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ELRCPartially AllowedNot stated in the judgment text (previously filed as Butali MELRC.ELRC 81 of 2020)· [2024] KEELRC 2765 (KLR)

Mikis & 55 others v Frodak Services (Frodak Kenya Limited & another (Employment and Labour Relations Cause 10 of 2023) [2024] KEELRC 2765 (KLR)

Employment and Labour Relations Court
7 November 2024
9,938 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~40 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court awarded 45 sugarcane loaders terminal dues from their labour agency employer, but ruled their strike-related termination lawful.

What this practically means

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Executive summary

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Forty-five former sugarcane loaders sued Frodak Kenya Limited (1st Respondent) and Butali Sugar Limited (2nd Respondent) claiming unfair termination following the cessation of their work on 2nd May 2017, and seeking terminal dues including leave, public holiday pay, overtime, housing allowance, severance, exemplary damages, underpayment, notice, rest days, paternity leave, 12 months' compensation and a certificate of service. The suit was transferred from Butali after the magistrates' court found it exceeded its pecuniary jurisdiction. The court first addressed validity of claims, abating four deceased claimants' claims (Nos. 21, 22, 30, 44) for want of substitution and proceeding with the rest notwithstanding pending suits in the magistrates' courts. The objection to RW1 and RW2's authority to testify was dismissed as a procedural technicality. Applying the ILO primacy-of-fact principle and Abyssinia Iron & Steel, the court held the 1st Respondent was the employer in the triangular outsourced labour arrangement; the 2nd Respondent was only a user enterprise. Applying Krystalline Salt, the court found the claimants were not piece rate workers but paid by days worked on contractual employment. The Kakamega Labour Office strike report established the claimants took part in an unprotected strike; coupled with effluxion of the contracts, termination was held lawful and fair. Consequently, only leave pay in lieu (Kshs. 56,976), service pay (Kshs. 18,579) and underpayment (Kshs. 99,672) per claimant were awarded against the 1st Respondent, with a certificate of service, costs to the claimants, interest if unpaid within 30 days, and a 30-day stay. All other claims were dismissed.

Key legal issues

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01

Competence of corporate witnesses without written authority

Holding

Objection dismissed; testimony of RW1 and RW2 was admissible as no contractual issues were raised and no prejudice was caused

Reasoning

The claimants relied on Order 4 Rule 4 of the Civil Procedure Rules and Microsoft Corporation v Mitsubishi to argue the witnesses lacked authority. The court applied the Court of Appeal decision in Wines & Spirits Kenya Limited, holding that written authorization is only mandatory where contractual issues are raised. The objection was raised for the first time in submissions, not in pleadings or cross-examination, and the court invoked Article 159(2)(c) to prioritize substantive justice over procedural technicality.

p. 9
02

Identity of the employer in a triangular outsourced labour arrangement

Holding

The 1st Respondent (labour provider) was the employer; the 2nd Respondent was a third-party user

Reasoning

Relying on the contracts between the 1st and 2nd Respondents, NSSF remittances by the 1st Respondent, gate passes and NSSF statements naming the 1st Respondent as employer, and applying ILO Recommendation paragraphs 26 and 40 and the Abyssinia Iron & Steel decision, the court found the 1st Respondent employed, supervised and paid the claimants. The 2nd Respondent merely received outsourced labour; the arrangement was lawful.

p. 11
03

Nature of employment - piece rate or contractual (days worked)

Holding

Claimants were not piece rate workers; they were paid for days worked on contractual employment

Reasoning

Applying the section 2 Employment Act definition of piece work and the Krystalline Salt decision, the court noted piece work pay is ascertained by amount of work. Although the 1st Respondent claimed tonnage-based piece rate payment, the payroll evidence showed wages varied by days worked, not tonnage. CW1 could not substantiate the alleged Kshs. 4,080 monthly salary. The court therefore found contractual employment paid by days worked.

p. 12
04

Whether termination was fair

Holding

Termination was lawful and fair - reasons were valid (participation in an unprotected strike) and the contracts ended by effluxion of time

Reasoning

The Kakamega County Labour Office strike report, admitted without protest as an official document, gave a vivid account of the illegal strike. Under section 76 of the Labour Relations Act the strike was unprotected. The court held the reasons for termination valid and lawful. Procedurally, the contracts were due to end on the same day as the strike, so termination was by effluxion of contract, consistent with the court's own decision in Frodak Kenya Limited v Philip Lumanyasi Makunda (Kakamega ELRC Appeal No. E005 of 2023).

p. 16
05

Reliefs available

Holding

Only leave pay in lieu (Kshs. 56,976), service pay (Kshs. 18,579) and underpayment (Kshs. 99,672) awarded, per the court's Makunda decision; all other claims dismissed

Reasoning

Because termination was found lawful and fair, section 49 compensation and exemplary/aggravated damages were unavailable. The court substituted the erroneously pleaded severance pay with service pay under section 35(5) as the claimants had no social security, fixing completed years as 2014-2016. Statutory minimum wage of Kshs. 12,386.35 applied for underpayment, following the Makunda decision, no contrary evidence having been adduced.

p. 18

Legal principles established

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  • The existence of an employment relationship should be determined by facts, not the form or label the parties give it (primacy of fact)
  • In outsourced (triangular) labour arrangements, the employer is the provider of labour, not the user enterprise, where the provider employs, supervises and pays the workers
  • Piece work is work whose pay is ascertained by the amount of work performed irrespective of the time occupied; where workers are paid by days worked, they are not piece rate employees
  • Written authorisation under seal is not required for a witness to testify for a corporation unless contractual issues are raised; objections to witness authority raised only in submissions are procedural technicalities
  • Casual employment continuing for a period equivalent to at least one month is deemed monthly-paid employment under section 37 of the Employment Act

Court orders

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  1. 1.Judgment entered for each of the Claimants against the 1st Respondent except claimants No. 21 Philip Bernard Nyongesa, No. 22 Paul Mutsami Francis, No. 30 Doctor Luchisoi and No. 44 Wekesa Patrick Munjali whose claims abated
  2. 2.Award of accrued leave in lieu of Kshs. 56,976
  3. 3.Payment of service pay of Kshs. 18,579/-
  4. 4.Payment of underpayment for Kshs. 99,672/-
  5. 5.Respondent to issue a certificate of service to the claimants pursuant to section 51 of the Employment Act
  6. 6.Costs to the claimants
  7. 7.Amounts awarded to attract interest at Court rates if not paid in full within 30 days of judgment
  8. 8.All other claims dismissed
  9. 9.Stay of 30 days granted
Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court in all employment claims; suit transferred following ruling of Hon. ZJ Nyakundi that the claim exceeded the magistrates' court's pecuniary jurisdiction

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mikis & 55 others v Frodak Services (Frodak Kenya Limited & another (Employment and Labour Relations Cause 10 of 2023) [2024] KEELRC 2765 (KLR)", Case Analysis (2024). Not stated in the judgment text (previously filed as Butali MELRC.ELRC 81 of 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2765/eng@2024-11-07

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