On March 28, 2025, the Kenyan Employment and Labour Relations Court delivered a ruling against neobank Umba, ordering the company to pay KES 2.88 million ($21,600) in damages and legal costs for unfairly dismissing Alice Anyango Oduor, a former executive.

The court found that Umba violated procedural fairness in terminating Oduor’s employment during her probation period in January 2023.

Oduor, hired as Umba’s Head of Growth in November 2022, was terminated after only a few months due to alleged poor performance. However, she contested the dismissal, claiming that there were no clear targets for her role and also that her performance was never evaluated.

According to court documents, Oduor alleged that her termination occurred via a WhatsApp call from the company’s Chief Financial Officer (CFO) without prior written notice or a formal meeting.

Judge Stella Rutto ruled that Umba failed to provide sufficient evidence to conduct a performance evaluation or allow Oduor to respond to allegations before her dismissal.

“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,” the judge ruled.

Compensation and legal obligations for probationary employees

The court awarded Oduor compensation equivalent to three months’ salary during her tenure at Umba. Additionally, Umba was instructed to issue a Certificate of Service within 30 days and cover all legal costs associated with the case.

Under Kenya’s Employment Act, even employees on probation are entitled to fair procedural treatment before termination. This includes being informed of performance concerns and being allowed to respond. The court emphasised that probationary status does not exempt employers from adhering to these legal obligations.

Umba defended its actions by arguing that it had communicated performance expectations to Oduor and held meetings to help her understand her role. However, the court found no documentation supporting these claims or evidence of formal evaluations. This lack of due process rendered the termination unlawful.

The ruling reminds startups operating in Kenya to comply with employment laws and ensure fair treatment of employees, even during probation periods.