Likhutsa v Prime Steel Mills Limited (Cause 2050 of 2017) [2023] KEELRC 1582 (KLR)
The bottom line
#A Kenyan employer without written contracts and proper disciplinary procedures was ordered to pay an employee nearly Ksh 1.2 million for unfair dismissal.
What this practically means
#Executive summary
#Key legal issues
#Existence of an employment relationship despite absence of a written contract
The letter dated 24th July 2014 introducing the Claimant to Diamond Trust Bank, plus the uncontroverted demand letter, established an employment relationship.
The Respondent filed a bare denial and did not specifically controvert the Claimant's evidence, including the letter on the Respondent's letterhead describing the Claimant as its employee. The Respondent never challenged the letter's authenticity before State organs or in its defence. The Respondent also offered no rebuttal of the demand letter's contents tendered in evidence on oath. Absent cogent controverting evidence, the court accepted the letter as proof of employment.
Lawfulness of termination
The termination was unlawful because the Claimant was neither notified of the ground for termination nor subjected to a disciplinary process under section 41 of the Employment Act.
Sections 41, 43, 44 and 45 of the Employment Act require termination with cause and a disciplinary process in which the employee is informed of the grounds and allowed to respond. There was no evidence of notification of grounds or a disciplinary process. The Claimant was merely told there was no more work for him on 22nd August 2016, rendering the termination unlawful.
Burden of proof as to terms of employment where no written contract exists
The employer bears the burden of proving or disproving disputed terms under section 10(7) of the Employment Act; failure to produce records meant the Respondent could not controvert overtime, leave and house allowance claims.
Section 10(7) of the Employment Act places the burden of proving or disproving alleged terms on the employer who fails to produce a written contract. The Respondent produced no documentary proof on working hours, leave or house allowance despite being the custodian of records. The court applied the Court of Appeal decision in Jackson Muiruri Wathigo t/a Murtown Supermarket v Lilian Mutune to hold the claims proved as alleged.
Legal principles established
#- Where an employer fails to produce a written contract or written particulars, the burden of proving or disproving an alleged term of employment lies on the employer.
- An employer may only terminate an employee's contract with cause and after a disciplinary process in which the employee is informed of the grounds and allowed to respond.
Court orders
#- 1.Declaration that there was an employment relation between the parties
- 2.Declaration that the Respondent unfairly terminated the employment relation
- 3.Award of Ksh. 75,300.00 for accrued leave days
- 4.Award of Ksh. 948,780.00 for overtime pay including work on rest days
- 5.Award of Ksh. 135,540.00 for accrued house allowance
- 6.Award of Ksh. 15,060.00 for pay in lieu of notice
- 7.Interest on the amounts awarded at court rates from the date of judgment
- 8.Costs of the case to the Claimant
- 9.Award subject to applicable statutory deductions
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and labour relations claims (Employment Act; ELRC Procedure Rules)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Likhutsa v Prime Steel Mills Limited (Cause 2050 of 2017) [2023] KEELRC 1582 (KLR)", Case Analysis (2023). Cause No 2050 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1582/eng@2023-06-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.