Kamau v Delta Point Distributors Limited t/a Milele Lounge (Appeal E045 of 2022) [2023] KEELRC 1161 (KLR)
The bottom line
#Kenyan employers who cannot produce a written employment contract automatically lose disputes about pay terms like leave and overtime.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether, where the employer fails to produce a written contract of service, the burden of proving or disproving an alleged term of employment lies on the employer
- 2.Whether the Appellant was entitled to unpaid annual leave, public holidays worked and not paid, unpaid overtime, unpaid rest days and house allowance
- 3.Whether the award of four months' salary as compensation for wrongful and unfair termination was inordinately low and made without applying the principles in Section 49 of the Employment Act
Key legal issues
#Burden of proof where no written contract of service is produced
Under Sections 9, 10(7) and 74 of the Employment Act, the responsibility for a written contract and employment records lies on the employer; failure to discharge this statutory burden results in a finding in favour of the employee alleging the terms under Section 10(1).
The court applied Sections 9, 10 and 74 of the Employment Act, which require employment contracts exceeding three months to be in writing and place the responsibility of keeping employment records on the employer. Section 10(7) shifts the burden of proving or disproving an alleged term of employment to the employer where no written contract is produced. Since the Respondent produced no contract or records rebutting the claims, the Trial Magistrate had no basis to dismiss those heads of claim.
Whether the compensation award of four months' salary was inordinately low
The award of four months' salary for unfair termination was reasonable given the Appellant's short service of two years, and the appellate court would not disturb it despite the absence of reasons from the Trial Court.
Although the Trial Court gave no reasons for the award, the first appellate court noted that the Appellant had worked for only two years and could not be said to have invested so much in the job that termination put him to greater disadvantage. The court borrowed the redundancy rule of 'last in, first out' to note the Appellant would have been among the first to be declared redundant, and therefore found the award reasonable.
Entitlement to unpaid leave, rest days, public holidays, overtime and house allowance
The Appellant's claims under these heads succeeded because the Respondent's witness did not rebut, directly or indirectly, the allegations concerning leave, rest days, public holidays, overtime and house allowance.
The court re-evaluated the evidence of the Respondent's only witness and found he largely addressed only the circumstances of termination, leaving the claims for leave, rest days, public holidays, overtime and house allowance unrebutted. Since the statutory record-keeping burden lay on the employer, the Trial Magistrate had no ground to refuse these prayers, and judgment was entered for the Appellant as computed in the statement of claim.
Legal principles established
#- Failure by an employer to discharge the statutory burden of producing a written contract or particulars leads to a finding in favour of an employee who alleges terms under Section 10(1)
- The role of a first appellate court is to re-evaluate, re-assess and re-analyze the evidence while bearing in mind that it did not hear the witnesses
Court orders
#- 1.The award of four months' salary as compensation for unfair termination is found reasonable and is not disturbed
- 2.The order of the Trial Court dismissing the heads of claim for leave, rest days, public holidays, overtime and house allowance is substituted with an order allowing and entering judgment for the same as computed under paragraph 16 of the statement of claim
- 3.Each party shall bear their own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Magistrates' Court (Employment and Labour Relations)
- Jurisdiction invoked
- First appellate jurisdiction over the judgment of the lower court (memorandum of appeal dated 7th April 2022)
Relief refused
#Enhancement of the compensation award for unfair termination beyond four months' salary
The Appellant had worked for only two years, so the award of four months' salary was reasonable in the circumstances
Costs
Each party shall 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.
The appeal being partially successful, each party shall bear their own costs.
It therefore follows that failure to discharge this statutory burden inevitably leads to a finding in favour of an employee who alleges that his or her contracts included the stipulation under Section 10(1).
The Court therefore finds the award of four months' salary as reasonable in the circumstances and will not disturb the same.
These grounds of appeal therefore are successful and the Court therefore substitutes the order of the Trial Court dismissing these heads of claim and hereby with an order allowing and entering judgment for the same as computed under paragraph 16 of the statement of claim.
Issues in the judgment
#The judgment states the Trial Court awarded four months' salary for unfair termination in the grounds of appeal, but the Respondent's submissions refer to an award of five months' salary
The court states the award was made without reasons yet proceeds to find it reasonable, and there is an internal inconsistency in the disposition paragraph ('substitutes the order ... dismissing these heads of claim and hereby with an order allowing')
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kamau v Delta Point Distributors Limited t/a Milele Lounge (Appeal E045 of 2022) [2023] KEELRC 1161 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1161/eng@2023-05-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.