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ELRCPartially AllowedNot stated in judgment· [2014] KEELRC 860 (KLR)

Kenya Hotels & Allied Workers Union v Alfajiri Villas (Magufa Ltd) [2014] KEELRC 860 (KLR)

Employment and Labour Relations Court
14 March 2014
RSRadido Stephen
2,864 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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A Mombasa court ruled a long-serving carpenter was not a casual worker or contractor, awarded him Kshs 169,600 for unfair dismissal, and penalised the hotel for late filings.

What this practically means

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Executive summary

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The Kenya Hotels & Allied Workers Union claimed on behalf of grievant Thomas K. Nzai, a carpenter allegedly locked out by Alfajiri Villas (Magufa Ltd) on 4 September 2010 after service from 2003. The Union sought two months notice pay, gratuity, accrued leave, September 2010 wages, accrued house allowance, compensation and damages totalling Kshs 4,504,000/- and a certificate of service. The Respondent denied employment, pleading that the Grievant was a subcontractor and later an independent contractor, or alternatively a casual labourer summarily dismissed for breaching casual employment terms, supported by payroll, NSSF and NHIF records and three witnesses. The court framed three issues: the nature of the relationship, whether termination was unfair, and appropriate relief. It held that by operation of the repealed Employment Act and section 37 of the Employment Act, 2007, the Grievant's continuous service converted the engagement into a term contract, and that the tests for an independent contractor (citing Cassidy and Ready Mixed Concrete) were not met since the Respondent paid him wages without invoicing. Section 41 was not complied with, rendering the dismissal procedurally unfair; substantive fairness was not reached. The court awarded two months notice pay (Kshs 24,000/-), accrued leave (Kshs 57,000/-), September wages (Kshs 1,600/-) and six months compensation (Kshs 72,000/-), plus a certificate of service, totalling Kshs 169,600/-. Gratuity, house allowance and 29-year damages were dismissed. Costs of Kshs 15,000/- were awarded to the Claimant as a sanction for the Respondent's late filing of submissions. Judgment delivered at Mombasa on 14 March 2014 by Radido Stephen, Judge.

Key legal issues

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01

Nature of the contractual relationship (casual vs term contract vs independent contractor)

Holding

The Grievant was neither a casual employee nor an independent contractor; his employment was deemed a term contract by operation of section 37 of the Employment Act, 2007

Reasoning

The Respondent alternatively pleaded casual employment, but by operation of the repealed Employment Act and the Employment Act, 2007, service exceeding six months and continuous work converted the engagement to a term contract. The hallmarks of a true independent contractor (own hours, own business, invoicing, no PAYE) were absent; the Respondent paid the Grievant wages directly without any invoicing arrangement, and failed to meet the record-keeping threshold under section 10(7) to prove otherwise.

p. 3
02

Whether the termination was unfair

Holding

The termination was procedurally unfair for non-compliance with section 41 of the Employment Act, 2007

Reasoning

The Director simply instructed the Security Manager to bar the Grievant from the premises without notice or hearing. The Respondent did not demonstrate compliance with the procedural fairness requirements of section 41. Substantive fairness (sections 43, 45 and 47(5)) was not considered because the procedural unfairness finding sufficed.

p. 4
03

Appropriate relief for unfair termination

Holding

Two months notice pay, accrued leave, September 2010 wages, and six months compensation were awarded; gratuity, house allowance and damages refused

Reasoning

Notice pay was founded on regulation 20 of the Regulation of Wages (Hotel and Catering Trades) Order. Accrued leave was awarded because the employer failed to keep records. Compensation was assessed at six months gross wages considering eight years of service and the Grievant's own workshop which eased re-employment. Heads with no contractual or statutory foundation were dismissed.

p. 5

Legal principles established

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  • A casual employee who works continuously for not less than one month, or performs work that cannot be completed within three months, is deemed converted to a term contract
  • An employer has a duty to reduce a contract of service into writing once the six month period has expired
  • Where an employer fails to keep records as required by sections 10 and 74 of the Employment Act, the court may accept the employee's claimed figures

Court orders

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  1. 1.Award of two months pay in lieu of notice of Kshs 24,000/-
  2. 2.Award of accrued/outstanding leave of Kshs 57,000/-
  3. 3.Award of wages for 4 days worked in September 2010 of Kshs 1,600/-
  4. 4.Award of six months compensation for unfair termination of Kshs 72,000/-
  5. 5.Award of costs of Kshs 15,000/- to the Claimant
  6. 6.Total award of Kshs 169,600/- to the Grievant
  7. 7.Respondent to issue the Grievant with a Certificate of Service
  8. 8.Claims for gratuity, accrued house allowance and damages for 29 years dismissed

Authorities

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Legislation

  • Employment Act, Cap. 226 (repealed)sections 2, 14
  • Employment Act, 2007sections 2, 9, 10, 10(7), 37, 41, 43, 45, 47(5), 49(4), 51, 74
  • Regulation of Wages (Hotel and Catering Trades) Orderregulation 20
  • Regulation of Wages (General) (Amendment) Order, 2011not specified

Cases cited (2)

  • Cassidy v Min.of Health
    [1951] 2 KB 343
  • Ready Mixed Concrete v Min.of Pensions
    [1968] 2 QB 497
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over trade dispute stated as 'unfair/unlawful lock out of Mr. Thomas K. Nzai' (Grievant)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenya Hotels & Allied Workers Union v Alfajiri Villas (Magufa Ltd) [2014] KEELRC 860 (KLR)", Case Analysis (2014). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/860/eng@2014-03-14

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