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ELRCPartially AllowedCause No 1455 of 2014· [2019] KEELRC 211 (KLR)

Carolyne Ondiri Sheunda & 7 others v Top Rank Industries Limited [2019] KEELRC 211 (KLR)

Employment and Labour Relations Court of Kenya
22 November 2019
MOMaureen Onyango
4,652 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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The Employment Court ruled that letting fixed term contracts expire is not unfair termination, but the employer still had to pay unpaid salary and five years' annual leave.

What this practically means

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Executive summary

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Eight former employees of Top Rank Industries Limited sued for unfair termination and/or unlawful redundancy, alleging employment from dates ranging between 1996 and 2011, and claiming terminal benefits, lost income from 19 July 2014 to judgment, housing allowance, overtime, annual leave, severance pay, notice pay, compensation, certificates of service, interest and costs. The respondent admitted employment but asserted the claimants were on yearly fixed term contracts with consolidated salaries; that six of them received notices dated 18 July 2014 of expiry of their contracts on 31 July 2014; that the remaining two voluntarily left; and that claims predating three years were time barred. The court framed three issues: commencement of employment, unfair termination, and remedies. It found the pleaded commencement months and years admitted and unrebutted, RW1 having conceded some claimants were orally employed before 2012. On termination, it held that all claimants had signed one-year fixed term contracts commencing 1 August 2013, and that expiry of those contracts without renewal was not unfair termination, following the De La Salle Christian Brothers line of authority. On remedies, the court awarded salary for days worked in July 2014, which the respondent failed to prove was paid, and annual leave limited to five years under section 10(6) of the Employment Act because the respondent did not prove leave was taken or paid in lieu, totalling Kshs. 810,656. Housing allowance was refused as salaries were consolidated; overtime failed for want of proof; leave travelling allowance had no legal or contractual basis; severance pay is exclusive to redundancy; no notice pay was due on lapsed fixed term contracts; and section 49 compensation was declined because the claimants were not candid about the conversion of their contracts. Costs were awarded to the claimants with interest at court rates from filing suit.

Key legal issues

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01

Commencement dates of employment

Holding

The claimants were employed in the months and years stated in the memorandum of claim, as confirmed by CW1 and admitted by the respondent's reply and RW1's concession on oral employment before 2012

Reasoning

CW1 confirmed the pleaded dates under oath. The respondent's memorandum of reply admitted the claimants were its employees as pleaded, and RW1 conceded that some claimants were employed under oral contracts before 2012 without specifying dates. NSSF statements corroborated employment from 2004 or 2009 depending on the claimant. The court therefore accepted the pleaded commencement months and years.

p. 6
02

Whether the claimants were unfairly terminated

Holding

No unfair termination; the one-year fixed term contracts commencing 1 August 2013 expired on 31 July 2014 and were not renewed

Reasoning

All claimants signed fixed term contracts of one year commencing 1 August 2013, and six of them received notices dated 18 July 2014 of expiry of their contracts on 31 July 2014. In the face of the fixed term contracts and expiry notices, the court found no evidence of unfair termination, following the De La Salle, Oshwal Academy and Bernard Wanjohi Muriuki line of authority that no reasons need be given for non-renewal of a fixed term contract.

p. 6
03

Salary for July 2014

Holding

All claimants entitled to salary for July 2014 as the respondent failed to prove payment

Reasoning

The respondent did not adduce evidence that the claimants were paid salary in July 2014. The expiry notices directed the claimants to proceed on annual leave, so they remained entitled to pay for the days worked in July 2014 up to the expiry of the contracts.

p. 7
04

Entitlement to the remaining remedies

Holding

Only July 2014 salary and 5-year limited annual leave awarded; housing allowance, overtime, leave travelling allowance, severance pay, notice pay, compensation and interest at 20% declined

Reasoning

Consolidated salaries defeated the housing allowance claim; overtime failed for want of proof; leave travelling allowance had no legal or contractual basis; severance pay is exclusive to redundancy under section 40; fixed term contracts that lapsed attract no notice pay; and compensation under section 49 was refused because the claimants were not candid about the conversion of their contracts from open-ended to fixed term.

p. 7

Legal principles established

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  • Expiry of a fixed term contract by effluxion of time without renewal is not unfair termination
  • Where an employer fails to prove leave was taken or paid in lieu, the employee is entitled to leave pay, limited to the 5-year record-keeping period under section 10(6) of the Employment Act

Court orders

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  1. 1.The respondent to pay the claimants salary for days worked in July 2014
  2. 2.The respondent to pay the claimants annual leave for the limited period of 5 years as tabulated by the court (total Kshs. 810,656)
  3. 3.The respondent shall pay costs to the claimants
  4. 4.Interest shall accrue at court rates from the date of filing suit

Authorities

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Legislation

  • Employment Actsection 9(2) and (3)
  • Employment Actsection 74(1)
  • Employment Actsection 10(7)
  • Employment Actsection 10(6)
  • Employment Actsection 31
  • Employment Actsection 36
  • Employment Actsection 35(2)
  • Employment Actsections 37, 40, 43
  • Employment Actsections 45, 49
  • Employment Actsection 49(1)(c)
  • Employment Actsection 51
  • Employment Actsection 90
  • Regulation of Wages (General) Order, Legal Notice No. 207 of 1990sections 4, 5, 6, 7, 8 and 9

Cases cited (13)

  • Philemon Oseni Kidavi v Brinks Security Ltd
    [2018] eKLR
  • Clifford Sosi Nyabuto v Board of Governors – Singhsaba Nursery Primary
    [2016] eKLR
  • Maureen Atieno Ouma v Njuca Consolidated Co. Ltd
    [2018] eKLR
  • Registered Trustees De La Salle Christian Brothers t/a St. Mary's Boys Secondary School v Julius D. M. Baini
    [2017] eKLR
  • Oshwal Academy (Nairobi) & another v Indu Vishwanath
    [2015] eKLR
  • Bernard Wanjohi Muriuki v Kirinyaga Water and Sanitation Company Ltd & another
    [2012] eKLR
  • Francis Chire Chachi v Amatsi Water Services Co. Ltd
    [2012] eKLR
  • Ruth Gathoni Ngotho-Kariuki v Presbyterian Church of East Africa and Presbyterian Foundation
    [2012] eKLR
  • George Sambumwo Kimengich v Gallant Security Guards Limited
    [2017] eKLR
  • Michael Kareri Mwangi & 3 others v Apex Steel Limited
    [2018] eKLR
  • Patrick Lumumba Kimuyu v Prime Fuels (K) Limited
    [2018] eKLR
  • Rogoli Ole Manandiegi v General Cargo Services Limited
    [2016] eKLR
  • Dorcas Wangari Kamau v Nitin Pandya & another
    [2019] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, No. 11 of 2007 (fair termination and employment benefits claims)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Carolyne Ondiri Sheunda & 7 others v Top Rank Industries Limited [2019] KEELRC 211 (KLR)", Case Analysis (2019). Cause No 1455 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/211/eng@2019-11-22

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