Kiogora Mutai t/a Kiogora Mutai & Co. Advocates v Khavagali (Employment and Labour Relations Appeal E110 of 2023) [2025] KEELRC 1717 (KLR)
The bottom line
#A Kenyan court upheld an unfair termination award but halved the compensation, confirming employers must prove poor performance and hold hearings before firing staff.
What this practically means
#Executive summary
#Key legal issues
#Whether the respondent's termination was substantively unfair
The appellant failed to prove poor performance as the reason for termination; no performance appraisal, policy, or alternative figures were produced, and the alleged mutual agreement was unproved.
The court applied section 45(2) of the Employment Act and the high evidential burden for poor-performance terminations from Jane Samba Mukala v Ol Tukai Lodge (approved in National Bank of Kenya v Samuel Nguru Mutonya). The appellant admitted no performance appraisal was done, met-target evidence existed, and no written mutual separation agreement or corroborating witness was produced. The court found no basis to disturb the trial court's finding.
Whether the termination was procedurally fair
The termination violated the mandatory provisions of section 41 of the Employment Act; the lower court's finding of unlawful and unfair termination was upheld.
Under section 41 the employer must explain reasons and hear the employee before termination on grounds of misconduct or poor performance. The appellant admitted in cross-examination that no disciplinary hearing was conducted and that no notice pay was made, undermining his claim of an amicable parting. The court held the section's provisions are couched in mandatory terms.
Whether the maximum 12 months' compensation award was justified
The maximum award was set aside and substituted with 6 months' gross pay (Kshs. 480,000), the trial court having failed to consider all section 49(4) factors.
While the manner of termination was casual and demoralising, the trial court did not weigh all statutory factors, notably the respondent's short service of 1 year and 3 months and the availability of comparable employment to a young advocate. Section 49(4) requires consideration of length of service, employee contribution, and mitigation among other factors.
Service pay entitlement
Service pay award reduced from Kshs. 80,000 to Kshs. 40,000 as the claimant worked only one year; the NSSF defence could not be raised afresh on appeal as the issue was not contested at trial.
The trial court had allowed service pay as uncontested, and the appellant could not raise it anew on appeal. On the merits, no NSSF registration evidence, payslip or conclusive payroll was produced. However, the computation was wrong: 15 days' pay for each year worked over one completed year yields Kshs. 40,000, not 80,000.
Accrued leave days and practising certificate deduction
Leave award upheld as leave is prorated under section 28(1)(b); the Kshs. 1,380 practising certificate deduction award also upheld.
The appellant's argument that leave accrues only after 12 months misapprehended section 28(1)(b), which prorates leave for completed months within a leave-earning period. On the practising certificate, the certificate was paid for in accordance with the employment terms and the deduction was bad faith, particularly as the respondent worked two further days requiring a valid certificate.
Legal principles established
#- The burden of justifying the grounds for termination of employment rests on the employer once the employee lays a basis of complaint of unfair termination
- An employer relying on poor performance must show a performance evaluation policy or practice, measures taken to address poor performance, and give the employee an opportunity to respond before termination
- Termination must satisfy both substantive fairness (valid and fair reason) and procedural fairness under section 41 of the Employment Act
- An appellate court will not interfere with an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate
- Leave entitlement is prorated under section 28(1)(b) of the Employment Act where employment terminates after two or more consecutive months in a leave-earning period
Court orders
#- 1.Appeal partially allowed
- 2.Judgment and Orders of Honourable P.K. Rotich (SPM) of 7 June 2023 in MCELRC No. E736 of 2020 set aside and substituted with: payment in lieu of notice Kshs. 80,000; compensation for unlawful termination equivalent of 6 months' gross pay Kshs. 480,000; accrued leave for 2019 Kshs. 28,000; monies deducted for payment of practising certificate Kshs. 1,380; service pay Kshs. 40,000
- 3.Interest awarded at court rates from date of judgment of the lower court
- 4.Each party to bear own costs in the appeal
- 5.30 days stay granted
- 6.File marked as closed
- On appeal from
- Chief Magistrate's Court at Nairobi (Milimani), Employment and Labour Relations Court division
- MCELRC No. E736 of 2020
- Jurisdiction invoked
- First appellate jurisdiction of the Employment and Labour Relations Court over appeals from subordinate courts (memorandum of appeal under the Employment and Labour Relations Court procedure); judgment cites Selle v Associated Motor Boat Co. on first appellate court duties
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kiogora Mutai t/a Kiogora Mutai & Co. Advocates v Khavagali (Employment and Labour Relations Appeal E110 of 2023) [2025] KEELRC 1717 (KLR)", Case Analysis (2025). Appeal from Milimani CM ELRC E736 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1717/eng@2025-06-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.