https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2321

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT** **APPEALS DIVISION** **APPEAL NO. E118 OF 2025** BETWEEN DEEPS COMPANY LIMITED ……………...…………………..APPELLANT AND PATRICK MUSEMBI KIVUVA …..................……………. RESPONDENT (Being an appeal arising from the Judgment of Honourable P.A Olengo(SPM) delivered in Nairobi MC. ELRC No. E632 of 2022 on 19th March, 2025.)) JUDGMENT *(Before Hon. Justice Abuodha Jorum Nelson)* 1. Through the Memorandum of Appeal dated 24th April 2025, the Appellant appeals against the whole Judgment of Honourable Magistrate P.A Olengo delivered on 19th March,2025 on grounds among others that:- 1. THAT the Honourable Senior Principal Magistrate erred in law by failing to hold that contrary to Order 5 Rule 1(5) of the Civil Procedure Rules the statement of claim was filed without summons to enter Appearance and therefore this suit is null and void *ab initio* 2. THAT the Honourable Senior Principal Magistrate erred in law by failing to hold that under Rule 11 of the Employment and Labour Relations Court (Procedure) Rules (Repealed on 16th August, 2024) the suit was filed without summons and therefore this suit was/ is null and void *ab initio.* 3. THAT the Honourable Senior Principal Magistrate erred in law by failing to hold that this suit was filed on or about 7th April, 2022 and the pleadings were not served within 14 days from the date of filling contrary to Rule 11 of the Employment and Labour Relations Court (Procedure) Rules (now Repealed) and is therefore invalid, null and void *ab initio.* 4. THAT the Honourable Senior Principal Magistrate erred in law by failing to hold that as a casual employee his employment was terminable without notice under section 35(1) (a) of the Employment Act. 5. THAT the Honourable Senior Principal Magistrate erred in holding that the respondent/claimant worked for a continuous period of not less one month and was therefore deemed a permanent employee by dint of section 37 of the Employment Act. 6. THAT the Honourable Senior Principal Magistrate erred in holding that the respondent/claimant termination was unfair 7. THAT the Honourable Senior Principal Magistrate erred in awarding the respondent/claimant Kshs 15,383.45/= as one (1) month’s salary in lieu of notice. 8. THAT the Honourable Senior Principal Magistrate erred in awarding the respondent/claimant Kshs 332,282.52/= as house allowance without any basis. 2. The Appellant prayed for an order that the Claim/ suit be dismissed with costs. 3. The Respondent on the other hand being dissatisfied with the above judgment filed a Memorandum of Cross Appeal dated 10th June, 2025 on among other grounds that the trial court erred in not awarding compensation for unfair termination despite finding that the termination was unfair even if it was not specifically pleaded. 4. The Respondent prayed that the cross appeal be allowed with costs and part of Hon. P.A Olengo(SPM) judgment delivered on 19th March, 2025 be substituted with a further award of maximum compensation for unlawful termination. 5. The Appeal and the Cross Appeal were disposed of by written submissions. **APPELLANT’S SUBMISSIONS** 1. The Appellant’s Advocates Achola Jaoko & Co. Advocates filed written submissions dated 24th November 2025 and on the issue of whether the statement of claim was filed without summons to enter appearance hence rendered the claim invalid, null and void as failure to serve the claim within 14 days from the date of filling as per Rule 11 of the employment and Labour Relations Court Procedure Rules counsel relied on Rule 11 above to submit that the same was equivalent of Order 5 Rule(5) of the Civil Procedure Rules and that the Respondent failed to comply with the said provisions which are mandatory, submitted that the suit filed on 7th April, 2022 was fatally defective, invalid, null and void *ab initio* and placed reliance on the case of **Pius Kimaiyo Langat vs The Cooperative Bank of Kenya Ltd Cause 48 of 2015** where it was stated that rule 11(3) provided that summons would be valid for 6 months hence the summons issued on 7th March, 2024, two years later were manifestly invalid and rendered the entire suit null and void. 2. It was submitted that the Respondent challenged the validity of the suit in its statement of defence dated 7th March, 2024 and the Memorandum of appearance, the statement of defence and participation in the proceedings did not validate the fatally defective suit. 3. On the issue of whether the Respondent’s employment was terminated without notice under section 35(10 (a) of the Employment Act and whether the termination was unfair counsel submitted that the Appellant was justified in terminating the Respondent without notice or payment in lieu of notice as he was a casual labourer. Counsel relied on section 35(6) of the Employment Act to submit that the Respondent was not entitled to service pay/ severance pay/gratuity because he was a member of NSSF and he benefitted from Appellant’s monthly contributions remitted as and when the Respondent service was engaged on a casual worker basis. 