Okumu v Prime Power Batteries E.A. Limited (Cause E176 of 2021) [2024] KEELRC 1229 (KLR)
The bottom line
#A Kenyan court ruled an employer's termination unfair because it couldn't pick between poor performance and redundancy, awarding the employee about Kshs. 721,000 plus costs and interest.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Claimant was an employee of the Respondent
- 2.Whether the Respondent had a valid reason for terminating the Claimant's employment
- 3.Whether the Claimant is entitled to the terminal benefits sought in the Statement of Claim
- 4.Who should bear the cost of the suit and interests
Key legal issues
#Validity of the reason for termination
The Respondent failed to demonstrate a valid reason; the inconsistent claims of poor performance and redundancy rendered the termination unfair and unlawful
The Respondent asserted poor performance but also suggested redundancy. The Court held these are mutually exclusive grounds with distinct statutory procedures. The witness's testimony that the Claimant received pay rises despite alleged poor performance undermined the Respondent's case. Failure to prove the reason implicates unfairness under sections 43 and 45 of the Employment Act.
Procedural fairness in termination
No notice or hearing preceded the termination; poor performance is not a ground for summary dismissal under section 44, entitling the Claimant to notice pay
The Claimant was neither given notice nor an opportunity to be heard. A poor performer should be placed under a performance improvement programme before termination under section 41. Redundancy would require the section 40 procedure. As neither procedure was followed and poor performance does not justify summary dismissal, the Claimant was entitled to notice pay in addition to compensation.
Entitlement to service pay
Claim for service pay disallowed because the Claimant did not prove he was not an NSSF member
Section 35(6)(d) of the Employment Act excludes service pay for employees who are members of the National Social Security Fund. The burden lay on the Claimant to establish he was not such a member. Having failed to do so, the claim for service pay/gratuity could not succeed notwithstanding the unfair termination finding.
Legal principles established
#- An employee cannot lawfully be terminated simultaneously on grounds of poor performance and redundancy; each ground has distinct statutory procedures that cannot be conflated
- Failure by an employer to demonstrate the reason for termination renders the dismissal unfair and unlawful under sections 43 and 45 of the Employment Act
- Service pay under section 35 of the Employment Act is payable only where the employee is not a member of the NSSF
- Poor performance is not among the grounds justifying summary dismissal under section 44 of the Employment Act
Court orders
#- 1.Underpayment in August 2020 – Kshs. 11,650/-
- 2.One month's salary in lieu of notice – Kshs. 101,388.75
- 3.6 months salary as compensation – Kshs. 608,332.50
- 4.Costs of the suit to the Claimant
- 5.Interest at court rates on the sum in (a) from the date of filing suit till payment in full
- 6.Interest at court rates on the sums in (b) and (c) from the date of judgment till payment in full
- 7.Certificate of service in terms of section 51 of the Employment Act
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)
Relief refused
#Service pay/severance pay
The Claimant did not demonstrate that he was not a member and contributor to the NSSF, which would exclude entitlement to service pay under section 35(6)(d) of the Employment Act
Declaration of liability for discriminatory conduct
Not addressed or awarded by the Court in the judgment or final orders
Compensation of 12 months' salary
The Court awarded 6 months instead, capping compensation given the short period of service and manner of termination
Costs
Costs of the suit awarded to the Claimant, with interest at court rates on the underpayment sum from filing suit, and on the notice pay and compensation from the date of judgment till payment in full.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
A careful reading of the two sections of the Act demonstrates that one cannot be terminated for both poor performance and redundancy.
Failure to demonstrate reason implicates the decision to terminate to be unfair and unlawful within the meaning of section 45 of the Act.
It is ridiculous for an employer to reward an employee with increments in salary when the employee is a poor performer.
In the final analysis, I enter judgment for the Claimant against the Respondent for: a. Underpayment in August 2020 – Kshs. 11,650/-
Issues in the judgment
#The Respondent's defence is internally contradictory, claiming simultaneously that no terminal dues are owed and that all dues were paid; the Claimant flagged this and the Court did not expressly resolve it
The case number, cause number and full party names are not stated in the judgment text provided
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Okumu v Prime Power Batteries E.A. Limited (Cause E176 of 2021) [2024] KEELRC 1229 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1229/eng@2024-05-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.