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ELRCPartially AllowedNot stated in the judgment as provided

Equator Bottlers Limited v Omanga (Appeal E045 of 2025) [2025] KEELRC 1461 (KLR)

High Court of Kenya (Employment and Labour Relations Court jurisdiction, first appellate)
15 May 2025
2,442 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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A Kenyan court confirmed that long-serving 'casual' workers automatically become permanent employees, but cut some of the money awarded to the worker.

What this practically means

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Executive summary

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This is a first appeal from the Magistrate's Court at Winam, which had found that Philip Oluoch Omanga's employment with Equator Bottlers Limited converted from casual to permanent status and that his summary dismissal was unlawful, awarding notice pay, damages, benefits in lieu of service, annual leave allowance, a certificate of service, costs and interest. Equator Bottlers appealed on six grounds: that conversion was never pleaded, that benefits in lieu of service are unknown to the Employment Act, that the adopted salary of Kshs. 18,000/- lacked evidentiary basis, that leave pay lacked particulars, that unlawful termination was unsupported by evidence, and that the 12 months' compensation award was unexplained. The Court, as a first appellate court, re-evaluated the evidence as it was entitled to do without having seen or heard the witnesses. It upheld the Magistrate's finding on conversion under sections 37 and 35 of the Employment Act, noting the Respondent's continuous service converted the contract. It nonetheless corrected the salary figure, computing Kshs. 16,980.60 monthly from the Appellant's own daily wage multiplicand of Kshs. 653.10, and recomputed all awards on that basis. The finding of unfair termination and the 12 months' compensation award under section 49 were affirmed, there being no disciplinary process, notice or hearing. The award of benefits in lieu of service was reversed as unknown to law. Leave dues were limited to three years under the section 90 limitation provision. The Magistrate's decision was set aside and substituted with an award of declaration, Kshs. 203,767.20 compensation, Kshs. 50,941.80 leave dues, certificate of service, and costs and interest of the claim in the Magistrate's Court, with no order as to costs of the appeal.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Learned Magistrate erred in determining the conversion of casual employment to permanent employment absent a specific pleading
  2. 2.Whether the award of 'benefits in lieu of service' was a remedy recognized under the Employment Act
  3. 3.Whether the adoption of Kshs. 18,000/- as the Respondent's monthly salary had an evidentiary basis
  4. 4.Whether the award for annual leave pay was supported by particulars and evidence
  5. 5.Whether the finding of unlawful termination was supported by evidence
  6. 6.Whether the Magistrate had a proper basis for exercising discretion to award twelve months' salary as compensation

Key legal issues

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01

Whether the Respondent's casual employment converted to a permanent/monthly term contract

Holding

The Court upheld the Magistrate's finding that the Respondent's employment was converted under section 37 of the Employment Act, entitling him to a monthly salary.

Reasoning

Section 37(1) deems a casual employee who works for a period equivalent to not less than one month, or performs work expected to last three months or more, to be employed on monthly wages. The Respondent served continuously from 2018 to 2022, meeting the statutory threshold. The Court found basis for the Magistrate's conclusion that a monthly salary was payable.

p. 5
02

The correct monthly salary figure for computation of awards

Holding

The Magistrate's adoption of Kshs. 18,000/- was erroneous; using the Appellant's own daily wage multiplicand of Kshs. 653.10, the monthly salary is Kshs. 16,980.60, and all monetary awards were recomputed on that basis.

Reasoning

The Court used the daily wage of Kshs. 653.10 supplied by the Appellant itself, multiplying to Kshs. 16,980.60 per month. The difference of Kshs. 1,019.40 was deducted from the notice pay. The compensation and leave awards were recalculated using the corrected figure.

p. 5
03

Whether the termination was unfair and whether 12 months' compensation was warranted

Holding

The termination was unfair; no disciplinary action, notice or hearing was conducted, and an award of 12 months' compensation under section 49 was upheld given the length of service.