4. On the issue of whether the Respondent was a permanent employee by dint of section 37 of the Employment Act counsel submitted that the Appellant adduced cogent evidence that the Respondent was employed to work intermittently and not continuously and the interval period did not add up to the timelines stipulated in section 37 of the Employment Act. That the Respondent failed to establish the claim of conversion of casual employment to permanent employment under section 37 of the Employment Act. 5. On the issue of whether the claims of Kshs 15,383.45/= as notice pay and Kshs 332,282.52/= as house allowance were merited counsel submitted that after the Respondent failed to establish the claim for conversion of casual employment to permanent employment the award of notice pay was not justified. That the Respondent did not adduce evidence to justify the award of house allowance as it was only permanent employees who were entitled to the same under section 31(1) of the Employment Act. 6. On the issue of whether the Cross Appeal was filed within the stipulated statutory period of 30 days under section 79G of the Civil Procedure Act counsel submitted that the cross appeal was dated and filed on 10th June, 2025 contrary to the above section without leave of the court for filling out of time or to extend the period stipulated by statute. That the cross appeal was fatally defective. 7. On the issue of whether the cross appeal merits an award for compensation under section 49(1) (c) of the Employment Act counsel submitted that the Respondent being a casual employee did not merit the remedy stipulated under the above provision. That the remedy was not pleaded in the claim and it was trite law that parties were bound by their pleadings. That the court has no jurisdiction to award a remedy which was not pleaded in the claim. **RESPONDENT’S SUBMISSIONS** 1. The Respondent’s Advocates E.K Mutua & Co. Advocates filed its submissions dated 3rd February, 2026 and on grounds 1, 2 and 3 whether the suit was filed without summons to enter appearance counsel submitted that the issues raised in the three grounds were non-starters. First, the Employment and Labour Relations Court (Procedure) Rules 2016 (Repealed) were inapplicable in the lower court suit as Rule 2 defined 'Court' as: The Employment and Labour Relations Court and includes a judge of the Court. 2. That the applicable law at the time of filing the lower court suit was the Civil Procedure Rules, 2010 and in particular Order 5 Rule 1 (5) and in compliance with the above provision, the Respondent duly filed the Summons to Enter Appearance together with the Statement of Claim on 31st March 2022 and this is ascertainable from the E-Filing/CTS system. Additionally, the Summons to Enter Appearance were duly extracted on 27th February 2024, and served upon the Appellant on 29th February 2024. At the time of service, the Summons to Enter Appearance were valid and therefore service of the pleadings and Summons could not be said to be invalid, null or void ab initio. 3. Counsel submitted that whereas the issue of service of the Summons to Enter Appearance 2 years after filing of the suit had been raised in the Appellant's submissions, this did not invalidate the validity of the Summons. Reliance was placed on the case of **Tejprakasha Shem v Petroafric Company Ltd & 2 others [2014] KEHC 4310 (KLR)** where the effect of late issuance of Summons to Enter Appearance was considered and counsel submitted that grounds 1, 2 and 3 were unfounded and without merit. 4. On grounds 4 and 5 on whether the Respondent was a casual employee or not counsel highlighted the brief facts of the case that the Respondent was employed by the Appellant in January 2008 earning a monthly salary of Kshs. 15,383.45/- until his termination on 21st March 2021- a period of more than 13 years. That as of 11th December 2019, the Respondent had accumulated 230 leave days and was paid by the Appellant the sum of Kshs 9,425/- as a lump sum payment for leave pay. That the Appellant remitted NSSF deductions in respect of the Respondent. 5. It was submitted that from the foregoing, the Respondent was a permanent employee who earned a monthly salary, was entitled to leave days and was eligible for NSSF statutory deductions. That the Respondent having worked for a continuous period of around 13 years, was a permanent employee by dint of Section 37 of the Employment Act. Reliance was placed in the cases of **Malivi v Mini Bakers Limited [2025] KEELRC 526 (KLR)** and **Silas Mutwiri v Haggai Multi-Cargo Handling Services Limited [2013] KEELRC 939 (KLR)** where this court was faced with similar facts and the import of Section 37 of the Employment Act was expounded on conversion of casual employee to permanent employee under this section. 