Steven George and 64 Others v Kaisugu Limited & 3 Others [2013] KEELRC 815 (KLR)
The bottom line
#Kenya's Industrial Court ruled that long-serving 'casual' workers become permanent employees, and a drought-related layoff done without proper notice was unfair redundancy.
What this practically means
#Executive summary
#Key legal issues
#Conversion of casual employment to permanent terms
The petitioners' renewed short-term oral contracts over unbroken service exceeding three months converted to permanent terms under section 37 of the Employment Act, 2007
The parties did not dispute that the petitioners were engaged on temporary, renewed short-term contracts and paid monthly. Service was unbroken and spanned more than three months, triggering section 37. The conversion is subject to the statutory minimum terms and conditions of service under the Act.
Nature of the termination
The termination was a redundancy, being loss of employment through no fault of the employees because of lack of work due to a dry season reducing tea production
The reason for termination was lack of work caused by drought and a substantial decline in tea production, which squarely fits the statutory definition of redundancy in section 2 of the Employment Act, 2007, being involuntary loss of employment at the employer's initiative where services are superfluous.
Fairness of the redundancy
The redundancy was unfair: the 1st respondent gave no redundancy notice, used a YES-NO ballot instead of objective selection criteria of seniority, skill, ability and reliability, and paid no dues prescribed by section 40
Section 40(1) sets mandatory conditions: notice to the union and labour officer or the employee personally, objective selection criteria, payment of leave, one month's notice or wages in lieu, and severance at fifteen days' pay per completed year. The 1st respondent breached each of these by using a privately prepared ballot and evicting workers without notice.
Constitutional violations
The 1st respondent violated Articles 27, 28, 29, 40, 41 and 43 through unfair termination and inhuman eviction, but not Articles 41 and 47 by keeping workers on oral contracts
The petitioners were denied equal protection of section 40 of the Act (Article 27); the termination and eviction demeaned their dignity (Article 28) and subjected them to degrading treatment (Article 29); property was lost in the eviction (Article 40); fair labour practices were breached (Article 41); and eviction affected housing, health, food and related socio-economic rights (Article 43). Oral contracts, however, are lawful under section 8 of the Employment Act.
Remedies
Compensation of twelve months' gross salary, one month's pay in lieu of redundancy notice, unpaid days worked, accrued leave and severance at fifteen days per completed year of service
Under Article 23(3)(e) the petitioners are entitled to compensatory relief for breach of rights, with section 49(1)(c) of the Employment Act as the statutory policy guideline, plus payments due upon redundancy under section 40. The court also declared the petitioners entitled to access information under Article 35 for realization of the entitlements.
Legal principles established
#- A casual employee engaged under short-term contracts renewed over an unbroken period exceeding three months converts to permanent terms under section 37 of the Employment Act
- Loss of employment due to lack of work occasioned by a dry season and decline in production fits a redundancy situation and must comply with section 40 of the Employment Act
- Termination on account of redundancy without the prescribed notice, without objective selection criteria and without payment of dues is unfair
Court orders
#- 1.A declaration that the 1st respondent's conduct, acts and omissions are unlawful, illegal and unfair and violated Articles 27, 28, 29, 40, 41 and 43 of the Constitution and section 40 of the Employment Act, 2007
- 2.The 1st to 64th petitioners to be paid twelve months gross salary at the rate of last monthly pay for unfair termination and the violations of fundamental freedoms and rights
- 3.One month pay in lieu of the redundancy notice
- 4.Payment for days worked prior to the termination and not paid
- 5.Pay for annual leave days due but not taken as at termination
- 6.Severance pay at 15 days per completed year of service
- 7.The petitioners to compute the amount in (b) and serve the computation upon the 1st respondent within 14 days of judgment for hearing of any objections
- 8.A declaration that the petitioners are entitled to access to information from the 1st respondent under Article 35 of the Constitution
- 9.The 1st respondent to pay the amount in (b) by 1.12.2013, in default to pay interest at court rates till full payment
- 10.The respondent to pay the petitioners' costs of the suit
- Jurisdiction invoked
- Original jurisdiction to enforce fundamental rights and freedoms under the Constitution (Articles 23, 27, 28, 29, 35, 40, 41, 43, 47) read with the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Steven George and 64 Others v Kaisugu Limited & 3 Others [2013] KEELRC 815 (KLR)", Case Analysis (2013). Petition No 1 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/815/eng@2013-10-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.