INTRODUCTION
PIPs are designed to help employees perform their roles better and meet their targets. The process of coming up with a PIP must be fair, transparent, and adhere to the law. In Kenya, the law that governs PIP and employment in general is the Employment Act. The Act is supported by decisions made by courts in matters relating to employment and labour relations. The law requires that PIPs are structured in a way that ensures they follow the right procedure. The case of Jane Samba Mukala v Ol Tukai Lodge Limited [2013] KEELRC 794 KLR is an important case in relation to PIPs and termination. It is mostly relied upon when giving the process of commencing a PIP. The court in this case stated that:
“Where the termination of an employee is based on the reasons of poor performance, the employer must comply with the provisions of section 41 of the Employment Act which require that such an employee should receive an explanation as to such a reason in the presence of another employee of their own choice.
41. (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. [Emphasis mine].
This is important to note as where poor performance is shown to be a reasons for termination, the employer is placed at a high level of proof as outlined under section 8 of the Employment Act to show that in arriving at this decision of noting 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. Section 5 (8) (c) further outline the policy and practice guidelines that include having a performance evaluation system that can be used by an employer in ensuring their employees get a fair chance when they are of poor performance.
Therefore, it is imperative on the part of the employer to show what measures were in place to enable them 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 applied. It will not suffice to just say that one has been terminated for poor performance. The effort leading to this decision must be demonstrated. Otherwise, it would be an easy option for abuse.
Beyond having such an evaluation measure, and before termination on the ground 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 be given an opportunity to address their weaknesses. In the event a decision is made to terminate an employee on the reasons of poor performance, the employee must be called again and in the presence of another employee of their choice, the reasons for termination shared and explained to such an employee.
Where this procedure as set out under section 41 of the Employment Act is not followed, then a termination that arises from it will be procedurally flawed.”
From the above case, the process of commencing a PIP leading to termination is as follows:
- Identify a valid reason to issue out a PIP
The employer must first conduct a performance evaluation to identify performance shortcomings of an employee. These shortcomings should be compared against the employee’s job description, key performance indicators and set targets. In this assessment, there must be evidence of poor performance. The PIP sets in after identification of a below average performance by an employee on set standards. These conditions were set out in the case of Pius v Reckitt Benckiser Services Kenya Limited [2022] KEELRC 13160 (KLR). Additionally, Section 45(2) of the Employment Act stipulates that the employer must prove the reason for termination is valid and is fair in relation to the employee’s conduct, capacity or compatibility. This is to mean that, where an employee’s contract is terminated, the employer must show that the employee’s performance was poor.
- Notify the employee of the performance concerns
The employee must be notified, in writing, of the areas of underperformance and be allowed to respond to the same. This is in line with Section 41 of the Employment Act which provides that before termination of employment on grounds such as poor performance, an employer shall explain to the employee, in a language the employee understands, the reason for which the employer is considering termination. The employee is allowed to have another employee or a shop floor union representative of his choice present during this explanation. The case of Otieno v Fairmont Mount Kenya Safari Club [2025] KEELRC 796 (KLR) states that:
“An employer intending to dismiss an employee on account of poor performance, must accord the employee a fair hearing. Remember that the decision to terminate for the reason of poor performance, the employee may have been preceded by a PIP, but that does not distinguish the employee’s rights to fair hearing under section 41 above.”
- Commence the PIP
This plan should be formally written and specifically designed to fit the intended employee. It should also provide for the time the PIP is expected to run and clearly outline the areas of concern. The court in Pius v Reckitt Benckiser Services Kenya Limited [2022] KEELRC 13160 (KLR) stated that:
“Evaluation reports have to be documentary, the Respondent did not place before the Court any document from which one can discern the set targets and development plans, the evaluation matrix and the evaluation results on each of those targets and development plans, agreed to be achieved during the year in question.”
From this, the PIP should be written down, should state the set targets and the plans for development, the criteria for assessing the targets and the results of each assessment.
- Provision of support and supervision
The employer must actively support the employee to meet the set targets. This support may be in the form of trainings and mentorships. The case of Hot Point Appliances Limited v Ogutu [2025] KEELRC 1650 (KLR) demonstrates how support can be given to an employee during the PIP.
“I have carefully considered the Appellant’s material regarding the termination of the Respondent’s employment due to poor performance and hold that it demonstrates that the Appellant had a procedure for assessing technicians’ performance. By tracking the number of tasks completed, it could identify poor or good performance; the Respondent had specific daily targets, which he failed to meet. As a result of the failure, the Appellant initiated measures to assist him in improving his performance, placing him on a Performance Improvement Plan. However, his performance did not improve, leading to disciplinary action, which I have concluded was procedurally fair.”
In this case, the employer put the employee in a three- month PIP in which the employer reviewed the employee’s daily targets downwards from the initial set targets. The employer allowed the employee to immediately inform the employer of any circumstances that could potentially impede his ability to meet the performance targets.
- Review and evaluation of performance
With the PIP in force, the employer must conduct frequent reviews of the employee’s performance at the agreed timelines. These intervals may range from monthly to quarterly in a year or twice annually. In addition to the scheduled reviews at equal intervals of the PIP period, the employer must evaluate the employee’s performance at the end of the plan. This assessment is to ascertain whether the employee met the set targets. If the targets have consistently or satisfactorily been met, the process ends. However, if no improvement has been recorded, then the employer is at liberty to terminate the employee’s contract on grounds of poor performance. The reasons for the termination must be clearly written down. Section 43 of the Employment Act states that the reasons for termination must be proved, failure to which the termination shall be deemed to be unfair.
- Termination
This can only be done once the employer establishes the employee has failed to meet the targets set under the PIP. The employer gives the employee a termination notice subject to Section 35 of the Employment Act or may terminate the employment contract without notice upon payment to the employee in respect of the period of notice required as per Section 36 of the Employment Act. After the notice period has lapsed, Section 41 of the Employment Act provides that the employee must be given a chance to be heard in the presence of another employee or a shop floor union representative of his choice. The employer must prove the reasons for the termination, which would be poor performance as per Section 43 of the Employment Act. After the termination, Section 51 of the Employment Act provides that the employer must issue a certificate of service to the employee containing the name of the employer and the employee, the date when the employment started, the nature and location of the employment and the date when the employment came to an end.
CONCLUSION
The process of commencing a PIP and potentially terminating employment due to poor performance is governed by clear legal standards. Employers have a duty to first identify the underperformance, support the employee to improve their performance, conduct periodic reviews and give a chance at fair hearing for the affected employee. This must be done before the employment is terminated, otherwise, the termination would be considered unfair. The PIP not only gives an employee a second chance at improving their work output but also protects employers from legal implications after termination.