Computer Error Termination Earns Employee Multi-Million Shilling Compensation

An Image of a Court Hammer
An Image of a Court Hammer

The Labour Court awarded a former senior manager in a local financial institution compensation for unfair sacking prompted by a system error. This error was in contrast to performance rankings issued by her bosses which were consistently high.

The former employee had worked for the financial institution for 26 years where she began her career as a clerk. She rose through the ranks over the years to a position similar to the institution's deputy director.

The performance rating system of the institution constantly ranked her as a non-performer for two years which led to her ultimate dismissal ending her 26-year career on March 9, 2017.

The labour court ordered the financial institution to compensate the lady with an amount of Ksh6.5 million for unfair sacking.

Court of Appeal proceedings on June 29, 2021

Justice James Rika noted that it was strange for a top performer to come tumbling down to a position similar to that of a person who was under probation.

“It is illogical that an employee with 26 creditable years of service would suddenly become an underperformer, groping her way around like an employee who was freshly under probation,” he ruled.

“An objective performance management system would first establish that indeed an underperformance has taken place and then seek to determine why a long-serving employee has suddenly turned into an underperformer and lastly seek to rectify the work environment that has probably triggered underperformance,” he added.

The financial institution rates performance metrics in six levels. The highest level is considered outstanding while the lowest is considered as underperformance.

The institution ranks performance in midyear and end year and targets are arrived at between the employee and the line manager.

The former employee told the court that she had been fired at a time when her team had managed 83 percent of her overall target in the 2015/2016 financial year, yet her report read that she was underperforming.

The financial institution in its reply stated that the former employee was responsible for her termination after she was issued with a warning letter and attended a hearing session but she did not complete the appeal process.

Supreme Court of Kenya
Supreme Court of Kenya
Capital Group