REPUBLIC OF KENYA
IN THE EMPLOYMENT AND LABOUR RELATIONS COURT OF KENYA AT MOMBASA
CAUSE NO.E130 OF 2023
RICARDO MWANDAU MWANYAMBU ………………………………..…. CLAIMANT
VERSUS
GOLDEN KEY CASINO LIMITED ………………………………..…. RESPONDENT
JUDGMENT
The claimant is a male adult. The respondent is a limited liability company carrying out a casino, gaming and other related business at the Tamarind Mombasa Restaurant under the Tamarind Group Service.
The respondent employed the claimant on 1st August 1997 as a junior trainee dealer and rose to assistant casino manager, which he held until 12 July 2023 when his employment was terminated.
The claim is that in April 2022, the respondent hatched a plan to frustrate the claimant in his employment. The plan was covered under the guise of a performance appraisal exercise. On 28 April 2022, the claimant was subjected to a performance appraisal by his immediate supervisor, the Casino Manager and a representative from the human resources department. The claimant noted that the appraisal was unfair and he raised his concerns with the respondent. The Casino manager started frustrating the claimant in his duties placing him under a performance improvement plan (PIP) under which he was subjected to various appraisals. He was accused of failing to meet the set targets.
One director, Martin Cunford became aware of these frustrations against the claimant and he noted that an appraisal is supposed to be about coaching and not otherwise. However, this did not stop the harassment and frustrations.
On 14 February 2023 and 14 March 2023, the claimant noted his frustrations and the scheme to terminate his employment. The casino manager ignored his concerns. This resulted in unfair Labour practices and eventually termination of his employment on 12 July 2023. This was without due process, and justified reasons and the claimant is seeking the following terminal dues;
- 12 months compensation Ksh.1,800,000;
- Payment for working for 6 days during rest days Ksh.60,000;
- 34 accrued leave days Ksh.194,146;
- Annual bonus for 7 months Ksh.87,500;
- Damages for constitutional violations Ksh.1,800,000;
- Costs of the suit.
The claimant testified in support of his case that he worked diligently for the respondent for 26 years. However, from events choreographed by his supervisor under a performance appraisal, he was issued a PIP under which he was frustrated resulting in the termination of his employment. A new performance tool had been introduced without prior guidance on how to address it and when he raised concerns, his supervisor commenced a scheme to terminate his employment. At the end of the PIP, the claimant was rated poorly which was done with malice resulting in unfair termination of employment.
The claimant testified that he declined to sign the PIP as he had noted the same was being used against him. He felt he was being pushed to resign. He was issued a notice to show cause to which he replied and attended a disciplinary hearing with another employee of his choice.
The claimant testified that he was paid his terminal dues at the end of his employment.
In response, the respondent admitted that the claimant was an employee from 1st August 1997 until 12 July 2023. The employment was terminated on account of poor performance which is justified under Section 44(4) (c) of the Employment Act. The claimant was subjected to a performance appraisal like other employees of the respondent. This exercise was not applied with malice upon the claimant.
On 28 April 2022, the claimant was subjected to a performance appraisal where his performance was below expectation. He was invited to a meeting on 17 August 2022 where he was to come up with an action plan which he did. In the action plan, it was noted that the claimant failed to meet the expected standards because he had no specific goal tied to the specific activity and outcomes required.
In a bid to assist the claimant in coming up with an action plan, through a letter dated 31st August 2022, the respondent outlined specific goals which the claimant was expected to meet. These included;
- Customer satisfaction;
- HR development/learning and growth;
- Innovations/business process;
- Shareholder satisfaction/financial results; and
- Community relations.
The claimant was evaluated on 10 February 2023 when it was noted that he had failed to meet the goals set on 31st August 2022. His scores were below par and unsatisfactory. He was placed on a PIP on 28 March 2023 but his performance remained unsatisfactory. A notice to show the cause was issued on 1st March 2023 and he responded on 4 March 2023. He was invited to a disciplinary hearing leading to termination of employment on 12 July 2023 for poor performance. There was the payment of full terminal dues.
In terminating his employment, the respondent took into account that the claimant had a previous record;
On 6 July 2002, the respondent issued the claimant with a memo on gross insubordination;
On 16 January 2009, the respondent issued the claimant with a memo on gross insubordination;
On 15 October 2016, a warning was issued for gross negligence in the performance of duty;
On 10 December 2018, a warning was issued for failing to attend an appraisal despite being invited in advance;
On 20 February 2008, the claimant made an apology for unbecoming conduct.
As a result, there were valid and reasonable reasons to justify termination of employment. The claims made should be dismissed with costs.
In evidence, the respondent called Angeline Muthoni the casino manager who testified that she supervised the claimant and took the performance appraisal that found him at 46% rated unsatisfactory. A PIP was issued to assist him improve on his performance and a plan was done but still, he failed to improve on his performance.
Ms. Muthoni testified that she gave the claimant customer satisfaction to train employees professionally, assist guests and develop and train others but he failed to improve his performance. Upon appraisal, the claimant was found to be unsatisfactory. The claim that he was harassed to force him out of employment is without evidence.
Ms. Muthoni testified that the practice of the respondent is to pay a bonus annually. In the year 2023, bonus pay was due in December 2023 and the claimant did not serve the full year. The rating of 46% was the last score which was unsatisfactory and hence not entitled to the claims made.
The respondent called Maureen Namiroi the human resources manager who testified that the claimant was issued with a notice to show cause and he filed a response. This is related to poor performance of duty. He was invited to the disciplinary hearing and failed to respond satisfactorily to his poor work performance. A PIP was issued to assist him improve but he failed to improve. Termination of employment followed the due process and the suit should be dismissed with costs.
At the close of the hearing, both parties filed written submissions.
