https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2051

REPUBLIC OF KENYA IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT MOMBASA CIVIL APPEAL NO. E098 OF 2025 KENSALT LIMITED ........................................................ APPELLANT VERSUS JOSHUA MUTISYA MUTUA .......................................RESPONDENT *(Being an Appeal from the Judgment and Decree of Hon. E. M. Mwamuye, Senior Resident Magistrate, delivered at Mombasa on 8th May 2025 in Mombasa CMC ELRC Cause No. E117 of 2024)* **JUDGMENT** **A. INTRODUCTION** 1. This is a first appeal from the judgment of the Senior Resident Magistrate's Court at Mombasa (Hon. E. M. Mwamuye, SRM) delivered on 8th May 2025 in Mombasa CMC ELRC Cause No. E117 of 2024, in which the trial court found that the Respondent's employment with the Appellant, a casual engagement, had by operation of section 37 of the Employment Act, 2007 converted into a term contract of service, that the Respondent's termination therefrom was procedurally unfair, and consequently entered judgment for the Respondent in the sum of Kshs. 105,408/=, together with interest and costs. Aggrieved, the Appellant, Kensalt Limited, lodged the present appeal by a Memorandum of Appeal dated 5th June 2025, seeking to have the judgment set aside and the suit dismissed in its entirety. **B. BACKGROUND** 2. The Respondent, Joshua Mutisya Mutua, instituted the suit before the trial court by a Memorandum of Claim dated 22nd February 2024, pleading that he was employed by the Appellant as a General Construction Worker in September 2021 and worked continuously, six days a week with Sundays off, until 16th November 2023, earning a daily wage of Kshs. 732/=, paid in cash lump sum on a weekly basis. He averred that on 16th November 2023, upon reporting to work as was his custom, a supervisor in the Appellant's employ, one Kalyan Hiran, informed him that his services were no longer required on account of redundancy, and that he was thereupon paid a sum of Kshs. 15,632/= with no explanation of what the payment represented, without notice, without consultation, and without any of his terminal or contractual dues having first been settled. 3. It was the Respondent's case that, having served the Appellant continuously for a period exceeding one month, indeed for approximately two years, his casual engagement had converted to a term contract of service within the contemplation of section 37 of the Employment Act, and that he was thereby entitled to the protections afforded to employees under contracts of service, including notice of termination under section 35(1)(c) and terminal benefits upon unfair termination. He accordingly sought terminal and contractual dues totalling Kshs. 344,332.80/=, comprising one month's salary in lieu of notice, unpaid leave days, house allowance, severance pay and maximum compensation for unfair termination, together with a declaration that his termination was unfair, unjust and wrongful, costs and interest. 4. The Appellant entered appearance and filed its Response to the Memorandum of Claim dated 8th March 2024, in which it admitted having engaged the Respondent but averred that he was at all material times a casual employee whose wages were paid at the end of each day and whose engagement never exceeded twenty-four hours at a time, that his services were accordingly not capable of “termination” in the legal sense, and that the provisions of the Employment Act relied upon by the Respondent did not avail him. It is notable, and a matter to which this court shall return, that the prayers appended to that same pleading additionally sought a declaration that the Employment Act was inapplicable “by virtue of the claimant's engagement as piece rated packers and takers,” an averment that sits uneasily beside the Appellant's parallel and repeated characterisation, throughout the same pleading and its evidence, of the Respondent's engagement as that of a casual labourer paid a daily wage. **C. PROCEEDINGS AND EVIDENCE BEFORE THE TRIAL COURT** 5. The suit proceeded to hearing on 4th February 2025. The Respondent testified as the sole witness in support of his claim, adopting his witness statement dated 22nd February 2024 and his list and bundle of documents of the same date as his evidence-in-chief. He testified that he was employed as a mason (“fundi wa kujenga”), that he worked six days a week resting only on Sundays, that he signed for his wages upon payment, and that he was engaged in the construction of a godown for the Appellant, which construction remained incomplete when his engagement was brought to an end on the instructions of the said Kalyan Hiran that “the work was finished.” He testified further that he was paid Kshs. 15,632/= upon termination without explanation, and that he did not report the matter to the labour office. 6. The Appellant called its Human Resource officer, Rogers Birai, as its sole witness. He adopted his witness statement dated 9th September 2024 and produced documents dated 11th November 2024, comprising attendance registers of casual labourers for three isolated weeks, namely 4th–10th June 2021, 10th–16th February 2023 and 10th–16th November 2023. Under cross-examination, RW1 conceded that these records were mere “samples” and did not constitute the complete record of the Respondent's employment history with the Appellant, and that he was unable to confirm whether National Social Security Fund remittances had been made on the Respondent's behalf notwithstanding that a corresponding deduction was reflected on the Respondent's own list of documents. It is notable that Kalyan Hiran, the supervisor said to have communicated the termination to the Respondent, was not called to testify. **D. THE IMPUGNED JUDGMENT** 7. In its judgment delivered on 8th May 2025, the trial court framed three issues for determination, namely the nature of the employment relationship between the parties, whether the Respondent was unfairly terminated, and whether he was entitled to the reliefs sought. 