6. It was submitted that the Appellant failed to discharge the burden of proof envisaged under Section 10 (7) of the Employment Act and the witness's testimony was to the effect that the witness could not tell when the Respondent was employed and how much he was paid despite stating they had records for all workers. Reliance was placed on the case of **Jackson Muiruri Wathigo t/a Murtown Supermarket v Lilian Mutune [2021] KECA 388 (KLR**) where the Court of Appeal emphasized on this duty under section 10(7) of the Employment Act. 7. Counsel submitted that from the foregoing the Respondent worked for a continuous period of more than one month in order to accumulate 230 leave days. The only inference from this was that the leave days were earned in the previous years since each year would attract at least 21 days leave days/pay in lieu. That going by basic calculations, this would mean that as of 11th December 2019 the Respondent had worked for at least 11 years. This was a clear admission that the Respondent worked for more than one day (24 hours) and could not have been paid per day. 8. On ground 6: Whether termination of the Respondent's employment was unlawful/ unfair counsel reiterated that the Respondent was a permanent employee of the Appellant and the termination of his employment ought to have been in accordance with Section 35 of the Employment Act. Counsel relied on section 45 of the Employment Act on what amounts to unfair termination. 9. Counsel submitted that the Respondent satisfied his burden that an unfair termination of his employment occurred since he was not given any reasons in writing for his termination, one-month notice or notice pay in lieu was also not given, a certificate of service was also issued not and he was not paid his terminal dues. That the Appellant's justification for not doing all these was that the Respondent was a casual employee, which position was not correct from the foregoing submissions. The trial court was therefore apt in finding that the Respondent's termination was unfair and unlawful. 10. On ground 7 and 8: Whether the Respondent was entitled to terminal benefits counsel submitted that the Respondent was awarded Kshs. 15,383.45/-as one month's salary in lieu of notice and Kshs. 332,282.52/- as house allowance arrears. That the trial court was correct in granting the said awards. That the Appellant admitted that it did not issue the Respondent with a termination notice on the basis that he was a casual employee. As regards the house allowance arrears, no evidence was adduced by the Appellant to prove that the same was paid over the period of 13 years that the Respondent worked under the company. 11. It was submitted that as correctly observed by the trial court- "The Respondent said the daily wage included house allowance. He didn't prove that by producing documents such as payslip. It was upon the Respondent to do so." 12. Counsel relied on Section 112 of the Evidence Act and the case of **Kenya Akiba** **Micro Financing Limited v Ezekiel Chebii & 14 Others [2012] KEHC 5590 (KLR**) to submit that the Appellant had a duty to produce the documents in its possession to prove the claims. 13. On the memorandum of cross appeal counsel submitted that the only issue for determination was whether the Respondent was entitled to general damages for unfair termination and if so, how much. Counsel first addressed the issue raised by the Appellant of the validity of the cross appeal. That the Memorandum of Appeal was dated 24th April 2025, the same was only served upon the Respondent on 26th May 2025 as an annexure in support of the Application dated 14th May 2025, seeking orders of stay of execution pending appeal. Counsel relied on Rule 17 of the Employment and Labour Relations Court (Procedure) Rules, 2024 which provided that a cross appeal shall be filed and served within twenty-one days from the date of service of the memorandum of appeal. 14. It was submitted that in this case, the Cross Appeal was filed approximately 15 days after service of the Memorandum of Appeal and therefore, no leave of court was required to admit the same out of time. On the merits of the cross-appeal counsel submitted that general damages for unfair termination of employment were not specifically pleaded under paragraph 22 of the Statement of Claim and that they fell under prayer (f) of paragraph 22 which was for "any other relief as this Court may deem fit". 