Determination
On the pleading, evidence, and written submissions, the issues that emerge for determination are whether there was an unfair termination of employment; and whether the remedies sought should be issued.
Through notice dated 12 July 2023, the respondent terminated the claimant’s employment because his work performance had deteriorated and he had failed to address customer satisfaction, HR development/learning and growth, innovation and business processes, shareholder satisfaction, and community relations.
The issue of poor work performance is directly addressed under Section 41 of the Employment Act;
(1) Subject to section 42(1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation.
For an employee who is found to be of poor performance, before termination of employment, an explanation of such matter should be given by the employer. If such poor performance is to be addressed as a matter leading to termination of employment, notice must be issued to the employee to attend and make his representations before another employee of his choice.
What then is poor performance?
The Court of Appeal in addressing the question of what constitutes poor performance in the case of National Bank of Kenya v Samuel Nguru Mutonya [2019] eKLR held that upon the employer making a finding that the employee is of poor performance, efforts in addressing such poor performance must be demonstrated. Part of such measures are the efforts taken in training the employee to return to satisfactory performance. The court relied on the case of Jane Samba Mukala v Ol Tukai Lodge Limited Industrial Cause Number 823 of 2010; (2010) LLR 255 (ICK) (September 2013) the court observed as follows;
a. Where poor performance is shown to be the reason for termination, the employer is placed at a high level of proof as outlined in section 8 of the Employment Act, 2007. The employer must show that in arriving at the decision to note the poor performance of an employee, they had put in place an employment policy or practice on how to measure good performance as against poor performance.
b. It is imperative on the part of the employer to show what measures were in place to enable them to assess the performance of each employee and further, what measures they have taken to address poor performance once the policy or evaluation system has been put in place. It will not suffice to just say that one has been terminated for poor performance as the effort leading to this decision must be established.
c. Beyond having such an evaluation measure, and before termination on the grounds of poor performance, an employee must be called and an explanation on their poor performance shared where they would in essence be allowed to defend themselves or given an opportunity to address their weaknesses.
d. In the event a decision is made to terminate an employee on the reasons for poor performance, the employee must be called again and in the presence of an employee of their choice, the reasons for termination shared with the employee.
In the case of Paul Katuku Muthengi v SMEP Micro Finance Bank Ltd [2021] eKLR the court held that;
It is common cause that the claimant’s employment was terminated on what the respondent termed as poor performance. In situations where an employer is required to give the reason for termination, it is not enough to cite a reason from the catalogue under the foretasted provision and say that an employee was dismissed on one of the accounts contemplated therein. More is required of the employer.
The employer has a duty to demonstrate what was done to address the alleged poor performance. The claimant world for 26 years. He had offered his services this long. What happened from the year 2022 to 12 July 2023? He cannot have suddenly changed to be of poor performance.
Giving the claimant a PIP and a plan of action without the necessary support to recover from what was the underlying issue was imperative. In the case of Peter Kamau Mwaura & another v National Bank of Kenya [2020] eKLR the court held that a mandatory and elaborate process is set up under section 41 of the Employment Act requiring notification and hearing before termination of employment. The employer must demonstrate the measures taken to support a poor-performing employee.
In Jane Wairimu Machira v Mugo Waweru & Associates [2012] eKLR the court held that the proper procedure once the poor performance of an employee is noted is to point out the shortcomings to the employee and allow an employee to improve over a reasonable length of time. In other words, the employer cannot just cite the poor performance of an employee without proof of evaluation and records of poor performance. That allegation of poor performance without records cannot be sustained. That allegation without the measures taken to support the employee to improve on work performance must be produced and demonstrated. Without these measures, the resulting termination of employment is unfair and without justification.
In this case, the respondent submitted an elaborate process of the performance appraisal measures gone into about the claimant. He was given a plan but no iota of support is demonstrated to have been gone into to assist him improve on his work. The continued assessments would then give the same result, unsatisfactory performance. Efforts to build his capacity in his duties were imperative.
Employment terminated unfairly.
In the notice terminating employment, the respondent offered to pay the claimant notice pay for 3 months and accumulated leave days. This is taken into account and the claimant admitted that he was paid his terminal dues.
On the finding that there was an unfair termination of employment, the court is required to take into account the work record under the provisions of Section 45(5) of the Employment Act. The respondent filed a litany of warnings issued to the claimant. This is not contested. In balancing the finding of unfair termination and the claimant’s poor work record, the fact that he had worked for the respondent for 26 years, an award of 6 months is hereby found appropriate. The last salary paid is Ksh.150, 000 total due Ksh.900, 000.
On the claim for pay work for 6 rest days, the claimant has not outlined how such days accrued. In tabulating terminal dues, no rest days’ pay was due. The claimant has not particularized the 6 days claimed.
On the 34 accrued leave days claimed, in paying terminal dues, the respondent factored in 20 days. The employer is the legal custodian of work records. The record of the employer unless demonstrated to be in error by the employee submitting the particulars of the days claimed over and above what the employer’s record is, such a claim is declined.
On the claim for an annual bonus, this is discretionary. The witnesses called by the respondent emphasized the fact that payment of bonus was annual and not prorated.
On the claim for damages for violation of constitutional rights, employment claims are part of the Bill of Rights protected under Article 41 of the Constitution and outlined under the Employment Act under Article 162(3) of the Constitution. Employment rights violated by the respondent are addressed above and redressed.
On the claim for costs, the claim is partially successful and the claimant is awarded 50% of his costs.
Accordingly, judgment is hereby entered for the claimant against the respondent that employment was terminated unlawfully and unfairly, and compensation awarded at ksh.900, 000 and 50% of costs.
Delivered in open court at Mombasa this 23 day of September 2024.
M. MBARŨ
JUDGE
In the presence of:
Court Assistant: Japhet
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