You can be right that an employee is underperforming and still get the termination entirely wrong. A 2026 Court of Appeal decision shows exactly why.
AMREF had a performance problem. It was not an imaginary one. It was not a disgruntled manager suddenly deciding that an employee was “not a good fit.”
Dr. Kennedy Manyonyi was the Chief of Party on one of the organisation's projects. His performance appraisal had produced a C (Fair) rating. There were documented concerns about areas including leadership, communication, donor relationships, and project delivery. Performance discussions followed. He received a verbal warning. Further concerns were subsequently raised.
Eventually, AMREF terminated his employment for poor performance.
More than twelve years later, on 23 January 2026, the dispute was still before the Court of Appeal. And this is what makes Manyonyi v African Medical and Research Foundation [2026] KECA 101 mandatory reading for business owners:
The Court of Appeal was satisfied that there was a genuine performance problem. AMREF still got the termination wrong.
Not because poor performance cannot justify termination in Kenya. Not because the employee had to be retained indefinitely. And not because the court decided management's concerns were fabricated.
The problem was much more uncomfortable: AMREF had a process for dealing with poor performance. It did not finish following it.
The Valid-Reason Trap
There is a point in many founder-led businesses when the performance discussion changes. For months, the conversation is: "How do we get this person to perform?"
Then frustration accumulates. The conversation becomes: "Do we have enough evidence to let them go?"
Once management believes the answer is yes, something dangerous happens. Everything after that starts to feel administrative. Call HR. Prepare the letter. Calculate final dues. Collect the laptop. Move on.
The assumption underneath all of this is that if the reason for termination is strong enough, weaknesses in the process will not matter.
The Manyonyi case shows why that assumption is dangerous. AMREF's HR policy did not stop at identifying poor performance and giving a verbal warning. Its procedure contemplated further steps, including a written warning setting out the performance problem and what needed to be remedied. The Court of Appeal found that this stage had not been followed.
The company was faced with an unusual result. It could justify its concern about the employee, but it could not fully justify the way it moved from that concern to termination.
That distinction matters because Kenyan employment law asks more than one question:
- Was there a valid and fair reason?
- Was the employment terminated through a fair procedure?
They are not the same test. Sections 43 and 45 of the Employment Act deal with the employer's obligation to establish the reason relied upon and with substantive and procedural fairness. Section 41 specifically applies where an employer is contemplating termination for, among other grounds, poor performance, and requires the employee to be informed of the contemplated reason and heard before the decision is made.
A strong answer to the first question does not erase a weak answer to the second. You can be right about the employee and still be wrong about the termination.
Your HR Policy is Not Decoration
There is another lesson in Manyonyi that is particularly important for growing businesses.
Founders often become more formal as the company grows. Someone drafts an employee handbook. A consultant creates a disciplinary policy. Performance-management procedures are introduced. Warning stages are documented.
The business feels safer because there is now a policy. But a policy only protects the business when management actually follows it. Otherwise, the document the company created to demonstrate good governance becomes part of the evidence showing what management should have done but did not do.
AMREF did not have to be taught what a performance process looked like. It had already written one down. The failure occurred between the rule and the practice.
If your policy says a particular warning follows another warning, does that happen? If your policy gives the employee a particular review or appeal process, is it actually used? If your contract creates procedural commitments, do managers know they exist before deciding to terminate?
If not, the problem is no longer that your HR documentation is weak. It may be that your documentation is stronger than your management discipline.
What Management Conversations Become in Court
Inside a business, everybody knows the story. The manager remembers the missed deadlines. The founder remembers the client complaint. HR remembers the difficult meeting. Someone remembers telling the employee, three months earlier: "This needs to improve."
That can feel overwhelming when everyone involved agrees that the employee was struggling.
Then the dispute leaves the business.
A judge was not in those meetings. The judge did not experience the frustration. The judge does not know that “everyone knew.” The decision is reconstructed entirely from what remains: The employment contract. The HR policy. Performance records. Emails. Warnings. Meeting invitations. Minutes. The employee's response. The termination letter.
Under that audit, familiar management sentences become much less impressive:
- "We had spoken to him several times." — Where is the record?
- "She knew her performance was unacceptable." — How was that communicated?
