Geofrey Shakwira & 17 others v Nanchang Foreign Engineering Company Limited [2015] KEELRC 263 (KLR)
The bottom line
#A Kenyan court converted 18 casual workers into full employees by law and awarded them Kshs.6.3 million for an unfair redundancy.
What this practically means
#Executive summary
#Key legal issues
#Whether the claimants' casual employment converted to employment on minimum terms under section 37 of the Employment Act, 2007
Yes. The claimants, engaged on daily rates, worked continuously for more than one month, satisfying the first limb of section 37(1), so their contracts were deemed monthly-wage contracts subject to the Act's minimum terms.
Section 37(1) provides two limbs for conversion: continuous work amounting to not less than one month, or work not reasonably expected to be completed within three months. The definition of a casual employee under section 2 contemplates payment at the end of each day and engagement of not more than 24 hours at a time. The material on record showed the claimants worked on daily rates beyond one month continuously, so the first limb was met and conversion occurred by operation of law under section 37(1)(a).
Whether the termination of the claimants by way of redundancy was unfair and unlawful
Yes. The respondent failed to comply with the mandatory provisions of section 40: no notice to the labour officer, no preparation of claimants for redundancy, no criteria shown for selection, and unexplained hiring of replacement staff. The termination was unfair and unlawful, entitling claimants to 12 months' salary compensation.
Section 40(1)(c) requires the employer to have regard to seniority in time and to skill, ability and reliability when selecting employees for redundancy, on objective parameters applied together. The respondent prepared no objective score sheet or ranking, did not address the claimants' assertion that others were hired in their place, and could not show that retained staff held different skills. The failure to pay terminal dues and the abrupt nature of the terminations compounded the unfairness; the claimants contributed nothing to the termination.
Whether the claimants are entitled to the other remedies as prayed for
Yes. Having established they worked without rest days, on public holidays and overtime, the claimants were entitled to service/severance pay as computed, untaken annual leave, and one month's pay in lieu of notice.
The respondent did not deny, in the opposing affidavit, that the claimants worked without offs or rest days, on public holidays and overtime. Those facts stood uncontroverted and established the claims. The abruptness of the terminations grounded an award of one month's pay in lieu of termination notice, and redundancy attracts service or severance pay as computed in the memorandum of claim.
Legal principles established
#- A casual employee who works continuously for not less than one month is deemed, by operation of section 37(1)(a) of the Employment Act, 2007, to be employed on monthly wages and subject to the minimum terms of the Act.
- In a redundancy, the employer must demonstrate objective selection criteria under section 40(1)(c) — seniority in time and to skill, ability and reliability — applied to all parameters objectively, failing which compliance cannot be established.
- An employer who fails to comply with section 40 of the Employment Act in a redundancy subjects the employees to unfair termination attracting 12 months' salary compensation where the employees did not contribute to the termination.
Court orders
#- 1.Declaration that the respondent's action to summarily dismiss the claimants from employment was illegal, unlawful, unfair and inhumane
- 2.The respondent to pay the claimants their terminal dues and compensatory damages as pleaded in paragraph 7 of the memorandum of claim totaling Kshs.6,338,757.00 by 01.01.2016, in default interest at court rates from the date of judgment till full payment
- 3.The respondent to pay the claimants' costs of the claim
- Jurisdiction invoked
- Employment and labour relations dispute before the Industrial Court; jurisdiction under section 37(4) of the Employment Act, 2007 invoked
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Geofrey Shakwira & 17 others v Nanchang Foreign Engineering Company Limited [2015] KEELRC 263 (KLR)", Case Analysis (2015). Cause No 78 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/263/eng@2015-11-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.