Farm v Kituyi (Employment and Labour Relations Appeal E007 of 2022) [2024] KEELRC 573 (KLR)
The bottom line
#Kenya's Employment Court cut a wage underpayment award from Kshs 1.7 million to about Kshs 45,000, but confirmed the worker was an employee and that old claims can still be filed.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent was an employee or an independent contractor
The Respondent was an employee within the meaning of section 2 of the Employment Act, since he was paid wages of Kshs 250 per day paid fortnightly
Courts look at the terms of payment. Payments made by way of wages or salaries indicate a contract of service, whereas fees or commission indicate a contract for service. RW 1 admitted the Respondent was paid Kshs 250 per day fortnightly, which is indicative of wages. The Appellant, custodian of employee records, produced no documents to disprove employment.
Whether the trial court erred in holding employment ran from 1999 to 2016
The ground was abandoned as it was not submitted on by the Appellant
Although raised as ground 4 in the Memorandum of Appeal, the issue was not listed among the issues for determination in the Appellant's submissions and was therefore not argued. The court concluded it stood abandoned.
Whether the underpayment award was erroneous
The trial court erred in applying the 2018 Wages Order instead of the orders in force during the material years; the award was recomputed at Kshs 44,964.60
The correct measure is the difference between the statutory minimum wage under the legal notices in force for each year of alleged underpayment and what was actually paid. The Respondent produced no evidence of his earnings or the relevant legal notices. Based on RW1's admission of four years' work at Kshs 250 per day, the court recomputed underpayment for three years at Kshs 44,964.60.
Whether section 90 of the Employment Act limits back pay to three years
Section 90 limits only the filing of claims, not the outcomes of such claims; how far back an employee can claim depends on the nature of the claim and the merits of each case
The court reasoned that section 10(6) requires employers to keep records for five years after termination and section 10(7) shifts the burden of proof to an employer who fails to produce them, which would be pointless if claims were limited to three years. Employees often refrain from suing while still employed for fear of losing their jobs.
Legal principles established
#- Payment by way of wages on a periodic basis is indicative of a contract of service rather than an independent contractor arrangement
- Section 90 of the Employment Act limits only the filing of claims and does not limit back pay or unpaid benefits recoverable to three years
- Where an employer fails to produce records, underpayment may be assessed on the evidence available and the admissions of the employer's witness
Court orders
#- 1.The award of underpayment of Kshs 1,732,841.21 is set aside and substituted with an award of Kshs. 44,964.60
- 2.The rest of the award remains undisturbed
- 3.The award of costs and interest by the trial court is not disturbed
- 4.Each party shall bear its own costs of the appeal
- On appeal from
- Magistrates' Court (SPM Hon R. Odenyo)
- Jurisdiction invoked
- First appeal from the trial magistrate's judgment in an employment dispute under the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Farm v Kituyi (Employment and Labour Relations Appeal E007 of 2022) [2024] KEELRC 573 (KLR)", Case Analysis (2024). Appeal from SPM Hon R. Odenyo's judgment of 3rd March 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/573/eng@2024-03-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.