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ELRCPartially AllowedCause Number 1077 of 2013· [2014] KEELRC 356 (KLR)

Josephat Gichuki Mwangi v Bidco Oil Refineries [2014] KEELRC 356 (KLR)

Industrial Court of Kenya
10 July 2014
JRJames Rika
2,144 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that a worker treated as casual for five years was actually a regular employee and his dismissal without a hearing was unfair.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 2007 as a Panel Beater and Spray Painter, claimed he was summarily dismissed on 3rd/4th April 2012 by his Supervisor Kripal Singh for allegedly refusing to clean up the workplace, and sought notice pay, annual leave pay, service gratuity, 12 months' compensation, declaration, costs and interest totalling Kshs. 318,354. The Respondent denied dismissal, asserting he was a casual General Casual Worker who absconded of his own volition. The Respondent's own witness confirmed via the payroll that the Claimant started work on 1st January 2007 and was a skilled employee paid as such. The Court held that after 5 continuous years the Claimant had transitioned to regular employment under Section 37 of the Employment Act 2007, applying Opwaka v Ready Consultancy Limited. The Respondent failed to show a valid reason for termination under Sections 43 and 45, and Section 41 procedural fairness was entirely absent - the Supervisor simply asked the Claimant to leave and brought in a replacement, a practice the Court condemned as relegated to the mists of antiquity. Adopting a gross monthly salary of Kshs. 11,400, the Court awarded one month's notice pay (Kshs. 8,880), 6 months' compensation (Kshs. 68,400), 5 years' annual leave pay (Kshs. 59,850) and service pay at 18 days per year for the 4 pre-NSSF years (Kshs. 41,040), totalling Kshs. 178,170 payable within 30 days. No order was made on costs and interest.

Key legal issues

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01

Status of the employment relationship

Holding

After 5 continuous years, the Claimant was a regular employee entitled to full benefits under the Employment Act, notwithstanding the casual label

Reasoning

The payroll confirmed employment from 1st January 2007. Under Section 37 of the Employment Act 2007, as applied in Opwaka v Ready Consultancy Limited, wages are deemed paid monthly after prolonged continuous service. The Claimant was therefore entitled to regular employment benefits including notice, leave and service pay.

p. 3
02

Validity and fairness of termination

Holding

Termination was unfair - no valid reason was shown and procedural fairness was absent

Reasoning

The Respondent failed to discount the Claimant's evidence of dismissal by Supervisor Kripal Singh and offered no explanation of the cleaning-up incident. It did not discharge its burden under Sections 43 and 45. Even assuming disobedience, the Supervisor was obliged to lay charges and hear the Claimant under Section 41; instead he simply replaced him.

p. 3
03

Service pay rate

Holding

The 15-day minimum under Section 40 on redundancy is not a ceiling; a pleaded rate of 18 days per completed year is reasonable and may be awarded as service pay under Section 35

Reasoning

Because Section 35 fixes no rate for service pay, the practice is to adopt 15 days under Section 40, but that is a minimum. Wage levels and cost of living have shifted since 2008, so the Court may approve rates above the floor. The Claimant's pleaded 18 days per year was considered reasonable and approved.

p. 4

Legal principles established

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  • An employee who has worked continuously for a prolonged period transitions from casual/irregular to regular employment with full statutory benefits under Section 37 of the Employment Act
  • The employer bears the burden under Sections 43 and 45 of the Employment Act to justify termination
  • Summary dismissal without laying charges and hearing the employee violates procedural fairness under Section 41

Court orders

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  1. 1.Declaration that termination was unfair
  2. 2.The Respondent shall, within 30 days of the delivery of this Award, pay to the Claimant the total sum of Kshs. 178,170 in terminal benefits and compensation
  3. 3.No order on the costs and interest

Authorities

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Legislation

  • Employment Act 2007Section 37
  • Employment Act 2007Sections 43 and 45
  • Employment Act 2007Sections 41 and 45
  • Employment Act 2007Section 49
  • Employment Act 2007Section 35
  • Employment Act 2007Section 40

Cases cited (1)

  • Wilfred Bukachi Opwaka v. Ready Consultancy Limited
    Industrial Court Cause Number 671 of 2012
Jurisdiction invoked
Industrial Court jurisdiction over employment disputes (Issue in Dispute: Unfair and Unlawful Termination)

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, "Josephat Gichuki Mwangi v Bidco Oil Refineries [2014] KEELRC 356 (KLR)", Case Analysis (2014). Cause Number 1077 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/356/eng@2014-07-10

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