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ELRCPartially AllowedCause No. 25 of 2018· [2018] KEELRC 951 (KLR)

David Chepkwony & 27 others v Tirgaga Factory Limited & another [2018] KEELRC 951 (KLR)

Employment and Labour Relations Court of Kenya
9 October 2018
4,032 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 tea factory workers hired as 'casuals' for years became permanent employees, so firing them without hearing was unlawful and compensation is due.

What this practically means

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Executive summary

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Twenty-eight claimants sued Tirgaga Factory Limited and the Kenya Tea Development Agency Limited claiming that their employment, which began between 2013 and 2016, was unlawfully, unprocedurally and unfairly terminated in 2017 without notice, reason or hearing, in breach of sections 35, 40, 41, 43, 44 and 45 of the Employment Act, 2007 and Articles 41 and 47 of the Constitution. They sought declarations, Kshs.13,193,848.2 as tabulated, maximum compensation under section 49(c), certificates of service, and costs. The respondents denied the claim, asserting the claimants were casual or three-month seasonal contract employees engaged according to workload and seasons, that they were paid their terminal dues on 9th November 2017, and that the claim was an abuse of process. The parties agreed to determination by written submissions. The court framed three issues: whether the termination was wrongful, unfair and unlawful; entitlement to relief; and costs. Relying on section 37 of the Employment Act, the CBA provisions, NSSF records and the 27th September 2017 union agreement, the court found the claimants had worked continuously for long periods, ousting any case of casual employment; their terms had converted to permanent ones and the termination was wrongful, unfair and unlawful. The court held that payment of terminal dues under a mutual agreement did not extinguish the claimants' rights. The claim was allowed: a declaration of unfair and unlawful termination was issued, each claimant was awarded one month's salary in lieu of notice plus eight months' compensation, with individual tabulated totals, and the respondent was ordered to bear the costs of the claim.

Key legal issues

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01

Status of the claimants' employment – casual/seasonal or permanent/regular

Holding

The claimants had been in continuous employment for long periods (8 to 19 years), so their casual/seasonal status converted to permanent terms under section 37 of the Employment Act

Reasoning

The court found the nature of the claimants' duties and the long periods of service contradicted the respondent's case of seasonal and casual employment. The CBA clause 22 on seasonal employment limited such engagement to three consecutive months, and the claimants worked far longer, as evidenced by NSSF statements. The mutual agreement of 27 September 2017 with the union also treated them as entitled to terminal dues. Section 37 therefore converted their contracts to monthly terms.

p. 5
02

Whether termination was wrongful, unfair and unlawful

Holding

The termination was wrongful, unfair and unlawful; the claimants adduced substantial evidence controverting the respondent's seasonal-employment theorem

Reasoning

The court agreed the claimants had become permanent employees and their termination without fair reason or fair procedure under sections 41, 43 and 45 of the Employment Act was unlawful. The respondent failed to discharge its burden of proving a valid and fair reason and fair procedure, and its abuse-of-process argument based on payment of terminal dues did not hold.

p. 5
03

Whether the claimants are entitled to the relief sought

Holding

Yes; having established unlawful termination, the claimants became entitled to relief – declaration, notice pay, compensation and costs

Reasoning

The court held that success on the unlawful termination issue entitled the claimants to the relief sought, and awarded a declaration plus one month's salary in lieu of notice and eight months' compensation for each of the 28 claimants, with costs to the respondent.

p. 5

Legal principles established

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  • Casual employment that exceeds one month of continuous working days or work expected to last three months or more is converted by statute into a monthly-paid term contract
  • Payment of terminal dues under a mutual agreement between employer and union does not extinguish an employee's contractual and statutory rights

Court orders

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  1. 1.A declaration that the termination of the employment of the claimants was unfair, unlawful and a fundamental violation of their rights
  2. 2.The respondents to pay each claimant one (1) month's salary in lieu of notice and eight (8) months' compensation for unlawful termination, with individual tabulated totals per claimant
  3. 3.The costs of the claim to be borne by the respondent

Authorities

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Legislation

  • Employment Act, 2007Section 35
  • Employment Act, 2007Section 36
  • Employment Act, 2007Section 37 (1), (3) and (4)
  • Employment Act, 2007Section 40 (1)(a) and (b), (a), (b), (e), (f), (g)
  • Employment Act, 2007Section 41(1) and (2)
  • Employment Act, 2007Section 42(1)
  • Employment Act, 2007Section 43(1)
  • Employment Act, 2007Section 44(3) and (4)
  • Employment Act, 2007Section 45(1), (2), (3), (4) and (5)
  • Employment Act, 2007Section 46
  • Employment Act, 2007Section 49(c)
  • Employment Act, 2007Section 51
  • Constitution of Kenya, 2010Articles 41 and 47

Cases cited (2)

  • Kenya Plantation & Agricultural Workers Union v Finlays (K) Limited
    [2017] eKLR
  • Alphonse Machanga Mwachanya vs Operation 680 Limited
    [2013] eKLR
Jurisdiction invoked
Articles 41 and 47 of the Constitution read with the Employment Act, 2007 (fair labour practices and fair administrative action), as a first-instance employment cause before the Employment and Labour Relations Court

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, "David Chepkwony & 27 others v Tirgaga Factory Limited & another [2018] KEELRC 951 (KLR)", Case Analysis (2018). Cause No. 25 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/951/eng@2018-10-09

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