Njioka v Magadi Soda Company Limited (Cause 664 of 2010) (Civ) [2011] KEIC 2 (KLR)
The bottom line
#A Kenyan court awarded a sacked HR manager 12 months' salary because her employer couldn't prove poor performance or follow fair procedure.
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's termination was for a valid reason related to her conduct, capacity or the respondent's operational requirements
- 2.Whether the procedure used to terminate the claimant's employment was lawful and fair
- 3.What remedies, if any, the claimant is entitled to
Key legal issues
#Whether the dismissal was for a valid reason under section 45 of the Employment Act 2007
The respondent failed to prove valid reason; the allegation of poor performance was unsupported by documentary evidence and contradicted by the Managing Director's merit award letter
Other than the 2006/07 audit reports, there was no documentary evidence of poor performance. The credibility of the audit was doubtful given the Managing Director's letter of 20th April 2007 congratulating the claimant and awarding a 5% merit increase. The claimant had been confirmed after probation, making persistent poor performance incredible, and there was no documented record of shortcomings or improvement procedures. The court therefore concluded poor performance did not precipitate the dismissal.
Whether the termination procedure was lawful and fair
The respondent flouted the Employment Act, natural justice and its own disciplinary procedure; termination was unlawful and unfair
The respondent's disciplinary procedure required the employee to be informed of the offence and contemplated disciplinary action and given an opportunity to prepare a defence. The rules of natural justice, echoed by section 41 of the Employment Act, are mandatory in all disciplinary cases. No allegations were communicated in advance, no written warning or documentation existed, and the claimant was handed a termination letter at the same meeting where dissatisfaction was raised. The deviation rendered the termination unlawful on both substantive and procedural grounds.
Appropriate remedies for unlawful termination
Maximum compensation of twelve months' salary awarded; claims for salary to retirement, reinstatement and uncontracted benefits refused
The court considered the claimant's age (51), the difficulty of securing alternative employment, and the stigma of being wrongly labelled an underperformer, finding this a fitting case for maximum compensation of twelve months' salary. However, the contract was not a lifelong commitment, the duty to mitigate applied, the parties' relationship had broken down irretrievably, and benefits such as water, electricity and furniture were not provided for in the contract.
Legal principles established
#- An employer must prove a valid reason and follow a fair procedure before terminating an employee for poor performance; the employee must be informed of the shortcomings and given a reasonable opportunity to improve over time
- Disciplinary matters must be documented; they should not be left to the realm of oral engagement
- The rules of natural justice are mandatory in all disciplinary cases, echoed by section 41 of the Employment Act 2007
Court orders
#- 1.A declaration that the claimant suffered unfair termination of her contract of employment
- 2.Payment of Kshs 4,830,576.00 by the respondent to the claimant, being twelve (12) months' salary as compensation for unlawful termination of her employment, in addition to the terminal dues already paid
- 3.The claimant to have the costs of the suit
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- Jurisdiction invoked
- Jurisdiction of the Industrial Court over employment and labour relations disputes (memorandum of claim filed in Cause 664 of 2010); claims founded on the Employment Act 2007
Relief refused
#Salary for 49 months to retirement (Kshs 19,724,852)
No basis in law; the contract was not a lifelong commitment and the claimant had a duty to mitigate
Reinstatement
The relationship between the parties had broken down irretrievably
Remunerable benefits in lieu of notice (water, electricity, furniture, house rent)
Not provided for in the contract of employment; no values attached to the free housing benefits
Damages for breach of trust and confidence
Not provided for by the Employment Act
Claim that dismissal was motivated by ethnic or gender discrimination
Court was unable to establish the alleged motivation
Costs
The claimant will have the costs of the suit in view of the respondent's conduct in the matter
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.
That the claimant sufiered unfair termination of her contract of employment.
That in addition to the terminal dues already paid to the claimant as per the letter of termination, the respondent is directed to pay the claimant Kshs 4,830,576.00 being twelve (12) months salary being compensation for unlawful termination of her employment.
That the claimant will have the costs of the suit in view of the respondent's conduct in the matter.
In the circumstances the respondent has failed to demonstrate that the claimant was dismissed for a valid reason related to her conduct, incapacity, incompatibility or related to the respondent's operational requirements as required under section 45 of the Employment Act 2007. The respondent has therefore failed to discharge the burden of proof thrust on its shoulders under section 43 of the Employment Act 2007.
The illegality of the respondent's action is therefore two fold. Firstly, the respondent has failed to prove that there was a valid reason to justify the claimant's dismissal. Secondly, the procedure employed in the efiecting the termination was fiawed.
Whereas the respondent claims that the claimant was moved to difierent jobs to give her a chance to improve, there is no record showing that the movements were disciplinary.
In our view poor performance cannot be dealt with through just one evaluation. The proper procedure once poor performance of an employee is noted is to point out the shortcomings to the employee and give the employee and opportunity to improve over a reasonable length of time.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
Cite this brief
#Cite this brief
Caselaw, "Njioka v Magadi Soda Company Limited (Cause 664 of 2010) (Civ) [2011] KEIC 2 (KLR)", Case Analysis (2011). Cause 664 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2011/2/eng@2011-06-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.