Time Abdalla, Hassan Said & 21 others v Mombasa Maize Millers Limited & another [2019] KEELRC 1304 (KLR)
The bottom line
#Kenya's Employment Court ruled a labour outsourcing company, not the miller, was the sole employer and must pay 22 locked-out workers Kshs. 3.4 million for unfair termination.
What this practically means
#Executive summary
#Key legal issues
#Identify of the employer under successive outsourcing agreements
The 2nd Respondent was the sole employer from 1st January 2012 to 16th January 2016; the 1st Respondent is liable only for any pre-2012 periods of individual employment.
Two outsourcing contracts (2012 and 2013-2015) required the 2nd Respondent to be responsible for 'all the legal requirements' of the employees, i.e. it assumed employment responsibility. Though the last contract expired on 31st December 2015, the 2nd Respondent alone executed the 28th January 2016 return-to-work agreement at the Labour Office, excluding the 1st Respondent, showing it still managed the labour force and the contract had been extended by mutual agreement.
Whether termination was unfair
Termination was unfair: there was no notice, no valid reason, no disciplinary hearing, and the return-to-work agreement was not implemented.
The 2nd Respondent gave no evidence and thus failed to prove any justification for termination. Following the lockout on 16th January 2016, the Labour Office brokered a return-to-work formula signed by the 2nd Respondent and the Claimants, which the 2nd Respondent never implemented and never explained. The Claimants were locked out, not assigned duties, given no notice and never heard at any disciplinary forum.
Entitlement to terminal dues: annual leave, service pay, public holiday pay
Claimants merit annual leave and service pay from the 2nd Respondent for 2012-2016; public holiday pay failed for want of proof.
The 2nd Respondent produced no leave records to displace the assertion that no leave was taken, having treated the Claimants as casuals. The outsourcing agreements placed the burden of deducting and remitting statutory dues on the 2nd Respondent, which produced no evidence of N.S.S.F remittance, so service pay lies under Section 35(5) of the Employment Act. No evidence showed work on public holidays, and no such claims were made at changeover.
Legal principles established
#- Under a labour outsourcing agreement, the contractor which assumes employment responsibility and control of the labour force is the sole employer for the duration of the contract.
- A respondent who does not adduce evidence forfeits the opportunity to prove the reason justifying termination, which will then be found unfair.
- Where the employer keeps no annual leave records, the employee's assertion that leave was never taken stands.
- Employees who work continuously in aggregate over years, in roles central to the employer's business, cease to be casuals and qualify as regular employees entitled to leave and service pay.
Court orders
#- 1.Declaration that termination was unfair.
- 2.The 2nd Respondent to pay each of the 22 named Claimants notice pay, annual leave pay, service pay and compensation for unfair termination for the period 1st January 2012 to 16th January 2016, per the itemised schedule, grand total Kshs. 3,433,200.
- 3.Costs to the Claimants to be paid by the 2nd Respondent.
- 4.The Claim against the 1st Respondent is rejected with no order on the costs.
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act and the employment relationship pleaded in the Statement of Claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Time Abdalla, Hassan Said & 21 others v Mombasa Maize Millers Limited & another [2019] KEELRC 1304 (KLR)", Case Analysis (2019). Cause No. 574 of 2016 (Statement of Claim filed 21st September 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1304/eng@2019-06-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.