15. Counsel relied on the case of **Ambogo v Sameer Agriculture and Livestock (Kenya) Limited [2023] KEELRC2257 (KLR)** where the Claimant had not pleaded for compensation for unfair termination, the court awarded the same under the prayer for 'any other relief the court may deem fit. Counsel also relied on the case of **James Chege & 6 others v Aqua Plumbing Company Limited [2013] KEELRC 622 (KLR)** where it was held that Compensation for unfair termination was a statutory remedy. It is one of the primary remedies for unfair termination provided by the statute at section 49 (1) (c) of the Employment Act. The same should be awarded even if not pleaded once the court finds the termination was unfair. 16. It was submitted that in determining the award of compensation, this court should consider the factors set out under Section 49 (4) of the Employment Act. That the Respondent, having faithfully worked for more than 13 years for the Appellant without any disciplinary issues and in consideration of the manner in which his employment was terminated, was entitled to compensation of 12 months' salary. Counsel relied on the case of **Anthony Yamo lhito v Basco Products (Kenya) Limited [2022] KEELRC 585 (KLR**) where the Claimant therein had served for a period of 12 years in employment and the Court awarded the maximum compensation of 12 months' salary for unfair termination. **DETERMINATION** 1. The court has considered the appeal and the cross appeal herein with the grounds raised, submissions filed by the parties herein and authorities relied and would like to observe that it is now settled law that the duty of the first appellate court is to re-evaluate the evidence in the subordinate court both on points of law and facts and come up with its own findings and conclusions as held in **Court of Appeal for East Africa in Peters –vs- Sunday Post Limited [1958] EA 424**. The appropriate standard of review established in cases of appeal can be stated in three complementary principles: i. **First, on first appeal, the Court is under a duty to reconsider and re-evaluate the evidence on record and draw its own conclusions;** **ii. In reconsidering and re-evaluating the evidence, the first appellate court must bear in mind and give due allowance to the fact that the trial court had the advantage of seeing and hearing the witnesses testify before her; and** **iii. It is not open to the first appellate court to review the findings of a trial court simply because it would have reached different results if it were hearing the matter for the first time.** 1. The Judgment of the trial court was that judgment was entered in favour of the Respondent against the Appellant in terms of Notice pay of Kshs 15,383.45/ and house allowance of Kshs 332,282.52/. 2. From the Memorandum of appeal which raised 8 grounds, the cross appeal which raised two grounds the evidence on record and the submissions on record the court takes the view that the germane issues for determination in this appeal are – 3. Whether the Claim was invalid because the summons to enter appearance were served after around two years after filing of the claim. 4. Whether the trial court erred by finding that the Respondent was a term employee by dint of section 37 of the Employment Act 5. Whether the trial magistrate erred in finding that the Respondent was unlawfully terminated. 6. Whether the trial court erred in awarding the reliefs awarded to the Respondent. 7. Whether the trial court erred by not awarding damages for unfair termination. **Whether the Claim was invalid because the summons to enter appearance were served after around two years after filing of the claim**. 1. The court before dealing with this issue wishes to address the issue raised by the Appellant that the cross appeal was filed outside the time limitations given. The Employment and Labour Relations Court Procedure Rules of 2024 provides that a cross Appeal would be filed 21 days after service of Memorandum of Appeal under Rule 17(2). The Appellant served the Respondent on 26th May, 2025 through its application seeking stay of execution and the Respondent filed the cross appeal on 10th June ,2025 which was within 21 days. This ground therefore fails as the cross appeal was filed within time. 2. On the issue of summons to enter Appearance the court is guided by the Employment and Labour Relations Procedure Rules 2016 under Rule 11 which was a replica of Order 5 Rule 1(5). In this case the claim was filed in 7th April, 2022 and the summons were extracted on 27th February, 2024 which was around two years after the claim was filed. The Appellant alleges that this invalidated the claim. 