A Kenyan Employment and Labour Relations Court has ordered neobank Umba to pay KES 2.88 million ($21,600) in damages and legal costs for unfairly terminating one of its executives, underscoring legal expectations for startups navigating employment laws in the East African country.
The March 28 ruling found that Umba— which operates in Kenya and Nigeria—violated due process when it terminated the employee’s contract in January 2023 during her six-month probation period. The employee, who served as the company’s head of growth, was dismissed after just a few months in the role, allegedly for poor performance and inability to meet targets.
According to court documents seen by TechCabal, the former head of growth claimed that no clear targets were set and that her performance was not formally evaluated. The ex-employee also claimed she was dismissed via a WhatsApp call from the company’s CFO without a formal meeting or written notice.
Umba, through its lawyers, argued that it informed the ex-employee of her performance expectations and held several meetings to help her understand her job, including a December 20, 2022, meeting with the CFO. The company added that her termination resulted from performance issues and informed her of the intended termination.
However, the court determined that Umba failed to provide sufficient documentation to justify the dismissal and did not allow the former employee to respond to the allegations—an omission that rendered the termination unlawful, even though she was on probation.
“The Respondent has not proved that it conducted a performance evaluation against the Claimant’s targets over a specified period of time prior to concluding that her performance was not as per its expectations, hence rendering her unfit for the company,” said Judge Stella Rutto, who presided over the case.
The $21,600 compensation covers the equivalent of the former executive’s three months’ salary during her short stint at the company. The court also ordered Umba to issue a Certificate of Service within 30 days and to cover all legal costs.
Umba did not immediately respond to a request for comments.
Under Kenya’s Employment Act, employees on probation are still entitled to fair procedural treatment before termination, including being informed of performance concerns and being given a chance to respond. The court noted that probationary status does not exempt employers from these legal obligations.
