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ELRCAllowedNot stated in the judgment (consolidated memoranda of claim filed 21.11.2011)· [2013] KEELRC 841 (KLR)

Lens Charles Ndago & 3 others v Chemilil Out-Growers Ltd [2013] KEELRC 841 (KLR)

Industrial Court (Employment and Labour Relations Court)
30 September 2013
HWHellen Wasilwa
1,528 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that 'temporary' workers become permanent after three months and fired workers must get notice and a hearing before dismissal.

What this practically means

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Executive summary

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Four claimants, formerly field clerks of the respondent company engaged at different dates between 2001 and 2006, sued for unlawful termination after dismissal letters dated 8.9.2009 citing poor appraisal results. Their consolidated claims sought underpayment of salary, notice pay, leave allowance, overtime, and gratuity. The respondents admitted the employment and the monthly payment of Ksh 1,000/=, asserting the engagements were temporary and that appraisals justified dismissal, and later admitted in cross-examination that no notice or pay in lieu was given and that the pay fell far below the statutory minimum wage. The court framed two issues: whether the terminations were justified and fair, and what remedies were due. Applying Sections 37(1), 35(1)(c) and 41(1) of the Employment Act 2007, reinforced by ILO Convention 158 Article 7 and ILO Recommendation 166, the court held that the claimants' contracts had converted to monthly contracts, that they were entitled to a month's notice which was never given or paid for, and that they were dismissed for poor performance without any hearing, rendering the terminations unfair and unjustified. The court awarded the difference between the wages paid and the statutory minimum wage for each claimant, one month's notice pay of Ksh 9,442 each, twelve months' salary (Ksh 113,304) as damages for wrongful termination, and service pay of 15 days' salary per year worked, totalling Ksh 766,286, 616,277, 494,260 and 395,059 respectively. Each claimant was to receive a certificate of service, and the respondents were ordered to pay the costs of the suit.

Key legal issues

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01

Whether the dismissals were justified and fair

Holding

The termination was unfair and unjustified: the claimants were deemed monthly employees entitled to a month's notice, received no notice or pay in lieu, and were dismissed for poor performance without any hearing.

Reasoning

The court found that although the appointment letters described the engagement as temporary, the terms infringed the Employment Act 2007. Under Section 37(1), the claimants' contracts converted to monthly contracts after three months, entitling them to notice under Section 35(1)(c), which they never received. Under Section 41(1), dismissal for poor performance required an explanation and a hearing, which was denied. These statutory requirements are reinforced by ILO Convention 158 Article 7 and ILO Recommendation 166. The dismissals therefore failed both procedurally and substantively.

p. 3
02

Remedies for underpayment

Holding

The respondents admitted underpaying the claimants Ksh 1,000/= monthly against the statutory minimum wage, and the court ordered payment of the difference for the periods each claimant worked.

Reasoning

The respondents' own witness admitted the claimants were paid Ksh 1,000/= per month, well below the prevailing minimum wages of between Ksh 7,000 and 10,000, and that salaries were never increased. The court computed the shortfall for each claimant from their date of employment to September 2009, using the gazetted minimum wage figures from 2002 to 2009, and ordered payment of the full difference.

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03

Entitlement to notice pay, damages for wrongful termination and service pay

Holding

The court awarded each claimant one month's notice pay (Ksh 9,442), 12 months' salary as damages for wrongful termination (Ksh 113,304), and service pay of 15 days' salary per year worked as prayed.

Reasoning

Having found the termination unfair, the court exercised its remedial powers: notice pay was awarded because the respondents admitted none was given; 12 months' salary was awarded as compensation for wrongful termination; and service pay of 15 days per year worked was granted as claimed. The court also ordered certificates of service for each claimant, as required on termination of employment.

p. 4

Legal principles established

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  • A temporary or casual employee who works for a period equivalent to not less than one month, or whose work cannot reasonably be completed within three months, is deemed to be employed on monthly terms and is entitled to notice under Section 35(1)(c) of the Employment Act 2007.
  • An employer must, before terminating employment on grounds of misconduct, poor performance or physical incapacity, explain the reasons to the employee and accord the employee a hearing, failing which the termination is unfair (Section 41(1), Employment Act 2007).
  • Payment of wages below the statutory minimum wage violates the Employment Act and entitles the employee to recover the difference.

Court orders

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  1. 1.Declaration that the termination of the claimants' services was unfair and unjustified
  2. 2.Payment of underpayment of salary differences: 1st claimant Ksh 605,772; 2nd Ksh 469,926; 3rd Ksh 352,630; 4th Ksh 258,150
  3. 3.Payment of one month's salary in lieu of notice of Ksh 9,442 for each claimant
  4. 4.Damages of 12 months' salary for wrongful termination of Ksh 113,304 for each claimant
  5. 5.Service pay of 15 days' salary per year worked: 1st claimant Ksh 37,768; 2nd Ksh 23,605; 3rd Ksh 18,884; 4th Ksh 14,163
  6. 6.Total awards: 1st claimant Ksh 766,286; 2nd Ksh 616,277; 3rd Ksh 494,260; 4th Ksh 395,059
  7. 7.Each claimant to be issued with a certificate of service
  8. 8.Respondents to pay costs of the suit

Authorities

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Legislation

  • Employment Act 2007Section 37(1)
  • Employment Act 2007Section 35(1)(c)
  • Employment Act 2007Section 41(1)
  • Employment Act 2007Section 42(1)
  • ILO Convention 158Article 7
  • ILO Termination of Employment Recommendation, 1982 (No 166)Section (a)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes under the Employment Act 2007

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Lens Charles Ndago & 3 others v Chemilil Out-Growers Ltd [2013] KEELRC 841 (KLR)", Case Analysis (2013). Not stated in the judgment (consolidated memoranda of claim filed 21.11.2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/841/eng@2013-09-30

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.