues

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01

Whether there were valid reasons to warrant the claimant's termination

Holding

No valid reason was established. The three-month performance improvement plan was inadequate and the respondent did not demonstrate measures taken to help the claimant improve; the assessment covered a month when the claimant was on leave.

Reasoning

The claimant was placed on a PIP without a specified duration, then sent on leave for a month in November 2017 and assessed for performance over a period including that month. Relying on Samba Mukaki v Ol Tukai Lodge Ltd and Otieno v Pena Health Ltd, the court held the employer must show supportive measures. Under section 43, the employer failed to prove the reason for termination, rendering it unfair.

p. 6
02

Whether the claimant was subjected to due process

Holding

No due process was followed. The claimant was never subjected to a disciplinary hearing contrary to section 41 of the Employment Act.

Reasoning

After the PIP period, the claimant was simply issued with a termination letter dated 17th January 2018 effective 18th January 2018. There was no indication he was subjected to any disciplinary process, heard, or given ample time to improve, as required by section 41 before termination on grounds of poor performance.

p. 6
03

Whether the claimant is entitled to the remedies sought

Holding

The claimant succeeded on the claim of unfair termination and was awarded 8 months' compensation, one month's notice pay, and the loan value of the repossessed motor vehicle, less statutory deductions, plus costs and interest.

Reasoning

Having found the termination unfair under section 45(2), the court exercised its remedial discretion under section 49 to award 8 months' salary compensation rather than the 12 months sought, plus notice pay. On the repossessed vehicle, the court awarded the claimant its loan value of Kshs 863,153.30 notwithstanding the respondent's evidence of default and repossession proceeds.

p. 7

Legal principles established

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  • In any claim arising out of termination of a contract, the employer bears the burden of proving the reason or reasons for termination, failing which the termination is deemed unfair
  • Where an employee is terminated for poor performance, the employer must demonstrate the measures taken to assess performance and support the employee before terminating the employment
  • Before terminating employment on grounds of misconduct, poor performance or physical incapacity, an employer must explain the reasons to the employee and allow the employee to have a companion present, per section 41 of the Employment Act

Court orders

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  1. 1.Compensation equivalent to 8 months' salary at Kshs 80,000 per month, totalling Kshs 640,000
  2. 2.One month's salary as notice pay of Kshs 80,000
  3. 3.The claimant is entitled to the motor vehicle KCM 262K valued at Kshs 863,153.30 as per the loan value
  4. 4.Total payable of Kshs 1,583,153.30 less statutory deductions
  5. 5.The respondent to pay costs of the suit plus interest at court rates with effect from the date of the judgment

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court under Article 41 of the Constitution of Kenya, 2010 and the Employment Act, 2007 (sections 35, 36, 43, 44, 45, 46, 47, 49 and 51 invoked)

Relief refused

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Twelve months' salary as compensation for unlawful termination (Kshs 960,000)

The court awarded 8 months' compensation instead of the 12 months sought, exercising discretion under section 49 of the Employment Act

p. 7

Return of the physical motor vehicle KCM 262K

The court awarded the loan value of the vehicle (Kshs 863,153.30) rather than delivery of the vehicle itself

p. 7

Costs

The respondent will pay costs of this suit plus interest at court rates w.e.f the date of this judgment

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In my view 3 (three) months he was placed on PIP were not adequate. There is no indication of what the respondents did to help him improve.
p. 6Inadequacy of performance improvement plan before termination
it is my finding that the respondents did not establish the existence of valid reason to warrant the dismissal of the claimant as provided for under section 43 of Employment Act 2007
p. 6Employer's burden of proof on reasons for termination
On this issue, there is no disciplinary process the claimant was subject to.
p. 6Absence of due process under section 41 of the Employment Act
I therefore find for claimant and I award her: 1. Compensation equivalent to 8 months’ salary = Kshs 80,000x8=640,000/- 2. I also award her 1 months’ salary as notice pay = Kshs 80,000/-.
p. 7Final orders - compensation and notice pay
The respondent will pay costs of this suit plus interest at court rates w.e.f the date of this judgment.
p. 7Costs and interest order

Issues in the judgment

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minor

The judgment refers to the claimant as 'her' in the disposition although the claimant is described as male ('he') throughout the judgment

minor

Internal inconsistency in dates: the transfer letter is stated as dated 7/2/2016 with effect from 16/2/2017 in one passage, while the pleadings state the transfer took effect 16th February 2016

material

The vehicle awarded at full loan value (Kshs 863,153.30) notwithstanding the respondent's unchallenged evidence that repossession recovered Kshs 350,617.80 and an outstanding balance remained; the court did not reconcile this

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, "Onyango v Family Bank Limited (Employment and Labour Relations Cause E508 of 2019) [2025] KEELRC 471 (KLR)", Case Analysis (2025). Not stated on the face of the judgment (Memorandum of Claim dated 29th July 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/471/eng@2025-02-19

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