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ELRCDismissedCause No. 161 of 2018· [2019] KEELRC 2571 (KLR)

John Otieno Barasa v Mutsimoto Motors Company Limited [2019] KEELRC 2571 (KLR)

Employment and Labour Relations Court of Kenya at Nakuru
14 March 2019
MMM. Mbaru
1,629 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 confirmed that properly managed fixed term contracts are lawful, and non-unionised employees cannot claim benefits under a CBA they never signed.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a general attendant and later machine operator from 2nd August 2012 to 30th November 2016, sued claiming gratuity of Kshs.43,080.60, underpayments of Kshs.15,069.60, certificates of service, ex gratia payment of Kshs.71,120.30 and costs. He asserted continuous employment of four years under successive fixed term contracts and December periods on daily wage vouchers, membership of the Amalgamated Union of Kenya Metal Workers, and coverage under a CBA. The respondent defended the suit on the basis that the claimant was engaged under intermittent fixed term contracts of eleven months that lapsed by effluxion of time, that notices of end of contract, final dues including gratuity and certificates of service were issued at the end of each term, and that wages were paid in compliance with Minimum Wage Orders and the applicable law. The respondent further contended the claimant was not unionised, was subject only to a 2% agency fee, and could not claim CBA gratuity or ex gratia benefits. The court agreed, holding fixed term contracts are a lawful mode of employment under section 10 of the Employment Act, 2007, following Benson Maiyo v AFC and Fatuma Abdi v Kenya School of Monetary Studies. The court found all claims without merit, dismissed the suit in its entirety and ordered the claimant to meet the respondent's costs.

Key legal issues

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01

Lawfulness of successive fixed term contracts

Holding

Fixed term contracts with start and end dates, notice of expiry, and payment of final dues at each end are lawful; no continuity of employment arises

Reasoning

The court found the parties regulated their employment by written fixed term contracts under section 10 of the Employment Act. Each contract had a start and end date, notice of expiry was issued, final dues paid and certificates of service issued. Relying on precedent, the court held fixed term employment is a legitimate mode of employment and the respondent acted within the law.

p. 3
02

Entitlement to CBA gratuity and ex gratia payments

Holding

A non-unionised employee cannot claim CBA gratuity or ex gratia benefits; only agency fees are due

Reasoning

The claimant, though unionisable, was not a union member and paid agency fees instead of union dues. The court held the CBA clause on gratuity and ex gratia payments did not cover him, and he could not claim benefits under an agreement he was not party to. He had also been paid gratuity at the end of each contract.

p. 4
03

Certificates of service

Holding

Certificates of service for each contract term were duly issued in compliance with section 51 of the Employment Act

Reasoning

Certificates of service dated at the end of each of the five contracts were on record and found to comply with section 51 of the Employment Act, 2007, so the claim for issuance of certificates had no basis.

p. 3

Legal principles established

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  • Fixed term contracts are a legitimate and lawful mode of employment where parties agree to be bound by them, with proper notice and due wages
  • A non-unionised but unionisable employee covered by a CBA is liable only to pay an agency fee and cannot claim benefits under the CBA

Court orders

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  1. 1.The claims made are found without merit and dismissed in the entirety
  2. 2.The claimant shall meet the costs of the respondent

Authorities

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Legislation

  • Employment Act, 2007section 10(3)(c)
  • Employment Act, 2007section 51
  • Labour Relations Actagency fee provisions

Cases cited (2)

  • Benson Maiyo versus AFC
    Cause No.482 of 2016
  • Fatuma Abdi versus Kenya School of Monetary Studies
    [2017] eKLR
Jurisdiction invoked
Article 162(2) of the Constitution establishing the Employment and Labour Relations Court (employment and labour relations dispute under the Employment Act, 2007)

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, "John Otieno Barasa v Mutsimoto Motors Company Limited [2019] KEELRC 2571 (KLR)", Case Analysis (2019). Cause No. 161 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2571/eng@2019-03-14

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