Mwakela v Krystalline Salt Ltd (Cause 116 of 2014) [2014] KEIC 95 (KLR)
The bottom line
#A Kenyan court ruled 68 piece-rate salt workers were real employees, awarding them pay for unfair, unprocedural 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 the claimants were employed on regular contract of service or contract for services
- 2.Whether the claimants deserted work voluntarily or they were unlawfully declared redundant
- 3.Whether the claimants are entitled to the reliefs sought in the suits consolidated herein
Key legal issues
#Whether piece-rate packers were employees under a contract of service or independent contractors under a contract for services
The claimants were employees engaged under a contract of service, not independent contractors
The court applied the control test: the respondent recruited, trained, clothed, supervised, supplied machines to and paid the claimants. The claimants had no freedom to work elsewhere and faced discipline for lateness or absenteeism, which is inconsistent with independent contracting. The court was persuaded by Indian precedents holding that piece-rate status does not remove a worker from the category of 'worker'.
Whether the claimants deserted employment or were unfairly terminated through an unlawful redundancy
The claimants did not desert work; they were unfairly terminated through an unlawful summary redundancy
The packaging work and machinery were relocated to Malindi, rendering the claimants' services superfluous. Under Section 40 of the Employment Act the respondent was bound to serve one month's written notice, notify the labour officer and conduct fair selection before declaring redundancy. Failure to follow that mandatory procedure rendered the termination unfair under Section 45.
Entitlement to notice pay and leave dues, and the effect of limitation
Each claimant was awarded one month's salary in lieu of notice plus leave pay, with leave confined to the 3 years immediately preceding the suits
Under Sections 35(1)(c) and 37 of the Employment Act, employees working for over a month become entitled to 28 days' written notice before termination. The claimants were also entitled to 21 leave days per year of consecutive service, but leave earned before May 2011 was lost to limitation. Awards were computed on the minimum statutory wage for a machine attendant (Ksh.467.20 per day) as at 30/3/2013.
Legal principles established
#- A piece-rate worker is not necessarily an independent contractor; the true test is whether the employer exercised control over the worker, including recruitment, training, supervision, discipline and exclusivity of the workplace
- A redundancy carried out without following the mandatory procedure under Section 40 of the Employment Act amounts to unfair termination under Section 45
- Piece-rate pay is merely a formula for calculating wages and does not of itself render a worker an independent contractor
Court orders
#- 1.Declaration that the claimants were employed under a contract of service (permanent basis) for the respective periods they worked for the respondent
- 2.Declaration that the termination of the claimants' employment on 30/3/2013 was wrongful and unfair
- 3.Judgment entered for each of the 68 claimants in the aggregate sum of Ksh.2,219,191.77, apportioned per claimant as per the schedule (salary in lieu of notice plus leave pay within limitation period)
- 4.Costs of the suit to the claimants
- 5.Interest on the awarded sums
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original jurisdiction of the Industrial Court over employment and labour relations disputes (Employment Act and the Industrial Court's jurisdiction over claims for termination dues)
- Consolidated with
- ICC No. 117 of 2014 – ICC No. 162 of 2014, ICC No. 175 of 2014 – ICC No. 195 of 2014
Relief refused
#Severance pay for redundancy
The court found the claimants were not lawfully declared redundant but unfairly dismissed, and compensation of up to 12 months' gross salary for unfair termination was not pleaded
Claim for underpayment
Dismissed for want of particulars and evidence
Costs
The claimants will also have costs and interests (costs and interest awarded to the claimants).
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.
This court remains persuaded by the said Indian precedents and proceeds to find that the claimant herein and all the other claimants whose suits have been consolidated herewith were employed by the respondent under a contract of service on diverse dates between 2008 and 30/3/2013.
The alleged piece-rate pay was in this court's view a formula of calculating the claimants wages intended to motivate high yield but that did not in any way render them independent contractors.
It is now settled in our emerging jurisprudence that when redundancy is done without following the mandatory procedure provided under Section 40 supra, the same is deemed to amount to unfair termination within the meaning of Section 45 of the Employment Act.
For the reasons aforestated, judgment is entered for each of the 68 claimants whose suits are herein consolidated in the aggregate sum of ksh.2,219,191.77 to be shared as indicated above.
The claimants will also have costs and interests.
Issues in the judgment
#Internal inconsistency in the schedule: paragraph 36 awards Ksh.20,421.03 for 63 leave days, while the schedule shows totals of 34,437.05/34,347.05 for the same cadre, and the aggregate (Ksh.2,219,191.77) does not arithmetically match the individual awards listed
Inconsistent case-number references: the judgment refers to CW2 Gladys Kaari as claimant in 'ICC 195 of 2014' and CW3 Nicholas Muthini as claimant in 'ICC No. 152 of 2014', but the schedule lists Nicholas Muthui at 152/14 and Gladys Kaari at 195/14 with differing award figures (34,347.05 vs 34,346.05) for identical service periods
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwakela v Krystalline Salt Ltd (Cause 116 of 2014) [2014] KEIC 95 (KLR)", Case Analysis (2014). ICC No. 116 of 2014 (consolidated with ICC Nos. 117–162/2014 and 175–195 of 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2014/95/eng@2014-12-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.