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ELRCDismissedCause No. 40 of 2024 (Lead File), with Causes No. E038, E039 and E041 of 2024 consolidated· [2024] KEELRC 2793 (KLR)

Mwadime & 3 others v Polystar Plastiks Limited (Cause E040, E038, E039 & E041 of 2024 (Consolidated)) [2024] KEELRC 2793 (KLR)

Employment and Labour Relations Court
14 November 2024
2,962 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Employment and Labour Relations Court, through M. Mbarũ J, dismissed a consolidated claim by Danson Mwadime (lead file Cause No. 40 of 2024, applying to Causes E038, E039 and E041 of 2024) against his former employer. The claimant, employed from 14 February 2016 as a casual labourer on Ksh.300 daily, was converted to written annual contracts from 1 January 2019 and last served under a 2023 contract at Ksh.22,000 monthly. On 16 November 2023 the respondent issued notice terminating employment effective 16 December 2023 on grounds of redundancy due to financial constraints. The claimant sought notice pay, severance pay of Ksh.88,000, overtime of Ksh.181,016.10, 12 months' compensation, a corrected Certificate of Service and costs. The court framed three issues: period of employment, unfairness of termination, and remedies. It held that conversion of casual employment into written contract terms under Section 10(3) of the Employment Act is lawful and binding, and that earlier contracts lapsed on their terms, restricting severance to the 2023 service year. Redundancy was held lawful: notices were issued to the claimant and the labour officer, satisfying Section 40, and the employee's admission of being informed sufficed. The overtime claim failed for want of proof and because, as a continuing injury under Section 90, it had to be pursued within 12 months of cessation. The Certificate of Service covering the last contract phase complied with Section 51. The claim was dismissed with each party bearing its own costs, the judgment applying to the consolidated suits.

Key legal issues

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01

Period of employment and effect of conversion into written annual contracts

Holding

Employment began on 14 February 2016 as casual labour but was lawfully converted into written annual contracts from 1 January 2019; earlier contracts lapsed on their terms and only the 2023 contract ended prematurely by redundancy. Claims are limited by Section 90 to 3 years back, and to 12 months for continuing injuries.

Reasoning

Section 10(3) of the Employment Act permits conversion of casual employment into written terms, which bind the court unless unlawful or contrary to public policy. The 2019 written contract was therefore valid. Prior contracts ended on their own terms, so severance-type claims cannot be extended over them. Section 90 imposes a 3-year limitation for employment claims and a 12-month window from cessation for continuing injuries, which frames each claim.

p. 5
02

Whether the redundancy amounted to unfair termination

Holding

No unfair termination. The redundancy was for financial and operational reasons the claimant did not contest; notices were issued to the claimant and the labour officer, and the respondent complied with Section 40 of the Employment Act.

Reasoning

Redundancy on operational grounds is a lawful mode of termination. The claimant admitted receipt of the 16 November 2023 notice and did not contest the financial constraints cited. The employer must issue notice together with notice to the labour officer under Section 40; this was done, and notice may be oral or written. The respondent also offered terminal dues including notice pay and severance, which the court described as generous and which the claimant should have accepted.

p. 5
03

Severance pay claim

Holding

Severance pay is payable only for the period affected by redundancy (the 2023 contract), not for earlier contracts that lapsed on their terms; the respondent's offer of severance for one year should have been accepted.

Reasoning

Section 40(1)(g) provides severance at not less than fifteen days' pay per completed year of service. Severance is due for every full year worked and is not prorated. Because earlier contracts ended by effluxion of time and not redundancy, extending severance over them would negate the very written-contract principle the claimant invokes under Section 10(3). The redundancy therefore attracts severance only for the 2023 service year.

p. 6
04

Overtime claim

Holding

The overtime claim fails for lack of proof and for limitation. The schedule filed was undated and unsigned; in 2023 only a day shift existed, and the claim was filed more than 12 months after cessation of any alleged continuing injury.

Reasoning

The claimant's timesheets were not signed by the respondent, and the schedule did not indicate the years referenced. The respondent's uncontroverted evidence was that the night shift ended in 2019 and by 2023 only the day shift operated, from 8 a.m. to 5 p.m. Overtime accrues monthly and unpaid overtime is a continuing injury under Section 90, but the claim filed on 10 May 2024 exceeded 12 months from cessation, following the Court of Appeal in German School Society.

p. 6

Legal principles established

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  • Conversion of casual or oral employment into written contract terms under Section 10(3) of the Employment Act is lawful, and the court is bound by the written terms unless unlawful or contrary to public policy
  • Redundancy for operational reasons is a lawful ground for termination of employment
  • Notice of redundancy to an employee may be oral or written, and admission of being informed of the circumstances suffices
  • Severance pay is due for every full year worked and is not prorated
  • Overtime accrues monthly and, if unpaid, is a continuing injury subject to the 12-month limitation in Section 90 of the Employment Act
  • Under Section 51 of the Employment Act, a Certificate of Service should issue at the end of each phase of employment

Court orders

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  1. 1.The claim is dismissed
  2. 2.Each party bears its own costs
  3. 3.The judgment applies to the consolidated suits: Cause No. E038 of 2024, Cause No. E039 of 2024, Cause No. E041 of 2024
Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court under the Employment Act; claims consolidated as arising from the same cause of action against the same respondent

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Mwadime & 3 others v Polystar Plastiks Limited (Cause E040, E038, E039 & E041 of 2024 (Consolidated)) [2024] KEELRC 2793 (KLR)", Case Analysis (2024). Cause No. 40 of 2024 (Lead File), with Causes No. E038, E039 and E041 of 2024 consolidated. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2793/eng@2024-11-14

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