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ELRCPartially AllowedCause Number 367 of 2013· [2015] KEELRC 1071 (KLR)

Abdul Majid Mohammed & 60 others v Maersk Kenya Limited [2015] KEELRC 1071 (KLR)

Industrial Court of Kenya at Mombasa
13 May 2015
2,667 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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61 former Maersk tally clerks in Mombasa won most of their terminal benefits after the court ruled they were regular employees, not casuals.

What this practically means

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Executive summary

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Sixty-one former employees of Maersk Kenya Limited, employed as Tally Clerks and related designations for periods of 1 to 8 years, claimed terminal benefits after the Respondent transferred its tallying business to Spica Marine Inspections Limited effective 1st June 2011. They sought one month's notice pay, annual leave pay, public holiday overtime, house rent allowance, costs and interest. The Respondent denied they were its employees, alternatively pleaded they were casuals not entitled to statutory benefits, that wages included the housing element, and that the claims were time-barred under Section 90 of the Employment Act. Rika J found the Claimants were not casual employees but regular employees under Section 37 of the Employment Act. The collective notice pasted on a notice board was inadequate; each Claimant deserved one month's individual written notice or pay in lieu. Annual leave records were not produced, so each Claimant was awarded 21 days' salary per completed year. Public holiday overtime had been paid at 1.5 times the normal rate instead of the prescribed double rate, so the 0.5 difference was awarded. Service pay at 15 days' salary per completed year was awarded because N.S.S.F. contributions were deducted but never remitted, and the token payments were computed on unexplained, shortened years of service. The house allowance claim was declined as the daily wage comprised the housing element. The limitation defence was rejected: accrued benefits must be paid at exit and cannot be subjected to separate accrual dates. The Discharge Vouchers were held unenforceable, as an employer cannot contract out of statutory obligations. The Claim succeeded on all heads except house allowance; tokens paid are deductible, with costs to the Claimants and no order on interest.

Key legal issues

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01

Status of the Claimants as Casual or Regular Employees

Holding

The Claimants were not Casual Employees but Regular Employees entitled to statutory benefits

Reasoning

The Claimants worked in aggregate for 1 to 8 years, which is inconsistent with casual employment under Section 37(1) of the Employment Act. The Respondent ought to have treated them as Regular Employees and extended the full statutory benefits. Section 37(4) empowers the Court to deem them employed on terms consistent with the Act.

p. 5
02

Notice of termination

Holding

The collective notice on the notice board was inadequate; each Claimant was entitled to one month's individual written notice or pay in lieu

Reasoning

The notice dated 24th May 2011 was pasted on a notice board with termination effective a week later. Section 35(1)(c) and 36 of the Employment Act required at least one month individual written notice or payment in lieu, which the Respondent did not give.

p. 6
03

Annual leave pay

Holding

All 61 Claimants had completed at least 12 consecutive months of service and merited annual leave pay of 21 days per completed year

Reasoning

Section 28 of the Employment Act entitles an employee to fully paid annual leave of at least 21 days after every 12 consecutive months of service. The Respondent could not produce any annual leave records, so all Claimants who had completed 12 consecutive months merited leave or pay in lieu.

p. 6
04

Public holiday overtime

Holding

Overtime on Public Holidays must be compensated at 2 times the normal hourly rate; the Respondent shall pay the 0.5 shortfall

Reasoning

The parties agreed overtime was paid but at 1.5 the normal hourly rate. The Regulation of Wages (General Order) prescribes 2 times the normal hourly rate for work on normal rest days and Public Holidays, so the Respondent must pay the difference.

p. 6
05

Service pay and N.S.S.F. deductions

Holding

Service pay at 15 days' salary per completed year was awarded because N.S.S.F. contributions were deducted but not remitted, leaving no social security benefits on termination

Reasoning

There was conclusive proof the Respondent deducted N.S.S.F. contributions but did not remit them. Under Section 37(4) the Court could deem the Claimants employed on terms consistent with the Act. The tokens paid, computed on shortened years of service, fell below statutory standards.

p. 6
06

Validity of Discharge Vouchers

Holding

The Discharge Vouchers were legally unenforceable as they lacked payment details and could not discharge statutory obligations

Reasoning

The Vouchers did not give details of payments made, and an employer cannot be discharged from fulfilling a statutory obligation. The tokens were meant to cloud the rightful terminal benefits and the Vouchers aimed at legitimizing the illegal tokens.

p. 7

Legal principles established

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  • Once a claim arising from termination of employment is filed within the limitation period under Section 90, accrued benefits cannot be subjected to separate dates of accrual
  • An employer cannot contract out of statutory obligations through discharge vouchers

Court orders

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  1. 1.The Respondent shall pay to each Claimant, within 30 days of delivery of the Award, 1 month salary in lieu of notice
  2. 2.The Respondent shall pay to each Claimant 21 days' salary for each completed year of service as annual leave pay
  3. 3.The Respondent shall pay each Claimant 0.5 times the normal hourly rate for overtime work done on Public Holidays
  4. 4.The Respondent shall pay each Claimant service pay at 15 days' salary for each completed year of service
  5. 5.The sums paid to the Claimants as tokens shall be deducted from the total sums payable
  6. 6.Costs to the Claimants
  7. 7.No order on the interest
Jurisdiction invoked
Industrial Court (Procedure) Rules 2010, Rule 27(1)(a); Employment Act 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Abdul Majid Mohammed & 60 others v Maersk Kenya Limited [2015] KEELRC 1071 (KLR)", Case Analysis (2015). Cause Number 367 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1071/eng@2015-05-13

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