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ELRCPartially Allowed· [2023] KEELRC 2347 (KLR)

Thuo v Samba Pharmaceuticals Limited (Cause 596 of 2016) [2023] KEELRC 2347 (KLR)

Employment and Labour Relations Court
28 September 2023
MMM. Mbaru
1,297 words in judgment
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The bottom line

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Kenya's Employment Court confirmed that even poor performance cannot justify firing an employee without first giving them notice of the reasons and a chance to be heard.

What this practically means

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Executive summary

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The claimant, a medical representative employed on 3 February 2015 at a monthly salary of Kshs. 37,602, sued the respondent alleging that his employment was terminated without notice or reasons. He was summoned to a meeting on 16 May 2016 where he was told sales had reduced, and was later served with a letter of termination. The respondent, which did not attend the hearing or call any witness, asserted in its response that the claimant was dismissed on 18 May 2016 for indolence and failure to meet set targets, relying on a contractual clause permitting termination for failure to meet targets, and that all terminal dues of Kshs. 42,788 had been paid. The court framed two issues: whether the termination was unfair, and whether remedies should issue. Applying section 41 of the Employment Act, 2007, the court held that an employee must be given notice of the grounds and a fair chance to make representations before termination, even for gross misconduct, and that a termination-at-will clause cannot override the statutory requirements of hearing and reasons. The court found the termination unlawful and unfair and, under sections 45 and 49, awarded compensation of four months' gross salary (Kshs. 150,408). Claims for unpaid salary balance, severance pay, leave pay and difference in tabulation were refused as already paid or without basis. A certificate of service was ordered under section 51, and the claimant was awarded costs of the suit.

Key legal issues

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01

Whether the termination of the claimant's employment was unfair

Holding

The termination was unlawful and unfair because the respondent did not accord the claimant a hearing or follow due process before terminating him for alleged poor performance

Reasoning

Section 41 of the Employment Act mandates notice stating the grounds and a fair chance for the employee to make representations in the presence of a fellow employee of choice. The respondent terminated the claimant for alleged indolence and failure to meet targets without any hearing. A contract clause permitting termination for failure to meet targets cannot oust these statutory requirements, and termination at will is regulated in law. The court found unfair termination under sections 45 and 49.

p. 3
02

What remedies should issue

Holding

Compensation of four months' gross salary (Kshs. 150,408), a declaration of unfair termination, a certificate of service, and costs; other dues claims refused

Reasoning

Having worked one year and three months, compensation equivalent to four months' gross salary at Kshs. 37,602 was found appropriate. Notice pay had already been deposited, leave pay paid, severance pay inapplicable absent redundancy, and the difference-pay claim lacked basis. A certificate of service is mandatory under section 51.

p. 3

Legal principles established

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  • An employee must be accorded a hearing before termination of employment, even for gross misconduct or poor performance, as required by section 41 of the Employment Act
  • A contractual clause allowing termination at will for failure to meet targets is regulated by the statutory requirements of notice, hearing and reasons under sections 41, 43 and 44 of the Employment Act

Court orders

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  1. 1.A declaration that employment terminated unfairly
  2. 2.Compensation awarded at Kshs. 150,408
  3. 3.A certificate of service shall issue in terms of section 51 of the Employment Act, 2007
  4. 4.Costs of the suit to the claimant
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 41, 43, 44, 45, 49 and 51 applied)

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, "Thuo v Samba Pharmaceuticals Limited (Cause 596 of 2016) [2023] KEELRC 2347 (KLR)", Case Analysis (2023). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2347/eng@2023-09-28

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