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ELRCPartially AllowedCause No. 651 of 2014· [2018] KEELRC 1120 (KLR)

Christopher Baraza Wasike v Pemco Agencies Limited (Cause 651 of 2014) (Employment and Labour) [2018] KEELRC 1120 (KLR)

Employment and Labour Relations Court
25 September 2018
1,912 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled a casual labourer who worked over two years became a permanent employee entitled to fair redundancy procedures and compensation.

What this practically means

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Executive summary

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The claimant, a carpenter, sued the respondent seeking damages for unprocedural, illegal and unconstitutional dismissal and refusal to pay terminal dues, alleging employment from October 2011 to 28 May 2013 at a monthly salary of Kshs. 16,800. He claimed his services were terminated when the Ramata Green construction site closed, and that no redundancy procedure was followed. The respondent denied any employment contract, asserting the claimant was a casual labourer hired on need basis and paid every two weeks, whose services were no longer needed when the site closed. The court found an employment relationship existed, exceeding three months, and that the employer had breached its duty under Sections 9(1) and 9(2) of the Employment Act by failing to reduce the contract to writing. Applying Section 37, the court held that the claimant's continuous engagement of over two years converted his casual engagement into permanent employment. The termination, occasioned by closure of the site, amounted to redundancy under Section 2 of the Act, but the employer failed to comply with any of the conditions in Section 40, including notification of the union and labour officer, payment of one month's notice, and severance pay. The dismissal was therefore unfair and unjustified. The court awarded one month's salary in lieu of notice, severance pay at 15 days per year worked, and eight months' salary as damages for unfair redundancy, totalling Kshs. 168,000, plus a certificate of service, costs and interest at court rates from the date of judgment.

Key legal issues

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01

Existence and nature of the employment relationship

Holding

Although there was no written contract and the respondent alleged the claimant was a casual labourer, the employment relationship exceeding three months required a written contract under Section 9(1) of the Employment Act

Reasoning

The respondent admitted employing the claimant from October 2011 and paying him every two weeks until May 2013, an engagement exceeding two years. Section 9(1) requires contracts of service of three months or more to be in writing, and Section 9(2) places the duty to reduce the contract to writing on the employer. The continuous engagement of over two years brought the claimant within the statutory protections.

p. 2
02

Conversion of casual employment to permanent employment

Holding

By operation of Section 37 of the Employment Act, the claimant's continuous casual engagement of over two years converted him into a permanent employee

Reasoning

Section 37(1) deems a casual employee who works continuously for the equivalent of not less than one month to be employed on monthly wages. Section 37(3) entitles an employee whose contract is so converted, and who works continuously for two months or more, to the terms and conditions he would have enjoyed under the Act. The claimant therefore became a permanent worker despite the respondent's contrary assumption.

p. 2
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Whether the termination was a lawful redundancy

Holding

The termination was a redundancy, but the employer failed to comply with Section 40 of the Employment Act, rendering the dismissal unfair and unjustified

Reasoning

Closure of the Ramata Green site meant the claimant's services were superfluous, falling within the statutory definition of redundancy. Section 40 mandates notice to the union and labour officer at least one month before termination, payment of one month's notice or wages in lieu, and severance pay at not less than fifteen days' pay per completed year of service. None of these steps was taken, so the dismissal was unfair.

p. 3

Legal principles established

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  • A casual employee who works for a period equivalent to not less than one month, or whose work cannot reasonably be completed within three months, is deemed under Section 37 of the Employment Act to be employed on monthly terms and entitled to the Act's protections
  • An employee on permanent terms cannot be terminated for whatever reason without following due process, and termination on account of closure of a site constitutes redundancy requiring compliance with Section 40 of the Employment Act

Court orders

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  1. 1.1 month salary in lieu of notice of Kshs. 16,800
  2. 2.Severance pay at the rate of 15 days pay for each year worked, computed as 16,800 x ½ x 2 = Kshs. 16,000
  3. 3.8 months salary as damages for unfair redundancy, computed as 16,800 x 8 = Kshs. 134,400, total award of Kshs. 168,000
  4. 4.Issuance of a certificate of service to the claimant
  5. 5.The respondent to pay costs of the suit plus interest at court rates with effect from the date of the judgment

Authorities

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Legislation

  • Employment Act 2007Section 2 (definition of redundancy)
  • Employment Act 2007Section 9(1) and 9(2)
  • Employment Act 2007Section 35(1)(c)
  • Employment Act 2007Section 37
  • Employment Act 2007Section 40

Cases cited (1)

  • Mary Mutanu Mwendwa Vs Ayudi Ninos De Africa-Kenya
    (2013) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes under the 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 (3)

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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, "Christopher Baraza Wasike v Pemco Agencies Limited (Cause 651 of 2014)  (Employment and Labour) [2018] KEELRC 1120 (KLR)", Case Analysis (2018). Cause No. 651 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1120/eng@2018-09-25

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