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ELRCPartially AllowedCause No 777 of 2016· [2021] KEELRC 405 (KLR)

Joash Oyaro Mosegere v Prime Steel Mills Limited [2021] KEELRC 405 (KLR)

Employment and Labour Relations Court
16 November 2021
3,217 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 for a declaration that his dismissal was unlawful, unfair, null and void, plus notice pay, overtime of Kshs.455,949/-, twelve months' gross salary as damages for unfair dismissal, a certificate of service, interest and costs. He testified he was employed by the Respondent from 17th October 2012 in the refractory section on daily wages, and was terminated on 30th July 2015 without notice or hearing, after which he discovered his salary was being paid through Jokali Handling Services. The Respondent, through its witness, confirmed the employment and the absence of an employment letter, but asserted the Claimant quit on being put on contract, and that it had contracted Jokali to handle casual workers' payment and injuries. The court framed four issues: employment status, unlawful termination, fairness of procedure and entitlement to reliefs. Applying the outsourcing parameters in the Wrigley case, the court held the Claimant's work was integral to the Respondent's operations, the outsourcing was unauthorised, and the Claimant remained the Respondent's employee. The employer failed to produce employment records, so the Claimant's evidence of termination without notice or hearing was unrebutted, breaching the mandatory requirements of section 41 of the Employment Act. The overtime claim failed because the casual payment sheet showed overtime was paid, and a leave claim raised only in submissions was disregarded. Judgment was entered for the Claimant for nine months' gross salary as compensatory damages (Kshs.116,910/-), notice pay of Kshs.12,990/-, interest, a certificate of service, and costs against the Respondent, all subject to statutory deductions.

Key legal issues

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01

Whether the Claimant was an employee of the Respondent despite payment through a third party, Jokali Handling Services

Holding

The Claimant was for all purposes an employee of the Respondent

Reasoning

The Respondent admitted employing the Claimant and issuing no letter of employment. Its witness confirmed the Respondent retained a similar casual employees' list, showing the work was integral to its operations. There was no evidence the Claimant accepted the outsourcing arrangement or left voluntarily. The employer failed to produce employment records, which it was obliged to do, so the court found the employment relationship subsisted with the Respondent.

02

Whether the termination was lawful and fair under section 41 of the Employment Act

Holding

The termination was unlawful and unfair for breach of the mandatory procedural requirements of section 41

Reasoning

The employer produced no employment record and its assertion that the Claimant quit was unsupported. The Claimant's evidence that he was stopped from work without notice or reason, and without a hearing, was unrebutted. Section 41 requires the employer to explain reasons and hear representations before termination; none of this occurred, rendering the dismissal substantively and procedurally unfair.

p. 4
03

Whether the Claimant was entitled to the reliefs sought

Holding

Compensation of 9 months' gross salary, notice pay, certificate of service, interest and costs were awarded; the overtime claim was disallowed

Reasoning

Under section 49(1)(c) and (4) of the Employment Act the court exercised discretion considering the 3-year length of service, lack of reinstatement option and absence of other compensation. Notice pay was due as employment had converted after continuous service. The overtime claim failed on the documentary evidence showing overtime was paid. The leave claim was new in submissions and disregarded.

p. 4

Legal principles established

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  • The employer bears the duty to produce employment records; failure to do so leaves unchallenged the employee's evidence of unfair termination
  • Section 41 of the Employment Act mandatorily requires notice and hearing before termination; breach renders the termination unlawful and unfair
  • Outsourcing parameters: an employer will not be permitted to transfer employees' services to an outsourcing agency without each affected employee's express acceptance, and must settle outstanding obligations first

Court orders

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  1. 1.Compensatory damages for unfair dismissal equivalent of 9 months gross salary at Kshs.12,990/- per month, totalling Kshs.116,910/-
  2. 2.Notice pay of Kshs.12,990/- (one month gross salary)
  3. 3.The award in (a) and (b) is subject to statutory deductions
  4. 4.Interest on the award at court rates from the date of the claim until payment in full
  5. 5.Issuance of a certificate of service under section 51 of the Employment Act
  6. 6.Costs of the suit to be borne by the Respondent

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 49(1)(c) and 49(4)
  • Employment Actsection 51
  • Regulation of Wages (General) Order 2007section 6(1) and (2)

Cases cited (5)

  • Wrigley Company EA Ltd v The Hon Attorney General and others
  • Kenya Ferry Services Ltd versus Dock Workers Union Ltd
    2015 eKLR
  • Kenya Airways Ltd versus Aviation and Allied Workers Union and Others
  • Five Forty Aviation Limited V Erwan Lanoe
    (2019) eKLR
  • Janet Nyandiko v Kenya Commercial Bank Limited
    (2017) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance claim; no specific constitutional provision cited)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Joash Oyaro Mosegere v Prime Steel Mills Limited [2021] KEELRC 405 (KLR)", Case Analysis (2021). Cause No 777 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/405/eng@2021-11-16

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