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ELRCPartially AllowedConsolidated claims filed 4th February 2016 and 18th February 2016· [2020] KEELRC 437 (KLR)

Daniel Opar & 37 others v Toyo Construction Company Limited & another [2020] KEELRC 437 (KLR)

Employment and Labour Relations Court
1 October 2020
LNLinnet Ndolo
1,443 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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This first-instance judgment of the Employment and Labour Relations Court at Mombasa, delivered by Linnet Ndolo J on 1 October 2020, determines two consolidated claims by Stephen Odhiambo Ndolo and fellow claimants against Giefcon Limited (1st Respondent) and its manpower agent (2nd Respondent). The Claimants, skilled and unskilled labourers employed on unwritten contracts from August 2012 for construction of a berth at the Port of Mombasa, claimed compensation for unlawful and unfair termination, notice pay, unlawful NSSF deductions, house allowance, underpayment, service pay and certificates of service, alleging breach of a return to work formula agreed after a June 2015 strike. The 2nd Respondent asserted the engagement was project-based and for a fixed term, ending on project completion with due notice. The court framed two issues: unlawful termination and entitlement to remedies. It held, following Benson Omuyonga v Laxmanbhai Construction and Daniel Mungai v Kabuito Contractors, that construction employment is tied to project duration; the unfair termination claim failed. However, absent written contracts, the employer owed one month's notice under Section 35 of the Employment Act, entitling Claimants with shorter notices to pay for the shortfall. House allowance and underpayment claims failed for lack of evidence. The court ordered payment of notice shortfalls, conclusive proof of NSSF remittance and certificates of service within thirty days, with each party bearing their own costs.

Key legal issues

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01

Whether termination upon completion of a specific project amounts to unlawful termination

Holding

No - the Claimants were engaged in specific project work and their employment period was tied to the project; failing proof of being chased away, the claim fails

Reasoning

It was common cause that the Claimants were engaged for specific project work at the Port of Mombasa and the tasks ended on different dates. The court adopted Rika J's statement in Benson Omuyonga (adopted by Nduma J in Daniel Mungai) that project-based employment ends with the project. Without proof of being chased away, the unfair termination claim was unsustainable.

p. 3
02

Entitlement to notice pay where no written contract existed

Holding

Claimants issued with notices of less than one month are entitled to pay for the notice period shortfall

Reasoning

Having no written contracts, the Claimants could not know when employment would terminate, placing the employer under a duty to give not less than one month's notice under Section 35 of the Employment Act. Some Claimants received shorter notices and are entitled to pay for the shortfall.

p. 3
03

NSSF deductions and remittances

Holding

The 2nd Respondent must present conclusive documentary proof of remittance of all NSSF dues

Reasoning

The 2nd Respondent asserted it had made good all unremitted NSSF dues but no conclusive documentary evidence was availed. The court directed it to present conclusive documentary proof of remittance within thirty days.

p. 3

Legal principles established

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  • In the construction industry, employees are contracted to work for the duration of a project, and employment lapses on project completion
  • Where no written contract fixes the termination date, the employer must issue termination notices of not less than one month under Section 35 of the Employment Act

Court orders

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  1. 1.The 2nd Respondent shall, within thirty (30) days from the date of judgment, tabulate and pay in lieu of notice period shortfall to all Claimants whose notice period fell below the one-month threshold
  2. 2.The 2nd Respondent shall, within thirty (30) days from the date of judgment, present to the Claimants' Advocate conclusive documentary proof of remittance of all NSSF dues on account of the Claimants
  3. 3.The 2nd Respondent shall, within thirty (30) days from the date of judgment, issue the Claimants with certificates of service
  4. 4.Matter to be mentioned on 23rd November 2020 to confirm compliance
  5. 5.Each party to bear their own costs

Authorities

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Legislation

  • Employment Act, 2007Section 35
  • Employment Act, 2007Section 51

Cases cited (2)

  • Benson Omuyonga v Laxmanbhai Construction Limited
    [2014] eKLR
  • Daniel Mungai v Kabuito Contractors
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)

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, "Daniel Opar & 37 others v Toyo Construction Company Limited & another [2020] KEELRC 437 (KLR)", Case Analysis (2020). Consolidated claims filed 4th February 2016 and 18th February 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/437/eng@2020-10-01

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