Reasoning

The Appellant did not subject the Respondent to any disciplinary process, issue notice, or conduct a hearing. Having served from 2018 to 2022 per the pay advice produced in court, the award of 12 months' wages as compensation under section 49 was found sufficient and in order.

p. 5
04

Award of benefits in lieu of service

Holding

The award of benefits in lieu of service was reversed as no such remedy exists in law.

Reasoning

Service pay arises under section 35 of the Employment Act. The Respondent was not entitled to service pay, and benefits in lieu of service are not provided for in the Employment Act. The Magistrate therefore lacked any legal basis for that head of award, which was set aside.

p. 5
05

Annual leave dues and limitation

Holding

The leave award was reduced to three years' entitlement on limitation grounds under section 90 of the Employment Act.

Reasoning

Although the Respondent served six years, claims for the earlier years were statute-barred under section 90. The Court therefore limited recoverable leave dues to three years, computed at Kshs. 50,941.80 using the corrected monthly salary.

p. 5

Legal principles established

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  • An employee initially engaged on casual terms whose service meets the thresholds in section 37(1) of the Employment Act is converted to a monthly paid term contract.
  • Benefits in lieu of service are not a remedy known to law under the Employment Act.
  • A first appellate court may reconsider the evidence and draw its own conclusions while making allowance for not having seen or heard the witnesses.
  • Leave claims are subject to the limitation period under section 90 of the Employment Act, restricting recovery to three years of accrued leave.

Court orders

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  1. 1.A declaration that the termination of the Respondent was unfair and unlawful.
  2. 2.Compensation for the unlawful and unfair dismissal equivalent to 12 months salary - Kshs. 203,767.20.
  3. 3.Annual leave dues for 3 years - Kshs. 50,941.80.
  4. 4.Certificate of service.
  5. 5.Costs and interest of the claim in the Magistrate's Court to the Respondent.
  6. 6.No order on the costs for the appeal.
  7. 7.The decision of the Learned Magistrate set aside and substituted with a decision allowing the Respondent's claim to the stated extent.

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

On appeal from
Magistrate's Court at Winam
Not stated in the judgment as provided
Jurisdiction invoked
First appellate jurisdiction over appeals from the Magistrate's Court in employment and labour relations matters

Relief refused

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Benefits in lieu of service (Kshs. 45,000/- as awarded by the Magistrate)

Benefits in lieu of service are not provided for in law and service pay was not available to the Respondent

p. 5

Costs of the appeal

The Court made no order on the costs for the appeal

p. 5

Costs

Costs and interest of the claim in the Magistrate's Court awarded to the Respondent; no order on the costs for the appeal.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The Court, as the first appellate court, is entitled to reconsider the evidence, evaluate it and draw its own conclusions but making allowance for the fact that it neither saw nor heard the witnesses.
p. 4Duty of a first appellate court
The Respondent served for a period which indeed converted his contract of employment to that covered under section 37 and 35. The learned Magistrate did not err in holding the Respondent had his term converted.
p. 5Conversion of casual employment under section 37
The Appellant did not take the Respondent through any disciplinary action, no notice was served upon the Respondent nor was a hearing conducted.
p. 5Procedural fairness in termination
In the final analysis, the decision of the Learned Magistrate is set aside and substituted with a decision allowing the Respondent's claim to the following extent:
p. 5Disposition
Compensation for the unlawful and unfair dismissal equivalent to 12 months salary – Kshs. 16,980.60 x 12 = Kshs. 203,767.20
p. 5Final orders - compensation
No order on the costs for the appeal.
p. 5Final orders - costs of appeal

Issues in the judgment

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minor

The judgment states the Respondent 'had worked for the Appellant from 2018 to 2022 per the pay advice produced in Court which was a period of 6 years', but the period 2018-2022 is approximately four years, not six; the pleadings also describe employment beginning in October 2017.

minor

The judgment does not record the case number of the memorandum of appeal or the trial suit number, and no neutral citation is provided.

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, "Equator Bottlers Limited v Omanga (Appeal E045 of 2025) [2025] KEELRC 1461 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1461/eng@2025-05-15

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