- "We gave him every opportunity." — What opportunity?
- "Everyone agreed that she had to go." — Who made the decision, and after what process?
- "We followed our normal procedure." — Is that the same procedure written in your policy?
The issue is not paperwork for paperwork's sake. The issue is whether, months or years later, the evidence tells the same story management is telling.
A Decision Made in 2013, Litigated in 2026
There is another cost in Manyonyi that is easy to overlook.
The termination letter was dated 1 July 2013. The Employment and Labour Relations Court delivered the later trial judgment on 2 November 2018. The Court of Appeal delivered its judgment on 23 January 2026.
More than twelve years after the employment relationship ended, the termination decision was still alive in litigation.
That is a financial consequence even before calculating the final award. Someone has to instruct lawyers. Someone has to retrieve documents. Former managers may need to explain decisions they made years earlier. Management time is redirected from running the organisation to reconstructing what happened.
Then there is the actual award. The Court of Appeal ultimately awarded Manyonyi additional compensation equivalent to two months' gross salary, with interest running from 2018. And two months was not the statutory ceiling. Section 49 of the Employment Act allows a court, where appropriate, to award compensation of up to twelve months' gross wages for unjustified termination.
There is a cost to keeping genuine underperformance unmanaged. There can also be a massive cost to removing the underperformer badly. A founder who treats the procedural requirements as an "HR technicality" can end up paying on both sides.
Fair Process Does Not Mean the Employee Wins
There is a danger in telling only cases where employers lose. It can create the impression that Kenyan employment law makes it almost impossible to terminate a poor performer. That is not what the cases show.
Consider Mwaura v Safaricom Limited [2025] KEELRC 2431.
Francis Mwaura was a senior manager whose monthly salary had risen to more than KSh 811,000 by the time his employment ended. Safaricom terminated him for poor performance. He challenged the decision and sought more than KSh 210 million in alleged losses.
This time, the employer's performance-management record became its defence. The court examined agreed performance objectives, the company's performance-management policy, the employee's assessments, two periods of performance improvement, discussions around the targets, additional staff support, a performance hearing, and an internal appeal.
The court concluded that Safaricom had met the criteria for terminating the employee for poor performance and had substantially complied with fair procedure. The termination was held lawful, and the employee's claims were dismissed.
Put the two cases next to each other. In Manyonyi, the employer had a genuine performance concern but failed to complete the procedure required by its own framework, incurring liability. In Mwaura, the employer was able to take the court through the evaluation, the opportunity to improve, the hearing, and the appeal. The termination survived the challenge.
That is the commercial value of process. One employer's records became evidence of a procedural failure. Another employer's records became a defence.
The Four Controls: Before the File Leaves the Business
The compliance conversation should not begin when somebody asks HR: "How quickly can we terminate?" By then, the company may already have created the risk.
Before a poor-performance termination becomes final, someone who was not emotionally involved in managing the employee must review the file and ask four questions:
- Can we substantiate the reason? If the termination letter says poor performance, the evidence should tell a coherent poor-performance story. Not attitude, not personality, and not misconduct quietly added because the performance case looks weak. The reason on paper must match the reason driving the decision.
- Have we complied with the Employment Act? The statutory requirements around reason, hearing, and fairness (Sections 41, 43, and 45) need to be built into the decision before employment ends.
- Have we complied with our own documents? Read the employment contract, the HR manual, and the performance-management policy. Do not assume the people recommending termination remember what those documents promise.
- Does the evidence tell the same story management is telling? If you removed everyone who attended the management meetings, could an outsider reading the file understand why this employee was terminated? If the answer is "You had to be there," the company has a problem.
The lesson from the courts is not "do not terminate." The courts do not require employers to retain an employee indefinitely simply because the issue is performance.
The lesson is more demanding: Do not confuse having a good reason with having a good termination.
Your performance-management system that seemed operational while the employee was working becomes an evidence system when employment ends. Your targets become evidence. Your reviews become evidence. Your policies become evidence. And your shortcuts become evidence, too.
When poor performance reaches termination, being right about the employee is only half the job. You still have to be right about what you do next.
Disclaimer: This article provides general information on Kenyan employment and performance-management issues. It is not legal advice for a specific employment matter.