Timothy Ikaale Kotol & 2 others v Mogotio Constituency Development Fund Committee & another [2020] KEELRC 610 (KLR)
The bottom line
#Kenyan workers kept on after a fixed-term contract ends gain full Employment Act protections, including the right to notice, reasons and a hearing before termination.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether there is unfair termination of employment
- 2.Whether there is non-payment of gratuity
- 3.Whether the remedies sought should issue
Key legal issues
#Whether there was unfair termination of employment
Yes - termination of the claimants' continued employment without notice, reasons or hearing was unfair under sections 41, 43 and 45 of the Employment Act
The claimants' fixed term contracts lapsed on 1st June 2011 and 28th February 2013, but they continued in service on a verbal contract, confirmed by the respondent's own meeting resolutions of 30th May 2014. Employees retained on verbal terms without defined conditions are protected under section 37 of the Act. Their employment was then terminated on 30th May 2014 without prior notice, valid reasons or a hearing, contrary to the mandatory provisions of sections 35, 41, 43 and 45 of the Employment Act.
Whether gratuity remained unpaid
The respondent resolved to pay gratuity at 31% of annual basic pay and paid it; any balances allegedly deposited through Skyline Sacco are to be confirmed by the claimants with the Sacco and reported to the court
The respondent's meeting of 30th May 2014 resolved, on the employees' request, to pay gratuity at 31% of annual basic pay for the completed fixed term contracts. The claimants confirmed receiving cheques of Ksh.60,000 and Ksh.54,000 respectively. The respondent produced evidence of a cheque dated 7th October 2014 cashed on 10th October 2014 depositing Ksh.52,840 and Ksh.47,680 into their Skyline Sacco accounts. Since the claimants had accounts with the Sacco but had never checked them, they were directed to confirm the deposits and report to court within 14 days.
What remedies should issue
Notice pay of one month under section 35, compensation of six months' gross wage for the 1st claimant and two months' for the 3rd claimant under section 49, and a certificate of service under section 51
Having found unfair termination, the court applied the statutory remedies. Notice pay of one month's pay was due under section 35 based on the last earned wages of Ksh.12,000 and Ksh.18,000. Compensation under section 49 was calibrated to the period each claimant served beyond the lapsed fixed term contracts under section 37 - six months' gross wage (Ksh.72,000) for the 1st claimant who served three years beyond, and two months' gross wage (Ksh.36,000) for the 3rd claimant who served one year beyond.
Legal principles established
#- Where a fixed term contract lapses but the employee continues in service on a verbal contract without defined terms, the employee is protected under section 37 of the Employment Act and enjoys the full statutory rights of an employee
- An employer must prove valid and fair reasons for termination and follow the mandatory notification and hearing process under section 41 of the Employment Act before terminating employment of a protected employee
Court orders
#- 1.Declaration that there was unfair termination of employment
- 2.1st claimant awarded notice pay Ksh.12,000 and compensation Ksh.72,000
- 3.3rd claimant awarded notice pay Ksh.18,000 and compensation Ksh.36,000
- 4.Claimants to be issued with a Certificate of Service pursuant to section 51 of the Employment Act
- 5.Claimants to report on their Skyline Sacco statement for the year 2014 within 14 days
- 6.Claimants awarded costs of the suit
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution over employment and labour relations disputes
Relief refused
#Gratuity at 31% of annual basic pay for each year worked
The court found gratuity was resolved by the respondent on 30th May 2014 and largely paid; balances allegedly paid through Skyline Sacco to be confirmed by the claimants
Gratuity amounts claimed of Ksh.44,640 for the 1st claimant and Ksh.212,040 for the 3rd claimant
The respondent's evidence of payment by cheques of Ksh.60,000/Ksh.54,000 and the lump sum deposit of Ksh.206,820 was accepted subject to confirmation
Costs
The claimants are awarded costs of the suit.
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, judgement is hereby entered for the claimant against the respondent in the following terms;
(2) The claimants shall be issued with a Certificate of Service pursuant to section 51 of the Act;
(3) The claimants shall report on their Skyline Sacco statement for the year 2014 within 14 days;
(4) The claimants are awarded costs of the suit.
Employment on a fixed term contract hence starts and ends on its terms. Such is lawful and valid.
Section 8 of the Act allow parties in an employment relationship to be bound by a verbal contract subject to the provisions of section 10 of the Act which requires that such verbal contract should be reduced in writing within two months of service.
to retain them on causal terms and verbal contract without any defined terms and conditions of service, these claimants being in the service of the respondents became protected under the provisions of section 37 of the Act.
A mandatory and elaborate process is then set up under section 41 requiring notification and hearing before termination of employment.
Issues in the judgment
#The judgment records the lump-sum cheque as Ksh.206,820 in some passages and as Ksh.260,840 in the defence witness's testimony; the individual allocations also differ between the resolution (Ksh.112,840 and Ksh.101,680) and the analysis (Ksh.52,840 and Ksh.47,680).
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Timothy Ikaale Kotol & 2 others v Mogotio Constituency Development Fund Committee & another [2020] KEELRC 610 (KLR)", Case Analysis (2020). Cause No. 753 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/610/eng@2020-07-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.