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ELRCDismissedMombasa ELRC Appeal arising from Mombasa CMELRC E257 of 2022· [2025] KEELRC 392 (KLR)

Hamadi v Abbas Traders Limited (Appeal E126 of 2024) [2025] KEELRC 392 (KLR)

Employment and Labour Relations Court
7 February 2025
2,185 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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This is a first appeal against the judgment of the Mombasa magistrates' court (CMELRC E257 of 2022) delivered on 17 May 2024, which dismissed the appellant's claim for terminal dues arising from alleged unlawful and unfair termination of employment. The appellant claimed he was employed by the respondent as a general labourer/loader from 2010 at Ksh.15,000 per month until 16 December 2021, and sought notice pay, house allowances, leave pay, compensation, overtime, unremitted NHIF, service pay and costs. The respondent denied the employment relationship, asserting the appellant was a day labourer engaged by gang leaders under a Memorandum of Agreement, paid on piece-rate and controlled by the gang leader. The trial court found the employment nexus broken by the memorandum, held the appellant was a piece-rate employee whose claims did not lie, and dismissed the claim with costs. Mbarũ J re-evaluated the evidence as a first appeal but declined to disturb the trial court's credibility-based findings. The court applied authority upholding labour outsourcing as a lawful business strategy, and found the Memorandum of Agreement with gang leaders unchallenged, the appellant listed among workers sourced under it, and his employment lying with the gang leader. The job identity card was explained as a COVID-19 access pass, and payment of medical bills did not prove employment. Lacking an employment relationship with the respondent, the appellant's terminal dues claims could not accrue. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Whether an employer-employee relationship existed between the appellant and the respondent

Holding

No such relationship was established; the appellant was employed by the gang leader who recruited, controlled and paid him under the Memorandum of Agreement.

Reasoning

The respondent produced a Memorandum of Agreement with gang leaders to provide contract workers; the appellant was listed among persons sourced under the agreement. The gang leader admitted engaging the appellant on piece-rate work, and this admission was not challenged. Outsourcing of labour is lawful under Kenyan practice, and where the third party employs and controls the worker, no direct employment relationship with the principal arises.

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02

The standard of interference by a first appellate court

Holding

The court, being a first appeal, must re-evaluate the evidence but is reluctant to disturb findings that turn on witness credibility.

Reasoning

The court applied the settled principle that on a first appeal the court re-evaluates the material on record while bearing in mind that it had no opportunity to see or hear the witnesses, and thus will not lightly upset the trial court's assessment of credibility. Finding no compelling ground, the court deferred to the trial court's analysis.

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03

Whether the job identity card and payment of medical bills proved employment with the respondent

Holding

They did not; the job card was issued only for access during the COVID-19 period and medical payment did not evidence an employment relationship.

Reasoning

The respondent's witness explained that the job identity card was issued to enable access to the office during the COVID-19 period and was never intended as evidence of employment. The respondent also settled the medical bill owing to its relationship with gang leaders. The court accepted these explanations, so the documents relied on did not discharge the appellant's burden of proving the employment relationship.

p. 3

Legal principles established

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  • On a first appeal the court re-evaluates the material on record but is reluctant to upset the trial court's findings on credibility of witnesses absent compelling grounds.
  • Labour outsourcing through gang leaders is an accepted business practice in Kenya and is not illegal provided fair labour practices are followed.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs to the respondent
On appeal from
Magistrates' Court (ELRC), Mombasa
CMELRC E257 of 2022
Jurisdiction invoked
First appeal from the magistrates' court under the Employment Act / ELRC Act (not expressly quoted in the judgment)

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, "Hamadi v Abbas Traders Limited (Appeal E126 of 2024) [2025] KEELRC 392 (KLR)", Case Analysis (2025). Mombasa ELRC Appeal arising from Mombasa CMELRC E257 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/392/eng@2025-02-07

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