Why This Employee Won His Case but Still Left Court Owing Millions

The Employment and Labour Relations Court (ELRC) has delivered a rare judgment showing that an employee can win an unfair dismissal case but still be ordered to compensate their employer for losses caused during employment.

In Kenneth Mwangi v Multigraph Machinery (K) Ltd (ELRC Cause No. E1088 of 2023), the court ruled that engineer Kenneth Mwangi was unfairly dismissed because his employer failed to follow the law before terminating his employment.

However, the court also found him liable for more than Ksh 1.45 million after his employer successfully proved a counterclaim for losses linked to his work.

Court Finds Termination Was Unfair

The employer argued that Mwangi performed poorly and made costly mistakes while working on printing machines.

Although the court acknowledged the employer had genuine concerns about his performance, it ruled that poor performance alone is not enough to justify dismissal.

The judge found that the employer failed to comply with the Employment Act, including the requirements under Sections 41, 43, and 45, which require employers to follow a fair disciplinary process before terminating an employee.

According to the court, employers must:

• Set clear and measurable performance targets
• Assess an employee’s performance objectively
• Provide support through a Performance Improvement Plan (PIP)
• Conduct a fair hearing before deciding to terminate employment

Because these steps were not followed, the court declared the dismissal procedurally unfair.

“Poor performance alone is never enough. An employer must first set measurable performance targets, objectively assess the employee, provide support through a Performance Improvement Plan (PIP), and conduct a fair performance hearing before terminating employment.”

The court awarded Mwangi Ksh 241,668 as compensation for unfair termination.

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Employer Wins Ksh 1.45 Million Counterclaim

Despite succeeding in his unfair dismissal claim, Mwangi faced another legal challenge.

Multigraph Machinery (K) Ltd filed a counterclaim seeking Ksh 1,452,112.12, arguing that the engineer’s negligent workmanship caused major financial losses.

The company claimed the losses resulted from:

• Damage to printing machinery
• Incorrect fault diagnosis
• Unnecessary purchase of spare parts
• The cost of flying engineers from India to repair the machines

Although Mwangi denied the allegations in his court documents, he did not present evidence during the hearing to challenge the employer’s claims.

As a result, the court found the employer’s evidence unchallenged and awarded the company the full amount.

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Employee Leaves Court Owing Employer

The judgment means that while Mwangi received Ksh 241,668 for unfair termination, he must also pay his former employer Ksh 1,452,112.12.

The case demonstrates that winning an unfair dismissal claim does not protect an employee from being held responsible for proven losses caused during employment.

“Procedural unfairness and substantive liability are two completely different questions.”

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Why This Employee Won His Case but Still Left Court Owing Millions
PHOTO/ROBA & ASSOCIATES LLP