Kenya Engineering Workers’ Union v Kaluworks Ltd (Cause 112 of 1999) (Employment and Labour) [2003] KEIC 31 (KLR)
The bottom line
#Workers paid daily but employed continuously for over three months are permanent employees in Kenya, and employers must follow legal redundancy procedures before laying them off.
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 grievants were casual employees, and
- 2.if not, whether they are entitled to the reliefs prayed for by the Union
Key legal issues
#Whether the 72 grievants were casual employees or permanent employees
They were permanent employees in continuous service, deemed confirmed under Clause 19 of the collective agreement, and their lay-off was an unlawful redundancy.
Under section 2 of the Employment Act a casual employee is paid at the end of each day and engaged for not more than 24 hours. The grievants worked continuously for periods of one to eight years, an assertion the Company did not specifically deny, and the Company never stated their daily wages. Clause 19 of the collective agreement deems casuals who complete three continuous months permanent. The Minister's findings showed the Company had promised reinstatement and re-employed 13 of them, demonstrating they had been declared redundant rather than casually engaged.
Whether the redundancy procedure was lawful
The reorganisation was bona fide but the Company failed to follow the procedure laid down in sections 71 and 72 of the Finance Act, 1994 (sections 4 and 16A of the Employment Act), rendering the redundancy unlawful.
The court accepts that the decision whether redundancy is necessary is purely an administrative matter for management and will not be interfered with if honestly made and free of bad faith, discrimination or victimisation. However, the law prescribes mandatory conditions: notification of the union and labour officer, regard to seniority, skill, ability and reliability, payment of leave, one month's notice and severance pay of not less than 15 days per completed year. The Company did not adhere to this procedure.
Legal principles established
#- An employee paid daily but working continuously for more than three months is deemed a permanent employee under the parties' collective agreement and cannot be treated as a casual.
- The management has a conditional power to declare redundancy for bona fide reorganisation, which the court will not interfere with unless vitiated by bad faith, but the statutory redundancy procedure must be adhered to.
- Redundancy termination is valid only if the conditions in section 16A of the Employment Act (notification of union and labour officer, seniority, notice and severance pay of not less than 15 days per completed year) are complied with.
- Continuous employment is uninterrupted service, tolerating interruptions such as sickness, authorised leave, accident, lawful strike, lock-out or cessation of work not due to the employee's fault.
Court orders
#- 1.The grievants declared redundant be paid their redundancy benefits in accordance with Clause 24(f) of the parties' collective agreement (including one month's notice or pay in lieu for employees with up to 10 years continuous service, payment of wages, overtime and other remuneration due up to cessation of employment, pro-rata leave, and provident fund or gratuity benefit whichever is more advantageous)
- 2.The grievants who were re-employed are not subject of this dispute and are not entitled to any relief
- 3.The management of the Company to calculate the amounts due to the redundant grievants and deposit the same with the Labour Officer, Industrial Area Labour Office, to the credit of the grievants within thirty (30) days from the date of the award
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Trade Disputes Act, Cap. 234 - dispute reported under Section 4 and notified under Section 14(7) and (9)(e) and (f) with statutory certificate of the Labour Commissioner and Minister for Labour
Relief refused
#Relief in respect of grievants who were re-employed (including 12 months' compensation and other heads prayed for by the Union)
The re-employed grievants are not the subject of the dispute and are not entitled to relief; the redundancy itself was bona fide reorganisation, only the statutory/collective agreement procedure was not followed
Costs
No costs order made in the award
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.
In the circumstance, I allow the demand by the Union and award and order as follows:
The management of the Company is directed to calculate the amounts due to the grievants, who were declared redundant, and deposit the same with the Labour Oficer, Industrial Area Labour Ofice, to the credit of the grievants within thirty (30) days from this date.
I have, therefore, no doubt in my mind that the grievants were in continuous service or employment for the said periods, that they were permanent employees in the service of the Company and that they were unlawfully declared redundant.
A casual employee who has completed 3 months continuous working months with the employer shall be confirmed into permanent employment
there is conditional, more or less absolute, power in the management of the industry or concern to undertake bona fide reorganization or restructuring of its operations on the grounds of economy and to determine the size of its workforce; and the Court cannot sit in judgment when it is honestly arrived at and is not vitiated by bad faith, discrimination or victimization.
an employee declared redundant shall be entitled to severance pay at the rate of not less than 15 days for each completed year of service as severance pay.
Issues in the judgment
#The list of 72 grievants contains duplicated and inconsistent numbering: names such as Kennedy Kaesa (Nos. 16 and 67), Jackson Kingoo (Nos. 17 and 34) and Josphat/Jackton Odhiambo appear twice, and numbering jumps from 60 to 67.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Engineering Workers’ Union v Kaluworks Ltd (Cause 112 of 1999) (Employment and Labour) [2003] KEIC 31 (KLR)", Case Analysis (2003). Cause 112 of 1999. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2003/31/eng@2003-04-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.