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ELRCDismissedNot stated on the face of the judgment (Appeal from Mavoko Chief Magistrate ELRC Cause No. E026 of 2022)· [2025] KEELRC 3705 (KLR)

Hightech Cylinder Manufacturing Co. Limited v Wamukota (Appeal E012 of 2023) [2025] KEELRC 3705 (KLR)

Employment and Labour Relations Court of Kenya
17 December 2025
6,014 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer lost its appeal after unilaterally cutting a worker's salary; the court held this was constructive dismissal and awarded full terminal dues.

What this practically means

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Executive summary

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The Appellant appealed against the judgment of Hon. E.K. Suter (Principal Magistrate) in Mavoko Chief Magistrate ELRC Cause No. E026 of 2022, which had partially allowed the Respondent's claim for wrongful, unfair and unlawful termination, awarding notice pay of Kshs. 23,050, compensation for unfair termination of Kshs. 115,250 (five months' salary) and house allowance of Kshs. 127,928, totalling Kshs. 266,228, plus costs and interest. The appeal was canvassed by written submissions and the court adopted four issues: existence of an employer-employee relationship; whether termination was unlawful and unfair; whether the terminal dues awards were erroneous; and costs. On the first issue, the court held that casuals are employees and that continuous engagement of over a month converts the engagement to a monthly term contract under section 37 of the Employment Act; the Employee ID Card and DW1's testimony supported the trial court's finding of a contractual relationship, which the court declined to disturb. On termination, the court found the exit arose from the employer's unilateral proposal to reduce salary by Kshs. 2,000, which the Respondent rejected; applying the Coca Cola v Ligaga constructive dismissal test, this amounted to repudiation of the contract and constructive dismissal, and the employer ought instead to have declared redundancy, making the procedure unlawful. Consequently, notice pay, the five months' compensation (reasonable under section 49(4) given three years' service) and housing allowance under section 31 were all upheld. The appeal was dismissed with costs to the Respondent.

Key legal issues

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01

Whether an employer-employee relationship existed

Holding

The trial court's finding that the Respondent was a contractual employee was upheld; casuals are employees and continuous engagement converts them to term contracts under section 37 of the Employment Act

Reasoning

The court noted that by definition a casual worker under section 2 of the Employment Act is still an employee. The Respondent worked from February 2018 to March 2021, held an Employee ID Card issued by the Appellant's accountant, and DW1 testified to meetings with employees and permission to seek other work. The totality of evidence supported the trial court's finding of a contractual employment relationship.

p. 5
02

Whether the Respondent was unlawfully and unfairly terminated

Holding

The unilateral proposal of a Kshs. 2,000 salary reduction, rejected by the employee, amounted to repudiation and constructive dismissal; the unfair termination finding was upheld

Reasoning

The court found it undisputed that the exit arose from the employer's proposal to cut the salary by Kshs. 2,000, which the Respondent rejected. Applying the Court of Appeal's test in Coca Cola v Ligaga, the unilateral reduction was a repudiatory breach. The employer should instead have declared redundancy; failing that, the procedure was also unlawful.

p. 9
03

Whether the terminal dues awards (notice pay, 5 months' compensation, house allowance) were erroneous

Holding

All three awards were upheld as flowing from the upheld findings of unfair termination and contractual employment

Reasoning

Having upheld the finding of unfair termination, notice pay under section 35 was upheld. The 5 months' compensation was reasonable given the 2018-2021 service period and section 49(4) factors, per Mbogo v Shah. The housing award followed from the finding that the claimant was a contractual employee converted under the Act, since section 31 makes housing a basic condition of service.

p. 10

Legal principles established

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  • A first appellate court must revisit the evidence on record, evaluate it and reach its own conclusion
  • Under section 37 of the Employment Act a casual employee engaged for the equivalent of one month or more is converted to a monthly term contract entitled to statutory terms
  • Unilateral reduction of an employee's salary amounts to repudiation of the employment contract and constitutes constructive dismissal
  • Where an employer cannot pay salaries, the lawful course is a declaration of redundancy, and failing to follow it renders the termination procedurally unlawful

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs of the appeal to be paid to the Respondent by the Appellant

Authorities

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Legislation

  • Employment Act, 2007Section 2 (definition of casual employee)
  • Employment Act, 2007Section 37(1)-(4) (conversion of casual employment to term contract)
  • Employment Act, 2007Section 35(1)(c) (notice)
  • Employment Act, 2007Section 41 (procedure for termination)
  • Employment Act, 2007Section 43 (proof of reasons for termination)
  • Employment Act, 2007Section 45 (unfair termination)
  • Employment Act, 2007Section 47(5) (burden of proof)
  • Employment Act, 2007Section 49(1)(c) and 49(4) (compensation for unfair termination)
  • Employment Act, 2007Section 31(1)-(2) (housing)
  • Employment Act, 2007Section 10(1), 10(2)(h), 10(5) (written contract; variation of terms)
  • Constitution of Kenya, 2010Article 47(1) and 47(2) (fair administrative action)
  • Fair Administrative Action ActSection 4

Cases cited (10)

  • Selle & Another v Associated Motor Boat Co. Ltd & Others
    [1968] EA 123
  • Peter Wambugu Kariuki And 16 Others v Kenya Agricultural Research Institute
    [2013] eKLR
  • Samwel Okinda Aponga & Another v Match Master Limited
    [2015] eKLR
  • Josphat Njuguna v High Rise Self Group
    [2014] eKLR
  • Pius Machafu Isindu v Lavington Security Guards Limited
    [2017] eKLR
  • Kenya Union of Commercial, Food & Allied Workers v Meru North Farmers Sacco Ltd
    [2013] eKLR
  • Alphonse Maghanga Mwachanya v Operation 680 Limited
    Mombasa ELRC Cause No 146 of 2012
  • Ibrahim Kamasi Amoni v Kenital Solar Limited
    Nairobi ELRC no 1112 of 2015
  • Coca Cola East & Central Africa Limited v Maria Kagai Ligaga
    Nairobi CACA No 20 of 2012
  • Mbogo v Shah
On appeal from
Principal Magistrate's Court at Mavoko (Mavoko Chief Magistrate ELRC No. E026 of 2022)
Mavoko MCELRC Cause No. E026 of 2022
Jurisdiction invoked
First appellate jurisdiction over subordinate court ELRC causes (Employment Act / ELC Act appellate structure); court sat as first appellate Court re-evaluating evidence

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, "Hightech Cylinder Manufacturing Co. Limited v Wamukota (Appeal E012 of 2023) [2025] KEELRC 3705 (KLR)", Case Analysis (2025). Not stated on the face of the judgment (Appeal from Mavoko Chief Magistrate ELRC Cause No. E026 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/3705/eng@2025-12-17

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