3. The court notes that Rule 11(3) of the said rules provide that the Summons would be valid for six months and the Respondent served the Appellant on 29th February, 2024 which was within the time the summons were valid even if there was delay in extracting the summons the same were filed together with the Claim as demonstrated by the Respondent. The Court of Appeal in the case of **Industrial and Commercial Development Corporation v Sum Modez Industries Ltd CA Civil Appeal No 229 Of 2001** held as follows: “*Service of summons to enter appearance though important, a failure to do so within the stipulated period does not necessarily render proceedings null and void. It will depend largely on the circumstances of each case”* 1. To this court therefore the claim was not invalid as alleged since apart from the summons being delayed the Appellant was served with valid summons which had not expired. The first three grounds of appeal therefore fail. **Whether the trial court erred by finding that the Respondent was a term employee by dint of section 37 of the Employment Act** 1. The Respondent alleged that he worked for the Appellant from 2008 until 2021 when among other employees he was stopped due to Covid 19 effects on a promise that they would be called back. The Respondent worked as a casual for those 13 years. The Appellant produced a contract of 2019 showing he worked as a casual employee. Just like the trial court the Appellant never disputed the period worked by the Respondent of 13 years and it only insisted he was a casual employee but not a term employee. The trial court found that the Respondent was a permanent employee by dint of section 37 of the Employment Act which the Appellant faults. 2. The Court in the case of **Krystalline Salt Limited vs Kwekwe Mwakele & 67 Others [2017] eKLR** defined the different engagements as follows:- "*The Employment Act recognizes four main types of contracts of service: contract for an unspecified period of time, for a specified period of time, for a specific task (piece work) and for casual employment...The decision to elect which form of employment to go for, either as an employee or employer will depend on a number of factors, but the dominant consideration is, for the employee, the earnings and other physical conditions of employment, and on the other hand, savings for the employer."* 1. The Appellant alleged that the Respondent was a casual employee who never worked for consecutive three months to be converted to a permanent employee as per section 37 of the Employment Act. Section 37(1) of the Employment Act provides as follows:- (1*) Notwithstanding any provisions of this Act, where a casual employee―* *(a) works for a period or a number of continuous working days which amount in the aggregate to the equivalent of not less than one month; or* *(b) performs work which cannot reasonably be expected to be completed within a period, or a number of working days amounting in the aggregate to the equivalent of three months or more, the contract of service of the casual employee shall be deemed to be one where wages are paid monthly and section 35 (1) (c) shall apply to that contract of service.* 1. The Appellant maintained that the Respondent never worked for a full month as he was paid on daily basis as and when there was work for him. This court appreciates that the Act envisages a casual employee to be converted to term contract where such employee serves for an aggregate period of more than a month. The court has amplified this position as was held in the case of **Silas Mutwiri vs Haggai Multi-Cargo Handling Services Limited [2013] eKLR**that: *“The Employment Act, 2007 has now created a fundamental shift from the previous Employment Act, Cap 226 with regard to who a*casual employee*is. This followed many decades of abuse, violation and disregard of the rights of workers who were classified as*casual workers*or*casual labourers. *This shift has extensive ramifications as any employer who employs an employee for more than three (3) consecutive months and or is on a job that is not expected to end or be finished within this time, the law creates a mandatory provision and coverts such casual employment into term contract status.”* 1. In this case question before the trial court and in this appeal is whether the Respondent was forever a casual employee or was converted to a regular employee by dint of section 37 of the Act. Black’s law dictionary 9th Edition defines a casual employment as ‘**work that is occasional, irregular and for a short period.**’ In addition, section 2 of the Employment Act defines a casual employee as ‘**means a person the terms of whose engagement provide for his payment at the end of each day and who is not engaged for a longer period than twenty-four hours at a time’** 2. From the evidence presented before the trial court and what the court has observed above, although the Respondent was regarded by the appellant as a casual employee he converted to term employee under the section 37 of the Act since he was paid on monthly basis, served the appellant for approximately 13 years and he was a member of NSSF. The Respondent was also entitled to leave which is an entitlement of term employees as is seen when the Appellant paid the Respondent’s leave entitlement in lumpsum. 