Nanyuki Water & Sewage Company Limited v Benson Mwiti Ntiritu & 4 others [2018] KECA 196 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that long-serving casual workers automatically become monthly-contract employees, but reinstatement is rare.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.What is the true construction and objective of section 37 of the Employment Act - does it automatically convert casual employment into a regular or permanent contract of service?
- 2.Under what circumstances should an order for reinstatement of an employee be made?
- 3.What remedies are appropriate in the event of termination?
Key legal issues
#Interpretation of section 37 of the Employment Act
Section 37 operates automatically: where a casual employee works continuous days aggregating not less than a month on work not completable within three months, the contract is deemed one where wages are paid monthly and section 35(1)(c) applies. It does not impose permanent employment.
The court read section 37 alongside the statutory definitions of 'contract of service' and 'casual employee', and its own precedents (Chemelil Sugar, Haco Industries) holding that the provision converts casual service into a term contract by operation of law. The trial court's declaration of permanency was too broad, but the finding of conversion to monthly-paid contracts was affirmed.
Whether the termination was lawful
The termination was unlawful because no notice under section 35(1)(c) was served and no termination records were produced, and the unfair labour practice finding was affirmed.
Once section 37 conversion applied, the appellant was bound to comply with section 35(1)(c) and other termination provisions. No notice was served and the appellant, whose legal duty it was to keep employee records, produced none relating to termination. The defence of bare denial against the respondents' muster rolls was an idle one.
Propriety of the reinstatement order
The reinstatement order was set aside: none of the section 49(4) factors were considered, trust had broken down, and reinstatement is reserved for very exceptional cases.
Reinstatement under section 12(3) of the ELRC Act must accord with section 49(4) of the Employment Act's thirteen factors. The status quo preserved by the trial court was that the respondents were not in employment when the claim was filed. Ordering reinstatement would impose employees on an unwilling employer contrary to the laws of contract.
Backdated allowances for housing, medical, water and food
That declaration was set aside because the claims were special damages neither pleaded nor proved, and the trial court's own dismissal of them was unchallenged.
The respondents merely prayed for the provisions without particularising them, quantifying them only in submissions at over Sh.18 million. The trial court dismissed the special damages claim yet granted declarations for the same items in its final orders, which the appellate court found contradictory. There was no cross-appeal.
Legal principles established
#- Section 37 of the Employment Act automatically converts casual employment into a term contract where wages are paid monthly, to which section 35(1)(c) applies; it does not of itself create permanent employment
- Reinstatement should only be ordered in very exceptional circumstances, and the court must consider the thirteen factors listed in section 49(4) of the Employment Act before ordering it
- Special damages must be specifically pleaded and strictly proved
- Where an employer fails to produce a written contract or written particulars in legal proceedings, the burden of proving or disproving an alleged term of employment is on the employer
Court orders
#- 1.A declaration that Section 37 of the Employment Act, 2007 applies to the employment of the respondents to the effect that their casual employment was converted into a contract of service where wages are paid monthly and to which section 35 (1) (c) of the Act applies, and the respondents were entitled to such terms and conditions of service as they would have been entitled to had they not initially been employed as casual employees
- 2.A declaration that the respondents' employment was unlawfully terminated
- 3.An order that the respondents and each of them shall be paid one month's salary in lieu of notice
- 4.An order that the respondents and each of them shall be paid salary in lieu of leave not taken
- 5.A declaration that the appellants had engaged in unfair labour practices
- 6.An order that the respondents and each of them shall be paid compensation equivalent to three months salary
- 7.Each party shall bear its own costs of this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment & Labour Relations Court of Kenya at Nyeri
- ELR Cause No. 64 of 2013
- Jurisdiction invoked
- First appellate jurisdiction over appeals from the Employment & Labour Relations Court
Relief refused
#Reinstatement of the respondents into employment
The trial court considered none of the section 49(4) factors; reinstatement is only granted in very exceptional circumstances and confidence between the parties had irretrievably broken down
Backdated allowances for housing, medical, water and food
These were special damages which were neither specifically pleaded nor strictly proved, and the trial court had itself dismissed that claim with no cross-appeal
Declaration that the respondents are permanent employees with contracts reduced into writing
Section 37 converts casual employment into a monthly-paid term contract, not permanent employment
Costs
Each party shall bear its own costs of this appeal
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
we find and hold, as the trial court did, that the contracts of service of the respondents assumed permanency and were "deemed to be ones where wages are paid monthly and section 35 (1) (c) shall apply to that contract of service" in terms of section 37.
As this Court emphatically stated in the case of Kenya Airways Limited vs Aviation & Allied Workers Union Kenya & 3 Others [2014] eKLR, the remedy of reinstatement should not be given except in very exceptional circumstances.
A claim for special damages is one that is ascertainable and quantifiable in monetary terms at the time of institution of the suit. There is a plethora of authorities stating that they must be specifically pleaded and strictly proved.
(i) A declaration that Section 37 of the Employment Act, 2007 applies to the employment of the respondents to the effect that their casual employment was converted into a contract of service where wages are paid monthly and to which section 35 (1) (c) of the Act applies.
(vii) Each party shall bear its own costs of this appeal
Issues in the judgment
#The trial court's judgment is internally contradictory: it dismissed the special damages claim yet granted declarations for the same allowances in its final orders
The judgment describes the trial court's status quo order as made on '18th September, 2003' in the 1st respondent's affidavit but as '18th September, 2013' elsewhere, an apparent date error
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nanyuki Water & Sewage Company Limited v Benson Mwiti Ntiritu & 4 others [2018] KECA 196 (KLR)", Case Analysis (2018). Civil Appeal No. 20 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/196/eng@2018-10-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.