Kamuri v Cleanshelf Supermarkets Limited (Cause 922 of 2018) [2025] KEELRC 2278 (KLR)

Factual background 

Stephen Muraya Kamuri, the Claimant, was employed by Cleanshelf Supermarkets Limited from February 2011 until his termination of employment in September 2015, serving as Head of Bakery Section. In August 2015, he was placed on compulsory leave for one month due to alleged unsatisfactory performance. Upon his return, he was verbally informed of the termination, followed by a termination of employment letter dated September 1, 2015, citing poor performance and multiple fraud complaints. 

Kamuri contended that he was never appraised, warned, issued a notice to show cause, or given a chance to be heard before termination. The Respondent claimed the termination of employment was based on investigations revealing gross misconduct, poor performance, and defrauding the company of products. 

Issues 

1. Whether the termination of the Claimant’s employment was lawful and fair
2. Whether the Claimant is entitled to the remedies sought.
3. Whether the Respondent lawfully offset the Claimant’s terminal dues against his Sacco loan and unreturned company property.

1. Whether the termination of the Claimant’s employment was lawful and fair

The main reason for the termination of employment of the Claimant, as stated in the letter of termination presented to the court, was the poor/unsatisfactory performance of his duties as head of the bakery. The letter stated that he, the claimant, had been given numerous verbal warnings by the branch manager on his performance, and when ‘no improvements’ were seen, the Respondent was left with little choice but to terminate his employment contract. The claimant was sent on a one-month leave, and upon return, he received a verbal communication of termination followed by a letter effecting the same.

The trial court, in addressing this issue, discussed the procedure for termination on poor/ unsatisfactory performance. According to the trial court, an employer should do the following before terminating an employee’s employment for poor/unsatisfactory performance:

1. Point out the shortcomings to the employee and give the employee an opportunity to improve over a reasonable length of time. The court suggested 2-3 months. Simply put, an employer must provide adequate opportunity for performance improvement.
2. The employer must demonstrate the existence of an objective performance evaluation system as a benchmark for assessing performance. In simple terms, an employer must provide a basis for deeming the employee’s performance as poor/unsatisfactory.
3. Provide evidence for performance improvement initiatives as well as performance appraisals/assessments. It is not enough that a performance appraisal was conducted; it has to be documented and presented as evidence if such termination culminates in an unfair dismissal suit.

The court found that the respondent had not demonstrated, by way of evidence, that they undertook any of the above procedures, as there was no evidence of a performance improvement plan or performance appraisals. Verbal warnings, according to the court, could not suffice. 

The court found the Respondent’s conduct in addressing the Claimant’s performance issues strange; instead of being supported to improve, the Claimant was sent on a one-month compulsory leave effective 4th August 2015 to 1st September 2015. The suspension letter, which was dated 3rd August 2015, required the Claimant to hand over all company assets entrusted to him. According to the court, an employer who sends a poor-performing employee on compulsory leave has no intention of supporting that employee to improve.

The court further found that the claimant was not subjected to disciplinary procedures under section 41 of the Employment Act. The termination of the Claimant was therefore unlawful and unfair. This is because, in addition to not following termination procedures under section 41 of the Employment Act, the Respondent did not provide a valid reason for terminating the claimant as required by section 43 of the Employment Act.

Section 41 of the Employment Act requires an employer, before terminating the employment contract of an employee, on the grounds of misconduct, poor performance, or physical incapacity, to explain to the employee, in a language the employee understands, the reason for which the employer is considering termination. An employee is allowed to have a representative during such explanations; either another employee or a union representative of his or her choice. 

Section 43, on the other hand, requires an employer to provide valid reasons for termination of employment. Failure to do so, such termination is to be considered unfair.

2. Whether the Respondent lawfully offset the Claimant’s terminal dues against his unpaid Sacco loan.

The Respondent had contended that part of the Claimant’s terminal dues had been used to offset sacco loans owed by the Claimant. The Respondent defended this on the ground of its close association with the sacco.

The court, in addressing this issue, held that in the absence of express authorisation by an employee, an employer cannot withhold the employee’s terminal dues under the guise of recovering an outstanding loan on behalf of a Sacco that is not a party to the proceedings.

3. Whether the Claimant is entitled to the remedies sought.

Having found that the Claimant’s termination was unfair and unlawful, the court answered the above issue in the affirmative. In particular, the court allowed prayers for one month’s salary in lieu of notice, leave pay, and unpaid salary for the month of August when he was on compulsory leave. In total, the Claimant was awarded KShs. 554,750 at court rates from the date of judgment until payment in full.

Conclusion 

Employers have the right to demand satisfactory performance from their workforce. Understandably, no employer would tolerate an underperforming employee, and they have the right to terminate such an underperforming employee. However, to avoid unfair termination claims, an employer who opts to terminate an employee on poor performance grounds must not only undertake the above procedures but also demonstrate that they were duly undertaken.