3. This court therefore upholds the trial court’s decision that the Appellant had converted to a term employee by dint of section 37 of the Employment Act. ***Whether the trial magistrate erred in finding that the Respondent was unlawfully terminated.*** 1. The trial court found that the Respondent was unfairly terminated without notice. The Respondent alleged that they were stopped during the COVID 19 pandemic with a promise to be recalled which never happened. The Appellant alleged that the Respondent resigned and the letter produced dated 30th May, 2011 was found to be altered and in any case the Respondents were stopped early 2021 and not the said May 2021. The same has the letter head of the Appellant hence it could not be said to have originated from the Respondent. The court therefore agrees with the trial court that the Appellant had a duty to justify the grounds of termination as required under section 47(5) of the Employment Act where it is stipulated that the reasons ought to be fair and valid under section 43 of the Act. If not, the termination would be considered unfair under section 45. The Appellant did not follow the fair procedure provided for under section 41 of the Act hence the termination was unfair as observed by the trial court. The decision of the trial court of finding the termination unfair is therefore upheld. ***Whether the trial court erred in awarding the reliefs awarded to the Respondent.*** 1. The Appellant alleged that the Respondent was not a term employee hence not entitled to notice pay or notice under Section 35 of the Employment Act. This court having found that the Respondent was terminated by the Appellant without notice it follows therefore he was entitled to notice pay as awarded by the trial court. This claim is therefore upheld. 2. On the prayer for house allowance the same is an entitlement under section 31 of the Employment Act. The Appellant despite claiming the salary was consolidated with house allowance did not adduce employment documents as mandated by section 74 of the Employment Act to show that the respondent’s salary had a house allowance factored in it. In addition, this court adds that this is a continuing injury where the Claimant must file their claim within 12 months as per section 90 of the Employment Act. In this case the Respondent was terminated in 2021 and he filed the claim in March, 2022 which was within 12 months since parties seemed to cut ties completely around the time the supposed resignation letter is written around May, 2021 whereas the Respondent alleged he was terminated towards the end of March 2021 hence it was a valid claim. This court upholds this award. **Whether the trial court erred by not awarding damages for unfair termination.** 1. The Appellant alleged that the compensation for unfair termination should not be awarded to the Respondent because it was not among his claims in his statement of claim. This court notes that compensation for unfair termination is a statutory benefit awardable once the court finds the termination to be unfair, whether claimed or not. This was the position of the court in **James Chege & 6 others v Aqua Plumbing Company Limited [2013] KEELRC 622 (KLR)** where the court held that:- *Compensation for unfair termination is a statutory remedy. It is one of the primary remedies for unfair termination provided by the statute at section 49(1)(c) of the Employment Act. The others being reinstatement or reengagement. The fact that the Claimants did not plead for compensation should be no bar to an award of compensation where the Court has reached the conclusion that the termination was unfair.* 1. Section 49(1) provides for compensation for unfair termination and the considerations to be taken in to account under section 49(4).This court therefore finds that the Respondent was entitled to compensation for unfair termination and the court considers the period served by the Respondent of 13 years which was a long time and the nature of the termination which was unfair and finds that the maximum compensation of 12 months’ salary justifiable. 2. **In the upshot the Appeal is found unmerited and is hereby dismissed with costs to the Respondent while allowing the cross appeal as follows: -** * 1. **12 Months salary as compensation for unfair termination …Kshs 15,380.45 x 12 =184,565.4/=. This award shall be subject to taxes and applicable statutory deductions but shall attract interest at court rates from the date of this award until payment in full.** 2. **The other awards are upheld.** 3. **It is so ordered.** **Dated at Nairobi this 28th day of July, 2026** **Delivered virtually this 28th day of July, 2026** **Abuodha Nelson Jorum** **Presiding Judge-Appeals Division**