Servicehub Global Enterprise Limited v Nkumu (Appeal E122 of 2024) [2024] KEELRC 915 (KLR)
The bottom line
#A Kenyan employer lost its appeal because it gave a cleaner no written contract and could not justify her dismissal, though her compensation was reduced.
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 was an employment relationship
- 2.Whether there was termination of employment and if so, whether this was unfair
- 3.Whether the awards are justified
Key legal issues
#Existence of employment relationship
An employment relationship existed between the parties
The appellant's own witness, Gregory Nyongesa, admitted recruiting the respondent as a cleaner at the SGR Mombasa terminal, albeit by word of mouth with no written contract. Verbal employment is lawful, but for continuous employment Sections 9 and 10 require a written contract; failing that, the court believes the employee whose rights are unsecured. The magistrate's finding could not be faulted.
Unfair termination and burden of proof
Termination was unfair because the employer failed to justify it
Under Section 47(5) the employee must establish prima facie evidence of unfair termination; the burden then shifts to the employer under Section 43 to justify the grounds. The employer offered only a flat denial based on absence of a written contract and failed to produce work records it was obliged to keep under Sections 10(6) and 10(7). The termination was therefore presumed unlawful.
Underpayment claim
Underpayment established against the applicable Wage Orders
The respondent earned Ksh.12,300 against the Mombasa minimum wage of Ksh.13,572.90 plus 15% house allowance until 30 April 2022, and Ksh.15,201.65 plus allowance thereafter. The total underpayment was recomputed at Ksh.73,108.75, the magistrate having assigned a lower basic wage through oversight.
Twelve months' compensation
Maximum compensation unjustified; reduced to two months' gross pay
Following Ol Pejeta Ranching and Kenfreight, the maximum award under Section 49 requires reasoned justification. The magistrate gave none, and the respondent had worked under two years with underpayments separately compensated. Two months' compensation at Ksh.17,481.82 was found appropriate, totalling Ksh.34,963.64.
Service pay
Service pay not due where statutory NSSF deductions were remitted
Under Sections 35(5) and (6) service pay is excluded where the employer remits statutory dues. The appellant confirmed NSSF remittance; any non-remittance for particular periods should be reported to the Labour Officer and NSSF for sanctions, not claimed as service pay.
Legal principles established
#- Verbal employment is lawful but for continuous employment the employer bears the legal burden to issue a written contract under Sections 9 and 10 of the Employment Act, and where claims arise the court is inclined to believe the employee without written protection
- Under Sections 43 and 47(5) of the Employment Act, once the employee adduces prima facie evidence of unfair termination, the burden shifts to the employer to justify the termination
- The maximum award of 12 months' compensation for unfair termination must be justified with reasons; absent justification an appellate court will interfere
Court orders
#- 1.Appeal found without merit save that the trial court's orders are reviewed: compensation reduced to Ksh.34,963.64
- 2.Notice pay set at Ksh.17,481.82
- 3.Underpayments awarded at Ksh.73,108.75
- 4.Accrued leave awarded at Ksh.16,721.80
- 5.Costs for proceedings in the lower court awarded to the respondent without interests
- 6.Service pay award set aside
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Magistrates' Court (CMELRC), Mombasa
- CMELRC No. E131 of 2023
- Jurisdiction invoked
- First appeal under the Employment and Labour Relations Court's appellate jurisdiction from the Magistrates' Court (CMELRC)
Relief refused
#Appeal against finding of employment relationship and unfair termination
Employment relationship established by appellant's own witness's admission; burden shifted to employer to justify termination
Service pay award
NSSF dues were confirmed remitted, satisfying Section 35(5) and (6) of the Employment Act
Costs of the appeal
Appeal largely without merit; only lower court costs allowed, without interests
Costs
Costs for proceedings in the lower court awarded to the respondent without interests; no costs of the appeal awarded.
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 is hereby found without merits save the orders by the learned Magistrate in Mombasa CMELRC No.131 of 2023 are hereby reviewed in the following terms;
Under the Act, verbal employment is lawful and legitimate. An employer is allowed to engage an employee verbally but where such employment is continuous and not likely to end within a day, the employer has the legal burden to issue a written contract in terms of Sections 9 and 10 of the Act.
The burden of proof shifted onto the appellant to justify the termination of employment.
even where the court has the discretion to make an award of up to 12 months compensation, such discretion should be applied judicially and justified with cogent reasons.
A certificate of service is a legal right at the end of employment under Section 51 of the Act. This should be issued.
Issues in the judgment
#Memorandum of Appeal repeatedly refers to the claimant as 'he/his' although the claimant is the female respondent
Internal inconsistency in dates: the Memorandum of Claim pleaded employment from 21st August 2021, but the judgment elsewhere records the underpayment claim from September 2021 and the respondent's evidence alleged employment from October 2014, contrary to the appellant's CR12 registration date of 8 July 2020
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Servicehub Global Enterprise Limited v Nkumu (Appeal E122 of 2024) [2024] KEELRC 915 (KLR)", Case Analysis (2024). ELRC Appeal from Mombasa CMELRC No. E131 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/915/eng@2024-04-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.