Servicehub Global Enterprise v Muendo (Appeal E120 of 2023) [2024] KEELRC 916 (KLR)
The bottom line
#Kenya's Employment Court confirmed that even oral, day-to-day workers gain full legal protection once kept on past a single day, and employers must follow fair process before terminating.
What this practically means
#Executive summary
#Key legal issues
#Existence of employment relationship on an oral contract
An oral contract is permissible; an employee retained beyond the day becomes protected under Section 37 of the Employment Act
Through the Memorandum of Response and the evidence of Gregory Nyongesa, the appellant admitted the respondent was recruited as a cleaner. The Employment Act allows oral contracts, but once the employee is engaged in work not likely to end within the day, Section 37 protection attaches and the employer must issue a written contract. The needs-basis explanation was unsupported by evidence.
Unfair termination
The appellant's failure to issue notice or take any documented measures against the respondent amounted to unfair termination
Even where an employee absconds or commits gross misconduct, Section 44(4) obliges the employer to issue notice to explain and, if necessary, notice of summary dismissal. The appellant made no effort to demonstrate what measures were taken after 15 February 2023, so the inaction resulted in unfair termination. Notice pay and compensation therefore become due.
Quantification of awards
The court recalculated underpayments, leave pay and service pay, and reduced compensation from 12 months to 2 months
Using the Regulation of Wages (General) (Amendment) Order, 2022 minimum wage plus 15% house allowance, the court computed underpayments of Ksh.73,108.50, prorated leave of 33 days at Ksh.16,721.80, and service pay of 15 days' pay for one year at Ksh.8,554. Compensation was reduced to two months (Ksh.34,963.64) given the short service and absence of mitigation.
Legal principles established
#- Where an employer keeps an employee beyond the day, the employee ceases to be casual and becomes protected with rights and benefits under the Employment Act under Section 37
- The fact of payment of a monthly wage confirms that the employee ceased being a casual employee
- Service pay accrues only where the employer fails to deduct and remit statutory dues under Section 35(5) and (6)
- Maximum 12 months' compensation is discretionary and must be justified with reasons, applied rarely in exceptional cases
- Withholding wages for work done frustrates the employment relationship and is forbidden under Sections 17 and 18 of the Employment Act
Court orders
#- 1.Appeal found without merit save that the orders of the learned Magistrate in Mombasa CMELRC No. E130 of 2023 were reviewed as follows
- 2.Compensation Ksh.34,963.64
- 3.Notice pay Ksh.17,481.82
- 4.Underpayments Ksh.73,108.75
- 5.Accrued leave Ksh.16,721.80
- 6.Costs for proceedings in the lower court without interest
- On appeal from
- Magistrates' Court (ELRC), Mombasa
- Mombasa CMELRC No. E130 of 2023
- Jurisdiction invoked
- First appellate jurisdiction under Section 78 of the Civil Procedure Act over an appeal from the magistrates' court (ELRC cause)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Servicehub Global Enterprise v Muendo (Appeal E120 of 2023) [2024] KEELRC 916 (KLR)", Case Analysis (2024). ELCRCA E122 of 2023 (referenced in judgment; suit below Mombasa CMELRC No. E130 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/916/eng@2024-04-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.