Kenya Union of Commercial Food and Allied Workers v Marumi Farmers Co-operative Society Limited (Cause E011 of 2023) [2024] KEELRC 851 (KLR)
The bottom line
#A Kenyan court upheld a worker's dismissal for fraud but still ordered his cooperative employer to pay Kshs.339,500 in unpaid leave, gratuity, and wages.
What this practically means
#Executive summary
#Key legal issues
#Whether the grievant's dismissal during probation was substantively and procedurally fair
The dismissal was fair: the respondent proved the reason (false cherry entries/fraud) on a balance of probability and accorded the grievant a hearing before the Management Committee
The respondent produced minutes of the Management Committee meetings of 20th and 27th October 2021. The grievant, when confronted with alleged false entries, blamed them on computer error rather than admitting or denying them. The court found these minutes corroborated RW1 and RW2's testimony and proved the reason for dismissal. Procedurally, the grievant attended a hearing on 27th October 2021 and had an opportunity to defend himself, satisfying sections 41, 43 and 45 of the Employment Act.
Whether the grievant was a casual or permanent employee and whether the CBA applied to him
By dint of four years' continuous service, the grievant converted to a regular employee under section 37 of the Employment Act; the CBA covered all unionisable employees whether or not they were union members
The court found no dispute that the grievant worked continuously from October 2017 on a monthly salary paid through the bank, defeating the casual label. Section 37 deems contracts of casually engaged employees exceeding the statutory thresholds to be monthly contracts with the terms of a regular employee. The CBA preamble covered all unionisable employees, excluding only temporary employees under clause 18, which did not apply to the grievant.
Entitlement to terminal benefits: leave, service gratuity and underpayment
Leave awarded at 21 days per year over four years (Kshs.24,500), gratuity per clause 4 of the CBA (Kshs.168,000) and underpayment computed as house allowance at 15% for three years plus CBA rate for the fourth year (Kshs.147,000)
The grievant was denied leave throughout his continuous four-year service despite working for a monthly salary. Clause 4 of the CBA entitles an employee to three months' current basic salary for each completed year of service as gratuity. For underpayment, the first three years yielded unpaid house allowance at the conventional 15% of basic pay, while in the fourth year the CBA rate for a Cherry Recorder (Group D) of Kshs.14,000 plus 15% house allowance was used against the Kshs.7,000 actually paid.
Legal principles established
#- An employer must prove both a valid reason and fair procedure for termination; failure on either renders termination unfair
- A casual employee engaged continuously for periods aggregating to one month or more is deemed to be employed on monthly terms and entitled to the terms of a regular employee under section 37 of the Employment Act
- A CBA covering 'all unionisable employees' applies to employees regardless of union membership
- Courts conventionally award house allowance at 15% of basic pay
Court orders
#- 1.Judgment entered for the claimant in the sum of Kshs.339,500.00 comprising leave Kshs.24,500.00, gratuity Kshs.168,000.00 and salary underpayment Kshs.147,000.00
- 2.The sum awarded is subject to statutory deductions
- 3.Claimant awarded costs of the suit
- 4.Interest at court rates from the date of filing suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (first-instance trade dispute; specific enabling provision not quoted in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Commercial Food and Allied Workers v Marumi Farmers Co-operative Society Limited (Cause E011 of 2023) [2024] KEELRC 851 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/851/eng@2024-04-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.