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ELRCPartially AllowedAppeal and Cross-Appeal from Malindi CMELRC No. 7 of 2021· [2024] KEELRC 1490 (KLR)

Moriema Cottages Limited v Manjewa (Appeal E016 of 2023) [2024] KEELRC 1490 (KLR)

Employment and Labour Relations Court
23 May 2024
2,681 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled employers must prove leave and rest days with records, but courts cannot award money never claimed by an employee.

What this practically means

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Executive summary

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This first appeal and Cross-Appeal arose from the judgment of the Malindi Chief Magistrate's Court (CMELRC No. 7 of 2021) delivered on 29 August 2023, in which the respondent, employed as manager/accountant from 2006 to 2018, was held to have been converted under Section 37 of the Employment Act into a permanent employee and awarded service pay of Ksh.232,224, with claims for leave and rest days dismissed. The appellant contended the award of unpleaded service pay was erroneous; the respondent's Cross-Appeal sought the full pleaded claims for leave, rest days and severance pay. The court, as a first appellate court, re-examined the entire record. It held that the magistrate erred in placing the burden of proving leave and rest days on the employee, since Sections 10(7), 73 and 74 of the Employment Act place the duty to keep and produce work records on the employer; absent such records, both claims should have been awarded. However, annual leave cannot accumulate beyond 18 months under Section 28(4), so the respondent was awarded 33 days at Ksh.43,285. The claim of Ksh.734,066 for rest days was allowed. On service pay, the court held that severance pay under Section 40 and service pay under Section 35 belong to different regimes and cannot be interchanged; since service pay was not pleaded, parties being bound by their pleadings, the award of Ksh.232,224 was erroneous and set aside. The trial court's costs and interest awards, made without reasons, were also set aside. Each party was ordered to bear its own costs throughout.

Key legal issues

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01

Burden of proof on claims for accrued leave and rest days

Holding

The trial magistrate erred in placing the burden on the employee; the employer must produce work records under Sections 10(7), 73 and 74 of the Employment Act, and without such records the claims should have been awarded

Reasoning

Section 10(7) of the Employment Act places the burden of proving or disproving an alleged term of employment on the employer where no written contract or particulars are produced. The respondent discharged his burden under Section 47(5); the appellant, as employer, was required to justify that leave and rest days were allocated but filed no records. Accordingly, the Cross-Appeal on leave and rest days succeeds.

p. 4
02

Award of unpleaded service pay

Holding

The award of service pay was erroneous; the claim pleaded was severance pay, and since this was not a redundancy, no severance pay was due and service pay could not be substituted

Reasoning

Parties are bound by their pleadings. Severance pay under Section 40 applies on redundancy; service pay under Section 35 applies to employees not covered by statutory deductions. The two cannot be interchanged. Awarding service pay that was never pleaded, where the respondent enjoyed legal representation and could have amended pleadings, negates the purpose of the law and the pleading principle.

p. 5
03

Quantum of accrued annual leave

Holding

Annual leave cannot accumulate beyond 18 months; the respondent is entitled to 33 days for the 18-month cut-off period, assessed at Ksh.43,285 based on the und segregated wage of Ksh.39,350

Reasoning

Section 28(2) obliges the employer to ensure the employee takes annual leave, but Section 28(4) bars accumulation beyond 18 months. This being a continuing injury, absent proof that the employee applied for leave and was declined, the claim is cut off at 18 months, yielding 33 leave days at the last basic wage.

p. 4
04

Costs in employment claims

Holding

Costs in employment claims are discretionary and must be justified on judicially acceptable principles; the trial court's award of costs and interest without reasons was set aside

Reasoning

Under Sections 3 and 12 of the Employment and Labour Relations Court Act, 2011, costs do not automatically follow the cause in employment matters. Where awarded, reasons must be assigned and justification based on judicially acceptable principles. The trial court assigned no reasons for its costs and interest award, so it was set aside.

Legal principles established

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  • In employment relations, the duty to keep work records rests on the employer, and where the employer fails to produce records, the burden of proving or disproving an alleged term of employment falls on the employer
  • A court cannot award relief not pleaded; parties are bound by their pleadings and evidence at variance with pleadings must be disregarded
  • Service pay under Section 35 and severance pay under Section 40 of the Employment Act belong to different regimes of employment and cannot be applied interchangeably
  • Annual leave is a continuing injury but cannot accumulate beyond 18 months unless the employee shows he applied for leave and was declined
  • Rest days are due at the end of employment where the employer produces no records showing the right was secured

Court orders

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  1. 1.The judgment in Malindi CMELRC No. 7 of 2021 is reviewed
  2. 2.Accrued leave awarded at Ksh.43,285
  3. 3.Rest days awarded at Ksh.734,066
  4. 4.The award of service pay of Ksh.232,224 is set aside as it was not pleaded
  5. 5.The costs and interest awarded by the trial court are set aside
  6. 6.For the appeal and Cross-Appeal and proceedings before the trial court, each party bears its costs

Authorities

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Legislation

  • Employment Act, 2007Section 37
  • Employment Act, 2007Section 10(7)
  • Employment Act, 2007Sections 9, 10, 74
  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Sections 27, 28, 28(2), 28(4)
  • Employment Act, 2007Section 35(5) and (6)
  • Employment Act, 2007Section 40(1)
  • Employment and Labour Relations Court Act, 2011Sections 3 and 12

Cases cited (10)

  • Martin Ireri Ndwiga v Olerai Management Company
    [2017] eKLR
  • Kenya Women Finance Trust v Square Deal Kenya Limited
    Civil Appeal 36 of 2021
  • James Muriithi Njiru v Omega Risk Management Limited
    [2019] eKLR
  • Yaa v SGA Security Solutions Limited
    ELRCA No. E002 of 2022 (Malindi)
  • Atege v Monda
    (Appeal E007 of 2022) [2023] KEELRC 2816 (KLR) (9 November 2023)
  • Kamau v Delta Point Distributors Limited t/a Milele Lounge
    (Appeal E045 of 2022) [2023] KEELRC 1161 (KLR) (5 May 2023)
  • City Centre Cabs Limited v Nyange
    (Civil Appeal 627 of 2019) [2023] KECA 1116 (KLR) (22 September 2023)
  • World Explorers Safaris Limited v Cosmopolitan Travel Limited & another
    [2021] eKLR
  • Muchiri v Boresha Maisha Self Help Group
    (Civil Appeal 48 of 2022) [2024] KEHC 2488 (KLR) (11 March 2024)
  • Raila Amolo Odinga & Another v IEBC & 2 others
    [2017] eKLR
On appeal from
Malindi Chief Magistrate's Court (CMELRC)
Malindi CMELRC No. 7 of 2021
Jurisdiction invoked
First appeal to the Employment and Labour Relations Court under the Employment and Labour Relations Court Act, 2011 (Sections 3 and 12 cited on costs)

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, "Moriema Cottages Limited v Manjewa (Appeal E016 of 2023) [2024] KEELRC 1490 (KLR)", Case Analysis (2024). Appeal and Cross-Appeal from Malindi CMELRC No. 7 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1490/eng@2024-05-23

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