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ELRCPartially AllowedNot stated in judgment (ELRC Appeal from Mombasa CMELRC No. E404 of 2021)· [2024] KEELRC 1362 (KLR)

Gold Crown Beverages (K) Limited v Mane (Civil Appeal E077 of 2023) [2024] KEELRC 1362 (KLR)

Employment and Labour Relations Court
6 June 2024
2,942 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A 'casual' worker with monthly NSSF deductions was legally an employee, but his compensation was cut from 12 months' pay to two.

What this practically means

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Executive summary

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The appellant appealed against the judgment of the learned magistrate in Mombasa CMELR Cause No. 404 of 2021, in which the respondent (claimant) was awarded one month's notice pay, unpaid leave pay, 12 months' compensation for unfair termination, costs and interest. The respondent claimed he was employed as a helper in April 2019, earning Kshs.18,360 monthly, and was verbally terminated on 22 May 2021 without notice or reasons. The appellant denied an employment relationship, asserting he was a casual labourer paid daily who left on his own volition. The court, exercising its first-appeal jurisdiction as a retrial per Selle v Associated Motor Boat Co, found the monthly NSSF remittances evidenced an employment relationship, and that continued casual engagement for work not ending within a day attracted Section 37 protections, converting the engagement to a monthly contract. The appellant failed to prove reasons for termination as required under Sections 43 and 45 of the Employment Act, and the termination was unfair. However, the court found the 12 months' compensation excessive given the respondent's service of under two years and full payment of wages and statutory dues, reducing it to two months' compensation (Ksh.36,720). Notice pay of Ksh.18,360 and leave pay of Ksh.25,704 were upheld. On costs, applying Section 12(4) of the ELRC Act, the court held that in employment claims costs do not follow the cause and that the magistrate's award of costs was not justified. The appeal partially succeeded: judgment was reviewed to award the declaration, reduced compensation, notice pay and leave pay, with each party bearing its own costs in the lower court and the appeal.

Key legal issues

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01

Nature of the employment relationship

Holding

The respondent, though engaged as a casual, was an employee protected under Sections 2 and 37 of the Employment Act, as shown by monthly NSSF remittances.

Reasoning

An NSSF statement covering April 2019 to May 2021 showed monthly statutory deductions by the appellant, which occur only within an employment relationship. Although attendance logs showed intermittent days worked, the respondent's evidence that he worked six days a week and earned Kshs.18,360 monthly was not materially challenged. Continued engagement for work not ending within a day triggered Section 37 conversion to a monthly contract.

p. 4
02

Unfair termination

Holding

The termination was unfair; the appellant failed to prove reasons for termination as required by Sections 43 and 45 of the Act.

Reasoning

Having found an employment relationship, the respondent was entitled to notice and reasons. The appellant asserted that the respondent left on account of ill health or absconded, but its own witness admitted the respondent did not abscond. The onus lay on the appellant to prove absence from work, which it failed to discharge with any attendance register or muster roll evidence.

p. 5
03

Quantum of compensation

Holding

The 12 months' compensation awarded by the magistrate was excessive and reduced to two months' compensation (Ksh.36,720).

Reasoning

Compensation is discretionary but must rest on sound judicial principles. The respondent served under two years, was paid his due wages, and the appellant paid statutory dues which were not contested. In those circumstances a full 12 months' award was not justified and two months' pay on the last wage was appropriate.

p. 6
04

Leave pay

Holding

The award of unpaid leave pay of Ksh.25,704 was justified.

Reasoning

Annual leave is a right secured under Section 28 of the Employment Act, and the respondent, enjoying the protections of his employment following Section 37 conversion, was entitled to unpaid leave for the two years of service.

p. 6

Legal principles established

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  • A casual employee whose employment continues for work not likely to end within a day becomes protected under Section 37 of the Employment Act, with conversion to a monthly term contract.
  • The employer bears the burden of proving the reasons for termination under Section 43 of the Employment Act.
  • In employment claims, costs do not automatically follow the cause; the court must justify the award under Section 12(4) of the ELRC Act.

Court orders

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  1. 1.A declaration that the respondent was an employee of the appellant and his employment was terminated unfairly
  2. 2.Compensation of Ksh.36,720
  3. 3.Notice pay of Ksh.18,360
  4. 4.Leave pay of Ksh.25,704
  5. 5.Each party is to bear its costs for the lower court and this appeal

Authorities

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Legislation

  • Employment Act, 2007Section 2
  • Employment Act, 2007Section 37(1)
  • Employment Act, 2007Section 35(1)(c)
  • Employment Act, 2007Section 43(1)
  • Employment Act, 2007Section 45(2)
  • Employment Act, 2007Section 28
  • Employment Act, 2007Section 9
  • Employment and Labour Relations Court Act, 2011Section 12(4)

Cases cited (11)

  • Jumaa Chome Ndio v Kaluworks Limited
    [2020] eKLR
  • Mohamed Bocha Gobu v BGP Kenya Limited
    (2020) eKLR
  • Krystalline Salt Limited v Kwekwe Mwakele & 67 others
    (2017) eKLR
  • Josphat Njuguna v High Rise Self Group
    (2014) eKLR
  • Livingstone Oundo v Polypies Limited (Steel Division)
    2016 eKLR
  • Selle & Another v Associated Motor Boat Co Ltd & Others
    [1968] EA 123
  • Esther Njeri Maina v Kenyatta University
    [2020] eKLR
  • Nanyuki Water and Sewerage Company Limited v Benson Mwiti Ntiritu and 4 others
    [2018], Civil Appeal No. 20 of 2017
  • Empire Feeds Ltd v King'ou
    (Appeal 6 of 2020) [2022] KEELRC 1501 (KLR) (23 June 2022)
  • Daniel Gatana Ndungu & another v Harrison Angore Katana
    [2020] eKLR
  • Price and Another v Hilder
    [1996] KLR 95
On appeal from
ELRC (Magistrates' Court), Mombasa
Mombasa CMELR Cause No. 404 of 2021
Jurisdiction invoked
First appeal to the ELRC against the judgment in Mombasa CMELR Cause No. 404 of 2021

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, "Gold Crown Beverages (K) Limited v Mane (Civil Appeal E077 of 2023) [2024] KEELRC 1362 (KLR)", Case Analysis (2024). Not stated in judgment (ELRC Appeal from Mombasa CMELRC No. E404 of 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1362/eng@2024-06-06

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