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ELRCPartially AllowedCause No 1636 of 2015· [2018] KEELRC 1492 (KLR)

Mboo Wambua & 29 others v Export Trading Company Limited [2018] KEELRC 1492 (KLR)

Employment and Labour Relations Court
6 July 2018
BOByram Ongaya
3,235 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 confirmed that casual loaders paid per piece are real employees entitled to fair treatment, and locking them out without a hearing was unfair dismissal.

What this practically means

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Executive summary

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Twenty-six loaders sued the respondent claiming that on 15.07.2015 they were locked out of the premises and constructively and unfairly summarily dismissed on an allegation of stealing a horse pipe, without notice or hearing. They sought declarations, notice pay, leave pay, gratuity/service pay, 12 months' compensation and costs. The respondent denied employing them, contending it engaged the 26th claimant, Julius Musee Malinga, on piece rate contracts and that he supplied and paid the loaders, so there was no privity of contract with the claimants. The court found that the respondent employed each claimant; designating the 26th claimant a gang leader did not create a contract for service or vitiate individual contracts of employment, and piece rate pay is a lawful pay structure within a contract of employment. The court distinguished the independent contractor authorities cited and followed its own earlier opinion on piece work. On termination, the surcharge for missing fire hose nozzles, without linking individual claimants to the loss, gave a justifiable grievance under section 46(h); the lock out amounted to unfair constructive termination without the due process of notice and hearing under section 41. Remdies were moderated: each claimant received one month's pay under section 49 plus one month's notice pay (Kshs.36,000.00), the claimants' gate-blocking protest having substantially contributed to the dismissal. Time-based claims for leave, gratuity and service pay failed as inconsistent with the all-inclusive piece work arrangement. Judgment was entered for the claimants with costs, and the parties were directed to serve the judgment on the Attorney General, the Cabinet Secretary for labour, COTU and FKE for legislative intervention on piece work contracts.

Key legal issues

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01

Whether the claimants were employees of the respondent

Holding

The respondent employed each claimant as a loader; the gang-leader arrangement did not create a contract for service, and piece rate pay is compatible with a contract of service

Reasoning

The court found the claimants were subject to the respondent's operational systems and policies and that the 26th claimant, though designated team leader, did not work for himself for profit. The respondent's evidence was contradictory and it was not established that the 26th claimant had contracted to supply loaders. Piece work under section 2 of the Employment Act is a pay structure, not a negation of employment.

p. 3
02

Whether the lock out amounted to unfair constructive termination

Holding

The surcharge for lost nozzles without associating individual claimants to the loss gave a justifiable grievance under section 46(h); the lock out was a constructive termination that was unfair and without notice or hearing under section 41

Reasoning

The claimants were surcharged for missing fire horse reels without any direct or indirect association with the loss. They protested and were locked out. Neither the reason nor due process of notice and hearing was satisfied, so the termination was substantively and procedurally unfair.

p. 4
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What remedies flow in a piece work arrangement

Holding

Each claimant awarded one month's pay under section 49 plus one month in lieu of notice (Kshs.36,000 total at Kshs.600 per day); leave, gratuity and service pay refused as time-based claims inconsistent with piece work

Reasoning

The court held that in piece work the pay is all-inclusive and time served is immaterial, so time-based claims fail. Compensation was reduced because the claimants' protest of blocking the gate substantially contributed to the dismissal. The court also noted a legislative gap regarding piece rate workers and directed service of the judgment on state and labour actors.

p. 4

Legal principles established

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  • Piece work or piece rate arrangements are a valid pay structure within a contract of employment and do not defeat the existence of an employment relationship
  • Under the Employment Act, 2007 it is the responsibility of an employer to justify termination at all times
  • Designation of one loader as a gang leader does not create a contract for service or vitiate the individual contracts of service of the work group

Court orders

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  1. 1.Declaration that the respondent's action to lock out the claimants from its premises amounted to constructive summary dismissal of the claimants' employment, which dismissal was unfair
  2. 2.The respondent to pay each claimant Kshs. 36,000.00 by 01.09.2018, failing which interest to run at Court rates from the date of the judgment till full payment
  3. 3.The parties to serve this judgment, within seven days, upon the Attorney General, the Cabinet Secretary responsible for labour matters, COTU, and FKE, for consideration of appropriate legislative intervention
  4. 4.The respondent to pay the claimants costs of the suit

Authorities

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Legislation

  • Employment Act, 2007section 2 (definition of 'piece work')
  • Employment Act, 2007section 18
  • Employment Act, 2007section 41
  • Employment Act, 2007section 46(h)
  • Employment Act, 2007section 49

Cases cited (5)

  • Safari Joseph Ngala & 2 Others –Versus- Rapid Kate Services Ltd
    [2017]eKLR
  • Joseph Otieno Ogutu & 24 Others –Versus- Allied Wharffage Ltd & Another
    [2016]eKLR
  • Amalgamated Union of Kenya Metal Workers –Versus- Kenya Vehicle Manufacturers Limited
    [2015]eKLR
  • Nyevu Sibya Maithya & 14 others –Versus- Krystalline Salt Limited
    [2017]eKLR
  • Garama Karisa Masha –Versus- Krystalline Salt Limited
    [2016]eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction under the Employment and Labour Relations Court Act and 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 (5)

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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, "Mboo Wambua & 29 others v Export Trading Company Limited [2018] KEELRC 1492 (KLR)", Case Analysis (2018). Cause No 1636 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1492/eng@2018-07-06

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