Automated Summary
Key Facts
Lilian Atieno Odhiambo was employed by Kamtix Cleaners Limited as a cleaner starting September 1, 2017, under a contract with a six-month probationary period. The Appellant claimed her employment was tied to their outsourcing contract with Kenya Commercial Bank (KCB) and terminated her on October 10, 2020, citing contract expiration and poor performance. The Respondent argued she was unfairly dismissed without notice or a hearing, was paid below the statutory minimum wage (Kshs. 11,000 vs. Kshs. 13,572.90), and was denied leave and house allowance. The trial court ruled her termination unfair and awarded reliefs including notice pay, leave compensation, and 12 months' salary. The appellate court upheld most findings but reduced compensation to six months' salary due to insufficient justification for the original award.
Issues
- Whether the Respondent was entitled to compensation, notice pay, leave dues, house allowance, and a certificate of service as awarded by the trial court
- Whether the termination of the Respondent's employment was fair or unfair under the Employment Act, including procedural and substantive fairness
- Whether the Respondent was under a probationary contract at the time of her termination, considering statutory limits and contractual terms
Holdings
- The termination of the Respondent's employment was found unfair. The Appellant provided conflicting reasons (contract expiration and poor performance) but failed to meet the legal burden of proving procedural and substantive fairness under Sections 41, 43, and 45 of the Employment Act. No performance evaluation mechanisms were demonstrated.
- The Respondent was entitled to reliefs including payment in lieu of notice, unpaid leave, house allowance, and underpayments. The court adjusted the compensation for unfair dismissal from 12 to 6 months' salary but upheld the certificate of service and costs in favor of the Respondent. The Appellant's contractual claims were rejected as inconsistent with statutory obligations.
- The court held that the Respondent was confirmed by operation of law after completing the initial six-month probation period under the 2017 contract. The Appellant failed to prove that the 2019 contract was a new probationary agreement or that the termination was justified by unsatisfactory performance. The Respondent's employment was deemed indefinite post-confirmation.
Remedies
- The Appellant is ordered to bear the costs of the appeal, as determined by the court.
- Compensation for underpayment of Kshs. 2,572.90/month for 32 months (May 2018-December 2020), totaling Kshs. 82,332.80.
- Payment in lieu of one month's notice at Kshs. 13,572.90, as the Appellant failed to provide notice during termination.
- Reduced compensation for unfair dismissal from 12 to 6 months' salary (Kshs. 13,572.90/month), totaling Kshs. 81,437.40.
- Compensation for 63 days of earned but untaken leave (2018-2020) at Kshs. 452.43 per day, totaling Kshs. 28,503.09.
- Mandatory certificate of service under Section 51 of the Employment Act, to be issued within 30 days of judgment.
- Recovery of 15% statutory house allowance for 32 months (May 2018-December 2020) at Kshs. 13,572.90/month, totaling Kshs. 65,149.92.
Monetary Damages
270996.11
Legal Principles
- Section 48 of the Labour Institutions Act mandates compliance with minimum wage orders. The Appellant's contractual salary of Kshs. 11,000 violated the 2018 Wage Order (Kshs. 13,572.90), requiring the employer to prove the salary included statutory allowances—which it failed to do.
- Under Sections 41, 43, and 45 of the Employment Act, the employer bears the burden to demonstrate both procedural and substantive fairness in termination. The Appellant failed to provide sufficient evidence to justify the termination, leading the court to uphold the Respondent's claim of unfair dismissal.
- Section 42 of the Employment Act deems an employee confirmed after the maximum probationary period (12 months with extension). The Respondent was confirmed by operation of law after September 2017, rendering the 2019 'probationary contract' invalid and entitling her to full employment protections.
Precedent Name
- Commercial Bank Limited v Kenya Grange Industries Limited
- Selle & Another v. Associated Motor Boat Co Ltd & Others
- Titus Githinji Nderitu v Consolidated Bank of Kenya Limited
- Pius Machafu Isindu v Lavington Security Guards Limited
- Pheoby Aloo Inyanga v Stockwell One Homes Management Limited & Another
- Jane Samba Mukala v Ol Tukai Lodge Limited
- Amatsi Water Services Company Limited v Francis Shire Chachi
- Vipingo Ridge Limited v Swalehe Ngonge Mpitta
- Grain Pro Kenya Inc. Ltd v Andrew Waithaka Kiragu
- Joaquim Mbithi Mulinge v Transoceanic Projects & Development [K] Limited
- Vice-Chairman & Managing Director v R. Varaprasad & Others
- Danish Jalang'o and John Muthomi Mathiu v Mastermind Tobacco (K) Ltd
- Wanjohi v Kenya Railways Corporation
- Bernard Wanjohi Muriuki v Kirinyaga Water & Sanitation Company Limited & Another
Cited Statute
- Wages (General) (Amendment) Order, 2018
- Employment Act, 2007
- Labour Institutions Act
- Wages (General) (Amendment) Order, 2017
Judge Name
Ocharo Kebira
Passage Text
- 58. The reasons outlined in the letter cannot be regarded as valid and fair for two primary reasons. Firstly, the Respondent's employment contract was not fixed-term with an explicit expiry date of 31st August 2020. Secondly, the Appellant failed to demonstrate the existence of a mechanism for assessing employee performance...
- 47. The effect of this is that where a probationary contract is not expressly extended after the initial probationary period, which in any event shouldn't be more than six months, or if extended to the 12th month, but the employee isn't expressly notified that the contract has been terminated for unsatisfactory performance during that period or that he has been confirmed into employment, by operation of the law, the employee is deemed confirmed upon lapse of the initial period, or extended period.
- 68. However, this does not mean the Respondent was not eligible for the relief. I have carefully examined the process by which the Respondent's employment was terminated, the Appellant's failure to comply with the law's stipulations, specifically those concerning substantive and procedural fairness, and unfair labour practices, as well as the length of her service. I find that she was entitled to the compensatory award. Nevertheless, given that she worked for only three years, I set aside the trial Magistrate's award of twelve months' gross pay and replaced it with six months' gross salary.