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ELRCPartially AllowedCause E071 of 2021· [2024] KEELRC 382 (KLR)

Kenya Union of Commercial Food Allied Workers v Morison Engineering Limited (Employment and Labour Relations Cause 1454 of 2017) [2024] KEELRC 382 (KLR)

Employment and Labour Relations Court
23 February 2024
5,086 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court ruled fixed-term contracts that simply expired weren't unfair dismissals, but the employer still had to pay unpaid salary, leave dues, and underpayments.

What this practically means

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Executive summary

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The Claimant union sued the Respondent engineering company on behalf of two grievants, Eunice Wanjiku Kibethi and Godfrey Njeru Ireri, both Service Technicians terminated on 27th August 2016, alleging automatically unfair termination on account of union membership. The Claimant sought reinstatement, salaries from September 2016, accrued leave, and 12 months' compensation, or alternatively itemized dues including notice pay, accrued leave, August 2016 salary, CBA underpayments, service gratuity and maximum compensation. The Respondent maintained the grievants were on fixed-term contracts that lapsed by effluxion of time, that the CBA executed on 21st July 2016 did not apply retrospectively, and that leave dues were computed and cheques raised. The court framed three issues: the nature of employment, whether termination was unfair, and entitlement to reliefs. It held both grievants served under one-year fixed-term contracts expiring 31st August 2016, which terminated automatically by effluxion of time; allegations of retaliatory union-motivated dismissal were bare and incapable of belief, so no unfair termination was established. The CBA was held applicable from 1st January 2016 to separation, as its validity was never assailed and courts do not re-write contracts. Awards were made for CBA underpayments (KShs.16,760 and KShs.80,760), unpaid August 2016 salary (KShs.19,075.10 each) and unutilized leave for 2015-2016 (KShs.33,063.70 each), the latter claim limited by the three-year limitation period in section 90 of the Employment Act. Reinstatement, back salaries, notice pay, maximum compensation and gratuity were rejected. A certificate of service was ordered, with interest and costs to the Claimant.

Key legal issues

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01

Nature of the grievants' contracts of employment

Holding

Each Grievant was serving under a one-year fixed-term contract expiring on 31st August 2016

Reasoning

Both grievants were engaged on written one-year contracts dated 1st September 2014 and extended for a further year by letters dated 1st September 2015, ending 31st August 2016. Regardless of the label applied, the true relationship was one of successive fixed-term contracts with clear commencement and end dates.

p. 6
02

Whether the grievants were terminated unfairly on account of union membership

Holding

No; the contracts terminated by effluxion of time and allegations of retaliatory, union-motivated dismissal were unproven

Reasoning

While Article 33 and 41 of the Constitution, section 4 of the Labour Relations Act and section 46 of the Employment Act prohibit dismissal for union membership, the Claimant adduced only bare allegations. The contracts had clear commencement and end dates and terminated automatically on those dates.

p. 9
03

Applicability of the Collective Bargaining Agreement despite retrospective execution

Holding

The CBA applied from 1st January 2016 to the date of separation; underpayments calculated accordingly

Reasoning

The Respondent never pleaded or counterclaimed for nullification of the CBA on grounds of retrospective effect. Courts do not re-write contracts but enforce the parties' agreed intentions. Both grievants, as service technicians in Grade D, were entitled to the negotiated salary of KShs.19,095.20.

p. 10
04

Salary for August 2016

Holding

Each Grievant awarded KShs.19,075.10 as unpaid salary for August 2016

Reasoning

The Respondent alleged payment by bank transfer but the alleged transfer document was absent from its bundle of documents. In the absence of proof of payment, the court concluded the grievants were not paid for August 2016.

p. 10
05

Accrued but unutilized leave days

Holding

Each Grievant awarded KShs.33,063.70 for leave accrued in 2015 and 2016 only

Reasoning

The Respondent's pleadings and evidence on leave were general and lacked specificity, and its witness did not explain how cheque figures were computed. The employer bears the burden of proving leave was taken or compensated. The 2nd Grievant's claim for 11 years was limited to the three-year limitation period.

p. 11

Legal principles established

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  • Courts look past the label the parties place on an employment relationship to the true nature of that relationship
  • Termination on account of trade union membership or activity constitutes automatically unfair dismissal
  • A CBA given retrospective effect by late execution is not thereby invalid, and courts do not re-write contracts but give effect to the parties' intention
  • Gratuity is payable only where provided for by contract or statute
  • The burden of proving that annual leave was taken or compensated lies on the employer

Court orders

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  1. 1.Judgment entered in favour of the Grievants in respect of earned but unutilized leave days: KShs.33,063.70 for each Grievant
  2. 2.Judgment in respect of salary underpayment: KShs.16,760.00 for the 1st Grievant and KShs.80,760.00 for the 2nd Grievant
  3. 3.Judgment in respect of unpaid salary for August 2016: KShs.19,075.10 for each Grievant
  4. 4.The Respondent to issue the Grievants with a Certificate of Service within 30 days of the Judgment
  5. 5.Interest on the awarded amounts
  6. 6.Costs of the suit to the Claimant

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 33(1)
  • Constitution of Kenya, 2010Article 41
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 48
  • Labour Relations Act, 2007Section 4; Section 5(2); Section 62; Section 69
  • Employment Act, 2007Section 46; Section 28; Section 90
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B

Cases cited (5)

  • Ferguson -vs. John Dawson & Partners (Contractors) Ltd
    (1976) 3 All ER 817
  • Kenya National Private Security Workers Union vs. Wells Fargo Limited
    CBA 165 of 2019
  • Transparency International – Kenya Vs Teresa Carlo Omondi
    (2023) eKLR
  • Registered Trustees of the Presbyterian Church of East Africa & Another Vs Ruth Gathoni Ngotho
    (2017) eKLR
  • Anne Theuri Vs Kadet Limited
    (2013) eKLR
Jurisdiction invoked
Articles 162(2) and 165(5)(b) of the Constitution of Kenya, 2010 (Labour Relations Act, 2007, Section 69 referral certificate)

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, "Kenya Union of Commercial Food Allied Workers v Morison Engineering Limited (Employment and Labour Relations Cause 1454 of 2017) [2024] KEELRC 382 (KLR)", Case Analysis (2024). Cause E071 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/382/eng@2024-02-23

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