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ELRCPartially AllowedNot stated in the judgment· [2024] KEELRC 296 (KLR)

Otondi v Menengai Oil Refineries Limited (Cause 175 of 2018) [2024] KEELRC 296 (KLR)

Employment and Labour Relations Court
15 February 2024
5,048 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, engaged as a mason/mason-helper, sued the respondent alleging unfair and unlawful termination of his employment on 14th June 2017 and claiming terminal dues totalling Kshs.506,374/=, a certificate of service, costs and interest. The respondent maintained he was a casual labourer on daily wages whose engagement simply ended, and that a settlement of Kshs.14,984/= reached at the Nakuru County Labour Office was in full and final settlement. The court framed four issues: the nature of the employment relationship, whether the dismissal was wrongful, unfair and unlawful, entitlement to reliefs, and costs. Applying section 37 of the Employment Act and the Rashid Mazuri Ramadhani and Nanyuki Water & Sewerage authorities, the court found that continuous employment from November 2015 to June 2017 with monthly cumulative pay converted the casual engagement into a month to month contract. On the dismissal, the court held that no evidence of misconduct existed and that the respondent's payment of terminal dues after a labour office complaint betrayed its awareness of the unlawful dismissal. The labour-office settlement was scrutinized and found not to bar the claim, the Kshs.14,984/= being treated only as a set-off given the claimant's vulnerability and the settlement's lack of particularization. The court awarded underpayments of Kshs.111,606/=, notice pay of Kshs.13,646.40, public holidays pay of Kshs.24,280/=, overtime of Kshs.104,889/= and six months' compensation of Kshs.81,876/=, less the sum paid, totalling Kshs.321,313.40. Service pay and general damages were refused; a certificate of service, costs and interest were granted. Judgment was delivered virtually at Nakuru on 15th February 2024 by David Nderitu, Judge.

Key legal issues

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01

Nature of the employment relationship - casual or monthly contract

Holding

The claimant's casual engagement converted to a month to month contract of service after continuous work exceeding one month, per section 37 of the Employment Act

Reasoning

Section 2 defines a casual employee as one paid at the end of each day and engaged for not longer than twenty-four hours. Section 37(1)(a) deems a casual employee who works for a period equivalent to not less than one month to be employed on monthly wages. The claimant worked continuously from November 2015 to June 2017 with wages cumulatively paid monthly. Following Rashid Mazuri Ramadhani and Nanyuki Water & Sewerage, the court found conversion had occurred.

p. 6
02

Whether the dismissal was wrongful, unfair and unlawful

Holding

Yes - the claimant was wrongfully, unfairly and unlawfully terminated

Reasoning

Under sections 45(2) and 47(5) of the Employment Act, the employee bears the burden of proving unfair termination while the employer must justify the grounds. No evidence of misconduct was adduced and no explanation was given for the respondent's payment of terminal dues at the labour office. The respondent's assertion that the claimant simply quit was unsupported. The court found the dismissal lacked valid reason and fair procedure.

p. 7
03

Effect of the labour-office settlement agreement

Holding

The settlement does not waive the claimant's right to sue; the Kshs.14,984/= paid is treated as a set-off against the award

Reasoning

The court held it has a duty to interrogate the settlement's fairness. The amount of Kshs.14,984/= was neither itemized nor particularized and there was no evidence of how it was computed. Given the inequality of bargaining power and the claimant's vulnerable, necessitous position after losing his job, the court could not assume the agreement was fair or that it amounted to a waiver of the right to litigate.

p. 8
04

Entitlement to service pay

Holding

Refused because the claimant was an NSSF member whose contributions were remitted

Reasoning

The respondent proved it remitted NSSF contributions for the claimant, which was undisputed. Following Maximila Bushuru v Anvi Emporium Limited, an employee who is a member of NSSF is not entitled to service pay or gratuity unless it is an agreed term of the contract of service.

p. 9

Legal principles established

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  • Casual employment converts to a monthly contract where the employee works for a period equivalent to not less than one month, under section 37(1)(a) of the Employment Act
  • An employer must justify termination with a valid reason and fair procedure; failure renders dismissal unfair
  • A labour-office settlement that is neither itemized nor shown to be fair will not bar a court claim; the amount paid is treated only as a set-off

Court orders

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  1. 1.A declaration that although initially engaged as a casual worker, the employment of the claimant converted to a month to month contract of service upon expiry of the first month under section 37(1)(a) of the Employment Act
  2. 2.A declaration that the dismissal of the claimant was wrongful, unfair, and unlawful
  3. 3.Award of Kshs.336,297.40 less Kshs.14,984.00 paid at the labour office, balance payable Kshs.321,313.40 (underpayments Kshs.111,606.00; notice pay Kshs.13,646.40; public holidays pay Kshs.24,280.00; overtime pay Kshs.104,889.00; compensation for wrongful dismissal Kshs.81,876.00)
  4. 4.The respondent shall issue and deliver to the claimant a certificate of service within 30 days of the judgment
  5. 5.Claimant awarded costs of the cause and interest on the amount awarded at court rates till payment in full
  6. 6.All other claims denied and dismissed

Authorities

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Legislation

  • Employment Actsection 2 (definition of casual employment)
  • Employment Actsection 37 (conversion of casual employment)
  • Employment Actsection 35(1)(c)
  • Employment Actsections 45(2) and 41
  • Employment Actsection 47(5)
  • Employment Actsections 9 & 10
  • Employment Actsection 73
  • Employment Actsection 49(1)
  • Employment Actsections 51(1) and 51(2)
  • Constitution of Kenya, 2010Article 41(2)
  • Legal Notice No. 117 of 2015minimum wage for ungraded artisan

Cases cited (6)

  • Rashid Mazuri Ramadhani & 10 Others v Doshi & Company (Hardware) Limited & another
    (2018) eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    (2013) eKLR
  • Daniel Kipkirui Keter v Securex Agencies (K) Limited
    (2018) eKLR
  • Peter Kamwi v Standard Group Limited
    (2016) eKLR
  • Nanyuki Water & Sewage Company Limited v Benson Mwiti Ntiritu & 4 Others
    [2018] eKLR
  • Maximila Bushuru v Anvi Emporium Limited
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance memorandum of 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, "Otondi v Menengai Oil Refineries Limited (Cause 175 of 2018) [2024] KEELRC 296 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/296/eng@2024-02-15

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