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ELRCPartially AllowedCause No. 260 of 2017· [2020] KEELRC 832 (KLR)

Amos Otieno Kasimba v Board of Management Bahati Division Academy [2020] KEELRC 832 (KLR)

Employment and Labour Relations Court of Kenya
25 June 2020
2,106 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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The claimant sued the Board of Management of Bahati Division Academy alleging that he was employed from 2009, initially on construction work at ksh.600 per day and from January 2012 as a full-time monthly-paid general worker at ksh.15,000, until 1st February 2017 when the school director terminated his services on account of reduced work and students failing to pay fees, without notice or terminal dues. He sought notice pay, 9 years' leave pay, service pay, refund of ksh.104,375 in salary savings, housing allowances, severance pay and compensation for unfair termination. The respondent denied an employment relationship, asserting the claimant was an independent contractor after 2012 and that no savings account existed. The respondent filed no records and called no witness. The court, applying section 2 of the Employment Act and the Byakika and Alfajiri Villas authorities, held that payment of a wage with statutory deductions, payment statements and granted leave established employment, running from January 2012 to 1st February 2017. The termination was a redundancy under section 40; the lapse in notice was redressed by an award of notice pay of ksh.15,000, leave pay of ksh.60,576.90 for 5 years, and severance pay of ksh.37,500 at 15 days per year for 5 full years. The claim for ksh.104,375 in unpaid savings succeeded as uncontroverted. House allowance claims were refused as amounting to unjust enrichment, and compensation for unfair termination was denied because there was a valid reason for termination. Judgment was entered for the claimant on those heads with costs of the suit.

Key legal issues

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01

Whether the claimant was an employee or an independent contractor

Holding

The court found the claimant was an employee of the respondent, having been paid a wage with statutory deductions, issued payment statements and allowed annual leave

Reasoning

Relying on section 2 of the Employment Act and the cited authorities, the court considered the mode of payment. The claimant earned a monthly wage of ksh.15,000 with PAYE, NSSF and NHIF deductions, received payment statements and was granted leave. These features are inconsistent with independent contracting, which involves invoicing, working one's own hours and absence of statutory deductions.

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02

Duration of employment

Holding

Employment ran from January 2012, when the claimant became a full-time monthly-paid employee, to 1st February 2017

Reasoning

Both the claimant's testimony and the respondent's own statement of response established that the claimant worked on causal terms on the construction site until 2012, when he was retained and paid monthly. The court therefore treated January 2012 as the start of full-time employment, yielding 5 full years of service for the statutory computations.

p. 3
03

Whether the termination was a lawful redundancy and what dues flow from it

Holding

The termination was a redundancy occasioned by reduced work; notice pay, accrued leave pay and severance pay were due, but compensation for unfair termination was not, as there was a valid reason

Reasoning

Reduced work and students' failure to pay fees justified the lay-off under section 40 of the Employment Act. The procedural lapse in issuing notice was cured by an award of one month's notice pay of ksh.15,000. Accrued leave of 21 days per year over 5 years was computed at ksh.60,576.90, and severance at 15 days per year for 5 full years at ksh.37,500. Compensation under section 49 was denied because the reason for termination was valid.

p. 3
04

Claim for refund of salary savings of ksh.104,375

Holding

The claim for ksh.104,375 in unpaid savings was found justified, as the defence lacked any evidence

Reasoning

The claimant gave a detailed account of savings from 2011 to 2015, repayments, loans of ksh.80,000 and school fees paid, leaving a balance of ksh.104,375 after the cheque of ksh.19,500. The respondent asserted the sums were school fees for the claimant's children but filed no records and called no witness, so the defence failed.

p. 3
05

Claims for housing allowance refund and house allowance

Holding

These claims were refused as the claimant was accommodated and his wage exceeded the minimum wage

Reasoning

The claimant was housed by the respondent, with rent of ksh.1,200 deducted, leaving an effective wage of ksh.13,800 which was still above the general worker minimum wage. Since the wage was already over and above the statutory minimum, allowing the house allowance claims would result in the employer's unjust enrichment. The claims were therefore dismissed.

p. 3

Legal principles established

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  • Payment of a wage subject to statutory deductions, issuance of payment statements and grant of annual leave indicate an employment relationship as opposed to an independent contractor relationship
  • Where there is reduced work and the employer is forced to lay off its employees, redundancy is allowed under section 40 of the Employment Act, requiring notice or pay in lieu, payment of accrued leave and severance pay of at least 15 days' pay per year of service
  • Failure by a respondent to call any evidence or file records leaves the claimant's case uncontroverted in any material way

Court orders

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  1. 1.Notice pay awarded at ksh.15,000
  2. 2.Leave pay ksh.60,576.90
  3. 3.Severance pay ksh.37,500
  4. 4.Owed savings of salary ksh.104,375
  5. 5.Costs of the suit to the claimant
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court under Article 162(2) of the Constitution (employment cause filed as Cause No. 260 of 2017)

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, "Amos Otieno Kasimba v Board of Management Bahati Division Academy [2020] KEELRC 832 (KLR)", Case Analysis (2020). Cause No. 260 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/832/eng@2020-06-25

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