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ELRCPartially AllowedNot stated in judgment· [2023] KEELRC 1665 (KLR)

Khindi v Auto Continental Limited (Cause 223 of 2016) [2023] KEELRC 1665 (KLR)

Employment and Labour Relations Court
29 June 2023
2,011 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Mombasa court ruled that sacking an employee by text message without a hearing was unfair, awarding him over Ksh.238,000 and costs.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Mombasa (M. Mbarũ, J) delivered judgment on 29 June 2023 in an unfair termination claim. The claimant was engaged by the respondent, a clearing and forwarding company, as a port clerk on 1 September 2012 and worked continuously until 14 June 2015, earning a monthly wage. He alleged he worked seven days a week without rest days, and that his employment was terminated by a text message from the director without notice, hearing or reasons. The respondent, despite being indulged severally by the court over repeated non-attendance, never called evidence; only the claimant testified and filed submissions. The court framed three issues: unfair termination, terminal dues, and continuous employment. Holding that continuous monthly-paid service converted the claimant from casual status to an employee protected under Section 37 of the Employment Act, and that a shop-floor hearing under Section 41(2) is mandatory before summary dismissal, the court found the termination procedurally unfair. Prior warnings were held relevant only to compensation under Section 45(5). The court awarded compensation of five months' gross wage (Ksh.97,151.30), notice pay of Ksh.19,403.26 inclusive of house allowance, underpayments of Ksh.122,252.84, a certificate of service, and costs. The overtime claim of Ksh.639,598.50 failed as a generalized computation ignoring the respondent's time sheets, and no leave award was included in the final orders.

Key legal issues

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01

Whether the claimant's employment was casual or continuous and protected

Holding

Continuous monthly-paid employment from 2012 to 2015 removed the claimant from casual terms and conferred protection under Section 37 of the Employment Act

Reasoning

Employment for the period was not disputed. The claimant was paid monthly rather than daily at the end of each day, evidenced by monthly payment statements and a letter of appointment dated 30 August 2012. Continuous service over the statutory period converts casual engagement into protected employment with attendant rights and benefits under the Act.

p. 3
02

Whether termination by text message without hearing was procedurally fair

Holding

Termination without notice, hearing or reasons was procedurally unfair notwithstanding prior warnings

Reasoning

Section 41(2) of the Employment Act mandates that an employer hear and consider the employee's representations before summary dismissal under Section 44(3) or (4). The Court of Appeal in Oyombe v Eco Bank Limited and Postal Corporation of Kenya v Andrew K. Tanui confirm Section 41 sets minimum fair-procedure standards. No evidence of a hearing was adduced; warnings only inform compensation under Section 45(5).

p. 4
03

Entitlement to notice pay, compensation and underpayments

Holding

Notice pay at Ksh.19,403.26 inclusive of house allowance, compensation at 5 months' gross wage (Ksh.97,151.30) and underpayments of Ksh.122,252.84 awarded

Reasoning

Notice pay is due under Section 49(1)(b) at the last wage inclusive of house allowance. Compensation of 5 months accounted for the two warning letters and length of service. The employer, as custodian of records, failed to prove payment of due wages inclusive of housing allowance, so the claimant's year-by-year minimum wage tabulation of underpayments was accepted.

p. 4
04

Overtime claim

Holding

Rejected for failure to account for the respondent's time sheets showing varied daily hours

Reasoning

The respondent filed time sheets reflecting Sunday work with varying hours. The claimant applied a flat daily overtime rate for 242 and 730 days without reconciling with those records. The generalized claim of 5 hours per day undermined the accuracy of the computation and the claim failed.

p. 4

Legal principles established

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  • An employee paid monthly and working continuously is converted from casual status to an employee protected under Section 37 of the Employment Act
  • A hearing of the employee at the shop floor before summary dismissal is mandatory under Section 41(2) of the Employment Act
  • Prior warnings cannot substitute for the due-process hearing; they are relevant only in assessing compensation under Section 45(5)
  • The employer is the legal custodian of employment records under Section 10(6) and (7) of the Employment Act

Court orders

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  1. 1.Judgment entered for the claimant against the respondent and a declaration that employment was terminated unfairly
  2. 2.Compensation awarded at Ksh. 97,151.30
  3. 3.Notice pay of Ksh.19,403.26
  4. 4.Underpayments at Ksh. 122,252.84
  5. 5.Certificate of service to issue
  6. 6.Costs of the suit awarded to the claimant

Authorities

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Legislation

  • Employment Act, 2007Section 37
  • Employment Act, 2007Section 44(3) and (4)
  • Employment Act, 2007Section 41(2)
  • Employment Act, 2007Section 45(5)
  • Employment Act, 2007Section 49(1)(b)
  • Employment Act, 2007Section 28
  • Employment Act, 2007Section 90
  • Employment Act, 2007Section 10(6) and (7)
  • Employment Act, 2007Section 31
  • Employment Act, 2007Section 51

Cases cited (2)

  • Oyombe v Eco Bank Limited
    (Civil Appeal 185 of 2017) [2022] KECA 540 (KLR) (13 May 2022)
  • Postal Corporation of Kenya vs Andrew K. Tanui
    [2019] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "Khindi v Auto Continental Limited (Cause 223 of 2016) [2023] KEELRC 1665 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1665/eng@2023-06-29

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