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ELRCPartially AllowedMombasa CMELRC E109 of 2023· [2025] KEELRC 177 (KLR)

Kitui Flour Mills Limited v Mbai (Appeal E172 of 2024) [2025] KEELRC 177 (KLR)

Employment and Labour Relations Court
30 January 2025
2,410 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Mombasa appeal court cut a labourer's compensation from 12 months' pay to one, but confirmed long-serving casual workers get full employment protection in Kenya.

What this practically means

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Executive summary

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This is a first appeal against the judgment of the trial magistrate delivered on 25 July 2024 in Mombasa CMELRC E109 of 2023, in which the respondent, a general labourer engaged on a daily wage from 1 April 2017, was found to have been unfairly terminated after refusing to execute a term contract offered by the appellant. The trial court had awarded underpayments of Ksh.19,440, leave pay of Ksh.15,435, 12 months' compensation of Ksh.264,600, and a certificate of service. The appellant contested the application of Section 37 of the Employment Act, the shifting of the burden of proof, and the quantum of the awards. On appeal, the court re-assessed the evidence, held that the respondent's engagement was continuous and thus protected under Section 37, but that the appellant's issuance of a written term contract was a lawful and statutory requirement; the appellant's lapse was only in failing to issue notice when the respondent declined to sign. The court upheld the notice pay award, reduced compensation from 12 months to one month (Ksh.22,050), awarded leave pay of Ksh.24,255 for 33 days, found no underpayment proved for the limitation-compliant period (payments after January 2022 exceeded the legal minimum), and rejected the wage-arrears claims for 18 and 19 November 2022 as proved paid. The judgment was varied accordingly, with trial court costs sustained and each party bearing its own costs of the appeal.

Key legal issues

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01

Conversion of casual employment under Section 37 of the Employment Act

Holding

The respondent was engaged continuously on work not ending each day; he was entitled to the protection of Section 37, and the employer should have issued notice rather than simply offering a term contract.

Reasoning

The court read Section 37 in full, holding it protects an employee whose work cannot reasonably be expected to be completed within three months or more. Payment records and the parties' evidence confirmed continuous daily engagement. The employer's statutory duty under Sections 10(1) and (3) to issue a written contract was lawful, but where the employee refused, the employer should have issued notice to terminate the continuous engagement.

p. 4
02

Assessment of compensation for unfair termination

Holding

Maximum 12 months' compensation was without reasonable basis; one month's compensation was sufficient given the parties' conduct.

Reasoning

Under Section 45(5)(2), the court must consider the parties' conduct. The appellant made great effort to regularise the employment by issuing a term contract, which was a legal requirement, while the respondent declined to execute it. This conduct justified reducing the award from 12 months to one month's pay.

p. 4
03

Limitation on underpayment claims

Holding

Claims for underpayment can only go back 12 months from cessation; no underpayment was proved for the recoverable period.

Reasoning

The court held underpayment is a continuing injury that occurs daily or monthly and must be addressed within 12 months from cessation, per Ol Pejeta, G4S and German School Society. The claim covering May 2018 to April 2022 was filed on 27 January 2023, so only claims from January 2022 were recoverable; the record showed payment of Ksh.655 against a minimum of Ksh.653.10.

p. 5
04

Accumulation of annual leave

Holding

The respondent was entitled to leave for the protected period but leave could not accumulate beyond 18 months; he was awarded 33 leave days at Ksh.24,255.

Reasoning

Under Section 28(4), annual leave cannot accumulate for more than 18 months. The appellant failed to allocate leave on the mistaken belief that the respondent was a casual. The respondent was therefore entitled only to 33 leave days computed on the last wage of Ksh.735.

p. 5

Legal principles established

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  • An employer who wishes to end continuous casual engagement where the employee refuses to execute a written term contract must issue notice of termination; abandoning the employee otherwise results in unfair termination
  • Underpayment of wages is a continuing injury which must be addressed within 12 months from the date of cessation
  • Annual leave protected under Section 37 cannot accumulate beyond 18 months under Section 28(4)

Court orders

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  1. 1.Judgment in Mombasa CMLECR E019 of 2023 varied
  2. 2.Compensation Ksh.22,050 (reduced from 12 months' compensation of Ksh.264,600)
  3. 3.Notice pay Ksh.22,050
  4. 4.Annual leave Ksh.24,255
  5. 5.Certificate of service
  6. 6.Costs of proceedings before the trial court as awarded; each party bears its own costs of the appeal
On appeal from
Magistrates' Court (ELRC), Mombasa
Mombasa CMELRC E109 of 2023 (also referred to as CMLECR E019 of 2023 in the disposition)
Jurisdiction invoked
First appeal from the trial court (Employment and Labour Relations Court appellate jurisdiction over appeals from the magistracy in employment matters)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kitui Flour Mills Limited v Mbai (Appeal E172 of 2024) [2025] KEELRC 177 (KLR)", Case Analysis (2025). Mombasa CMELRC E109 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/177/eng@2025-01-30

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.