Omwaya v Hygenic Butchery Trading Limited (Civil Appeal 21 of 2019) [2023] KECA 1165 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a monthly-paid cook was not a casual worker and that employers must pay a mandatory 15% house allowance on top of minimum wage.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the appellant was awarded lesser reliefs than he was entitled to
Key legal issues
#Status of the appellant and applicable minimum wage
The appellant was not a casual employee but a monthly contractual employee entitled to the statutory minimum wage of Kshs. 12,386.35 under Legal Notice No. 112 of 2017
Section 2 of the Employment Act defines a casual employee as one paid at the end of each day and engaged for not longer than 24 hours at a time. The appellant was engaged on an oral contract at a monthly salary of Kshs. 12,000, which does not fit that definition. He was therefore protected by Section 45 and entitled to wages-order minimums under Section 48 of the Labour Institutions Act, which may not be varied by agreement.
Date of commencement of employment
Employment commenced in January 2017, as the respondent produced no written contract to disprove the appellant's assertion
Relying on Section 10(7) of the Employment Act, where an employer fails to produce a written contract or written particulars, the burden of proving or disproving an alleged term of employment falls on the employer. The respondent adduced no proof of an October 2017 commencement date, so the appellant's claim of January 2017 prevailed, extending the service period to 12 months and 7 days.
House allowance
The appellant was entitled to a house allowance at 15% of his basic minimum wage, an entitlement the trial court overlooked; the appeal succeeded only on this head
Section 31(1) of the Employment Act obliges an employer to provide reasonable housing or a sufficient housing allowance, and Section 4 of the Regulation of Wages (General) Order fixes the allowance at 15% of the basic minimum wage. The exception in Section 31(2) did not apply because the contract did not consolidate a rent element. The court awarded what the appellant claimed, Kshs. 1,401.86.
Gratuity and service pay
The appellant was not entitled to gratuity or service pay
Following H. Young & Company EA Limited v Javan Were Mbango, gratuity is a gratis payment payable only under contract or collective agreement, distinct from severance pay under Section 40. The appellant was not on a fixed-term contract, and since the respondent contributed to the NSSF on his behalf, he fell within the Section 35(6)(d) exclusion to service pay.
Compensation for unfair termination under Section 49(1)(c)
The trial court's failure to award compensation under Section 49(1)(c) was a lawful exercise of discretion which the Court of Appeal would not disturb
Section 49 remedies are discretionary, as the use of the word 'may' and the 13 considerations in Section 49(4) make clear, per Co-operative Bank of Kenya Ltd v Banking Insurance & Finance Union. On the Mbogo v Shah principle, the appellate court interferes with discretion only where the judge misdirected herself or considered or failed to consider relevant matters; none was shown here.
Public holidays claim
The public holidays claim failed for want of particularisation
The right to payment for work on public holidays under Section 10 of the Act requires the employee to outline how the claimed holidays arose, since each year's schedule differs and some holidays depend on gazettement. The appellant did not specify the dates he worked, and there was no proof of work on any particular public holiday, so the trial court's decision was upheld.
Legal principles established
#- An employee engaged on an oral contract for a monthly salary is not a casual employee and is protected from unfair termination under Section 45 of the Employment Act
- Where an employer fails to produce a written contract or written particulars, the burden of proving or disproving an alleged term of employment lies on the employer
- Minimum wages and conditions in a wages order constitute terms of employment that may not be varied by agreement
- An employer must either provide reasonable housing accommodation or pay a house allowance of 15% of the basic minimum wage, as a mandatory statutory requirement
- Remedies under Section 49 of the Employment Act, including compensation and reinstatement, are discretionary rather than mandatory, to be granted on the peculiar facts of each case having regard to the Section 49(4) considerations
- The purpose of compensation for unfair dismissal is to make good the employee's loss, not to punish the employer
Court orders
#- 1.Appeal allowed only to the extent that the appellant is entitled to a house allowance in the sum of Kshs. 1,401.86 in addition to the reliefs awarded by the trial court
- 2.Each party to bear their own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court, Nakuru
- Not stated in the judgment
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 31(1)(a) of the Court of Appeal Rules, 2022
Relief refused
#Increased payment in lieu of notice (Kshs. 14,243.15)
Appellant terminated when Legal Notice No. 112 of 2017 was in force; minimum wage of Kshs. 12,386.35 applied
Higher underpayment award (Kshs. 17,944)
Entitlement computed on Kshs. 12,386.35 for 12 months, yielding Kshs. 4,636.20
Overtime pay
Work shift manuals showed the appellant worked in shifts with a one-hour daily break
Gratuity or service pay
Not premised on any law, contract or collective agreement, and NSSF contributions excluded service pay under Section 35(6)(d)
Compensation for public holidays beyond the trial award
Appellant did not particularise the specific public holidays worked
Compensation for unfair termination under Section 49(1)(c)
Remedy is discretionary; no misdirection by the trial judge was demonstrated
Higher rest days compensation (Kshs. 60,374.02)
Entitlement was 52 rest days calculated on monthly salary of Kshs. 12,386.35, matching the trial award
Costs
Each party to bear their own costs
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.
Accordingly, the appeal herein partially succeeds to the extent that the appellant was entitled to a house allowance in the sum of Kshs.1,401.86/- as set out in paragraph 49 of this judgment. Each party to bear their own costs.
the minimum rates of remuneration or conditions of employment established in a wages order constitute a term of employment of any employee to whom the wages order applies and may not be varied by agreement;
It is trite that payment of house allowance is a statutory requirement couched in mandatory terms.
we find that the claim for overtime pay while the appellant worked in shifts would be to seek unjust enrichment.
Gratuity as correctly enunciated by this Court in Bamburi Cement Ltd vs Farid Aboud Mohammed [2016] eKLR denotes a gratis payment by an employer in appreciation of service.
the prescribed remedies, including reinstatement are discretionary rather than mandatory remedies, to be granted on the basis of the peculiar facts of each case.
Issues in the judgment
#The house allowance computation is internally inconsistent: 15% of Kshs. 12,386.35 is Kshs. 1,857.95, yet the judgment states the entitlement as Kshs. 22,295.43 and then awards the Kshs. 1,401.86 claimed
The underpayment figure the court says it holds is contradicted by its statement upholding the trial court's finding
Leave pay figure appears as both Kshs. 8,670.40 and Kshs. 8,670.43 in the judgment
Typographical error in the public holidays holding
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Omwaya v Hygenic Butchery Trading Limited (Civil Appeal 21 of 2019) [2023] KECA 1165 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1165/eng@2023-10-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.