8. On the first issue, the trial court held that while the burden lay upon the Respondent to establish that he was engaged as a casual employee and that he worked continuously for a period aggregating to more than one month, the Appellant, as employer, bore a correlative burden under section 10(7) of the Employment Act to produce a written contract or particulars of employment, failing which the burden of proving or disproving a disputed term of employment shifted to it. The trial court found that, notwithstanding the paucity of attendance records placed before it, the Respondent's National Social Security Fund statement, reflecting monthly remittances by the Appellant, in particular Kshs. 2,160/= per month from February to October 2023, went uncontroverted and demonstrated that the Respondent worked for the Appellant for a period exceeding one month. Applying the decision of the Court of Appeal in Nanyuki Water & Sewage Company Limited v Benson Mwiti Ntiritu & 4 others [2018] eKLR, the trial court found and held that the Respondent's casual employment had converted to a contract of service within the meaning of section 37 of the Employment Act. 9. On the second issue, the trial court found that the Respondent's engagement, though converted, remained tied to the completion of the godown construction project, that his disengagement upon completion of that project accordingly amounted to a valid and fair reason for termination, and that his claim to have been declared redundant was not established on the material before the court. The trial court nevertheless found that the Appellant, having neither issued the Respondent with notice of termination nor paid him a month's salary in lieu thereof, had breached section 35(1)(c) as read with section 45 of the Employment Act, rendering the termination procedurally, though not substantively, unfair. 10. On the third issue, the trial court awarded the Respondent one month's salary in lieu of notice (Kshs. 17,568/=), house allowance for twenty months at the rate of 15% of his monthly equivalent salary (Kshs. 52,704/=), and two months' compensation for unfair termination (Kshs. 35,136/=), being a total award of Kshs. 105,408/=, together with interest at court rates from the date of filing until payment in full, and costs of the suit. The trial court declined to award severance pay, holding that the Respondent had not been terminated on account of redundancy, and limited the leave claim to the eighteen months permitted under section 28(4)(f) of the Act rather than the twenty-four months claimed. **E. THE APPEAL** 11. Aggrieved by the whole of that judgment, the Appellant filed its Memorandum of Appeal dated 5th June 2025, raising the following grounds, that the trial court: (a) erred in holding that the Claimant's employment converted into a contract of service, despite clear legal provisions recognising casual employment as terminating upon completion of a specific task; (b) wrongly applied the law by awarding one month's salary in lieu of notice, ignoring that the Claimant was engaged on a need basis and paid a daily wage, which does not attract termination benefits; (c) erred in awarding house allowance of Kshs. 52,704/=, failing to consider that casual employees are not entitled to house allowance as their wages cover all necessary remuneration; (d) misdirected itself in awarding compensation of Kshs. 35,136/=, there being no enforceable employment contract and no proof of wrongful dismissal; (e) failed to recognise that casual employment ceases upon completion of the specific task for which the Claimant was engaged; and (f) unjustifiably awarded costs to the Claimant, the Respondent having acted in accordance with the law and not having unlawfully terminated the employment. 12. The Appellant prayed that the appeal be allowed, the judgment of the trial court be set aside, and the suit be dismissed with costs to the Appellant. **F. THE PARTIES' SUBMISSIONS** ***(i) The Appellant's Submissions*** 13. Learned counsel for the Appellant filed written submissions dated 20th November 2025, urging this court, sitting as a first appellate court, to re-evaluate and reassess the evidence and to arrive at its own conclusions. It was submitted that the Claimant bore the burden of proving that he worked continuously for the Appellant from the first to the last day of his engagement, that National Social Security Fund contributions are a statutory obligation which do not, without more, establish permanent or continuous employment, and that the attendance registers produced by the Appellant, which the Respondent did not rebut with evidence of his own, demonstrated that the Respondent did not report to work continuously. Counsel urged that it was erroneous for the trial court to rely on the NSSF statement alone in holding that the Respondent's casual employment had converted, and submitted that the Respondent remained, in the end, a casual labourer who never worked continuously for an aggregate of one month, entitling the Appellant to have the judgment of the trial court set aside and the claim dismissed with costs. ***(ii) The Respondent's Submissions*** 14. Learned counsel for the Respondent filed written submissions dated 28th January 2026, opposing the appeal in its entirety. It was submitted that it is not in dispute that the Respondent was engaged on a casual basis in September 2021 and worked continuously, six days a week, until his termination on 16th November 2023, a period spanning eighteen months of confirmed NSSF remittances by the Appellant for which no explanation was ever tendered, and that the Appellant's own witness conceded under cross-examination that the attendance records produced were mere samples and not the complete record of the Respondent's employment. Relying on Rashid Mazuri Ramadhani & 10 others v Doshi & Company (Hardware) Limited & another [2018] eKLR and Nanyuki Water & Sewage Company Limited v Benson Mwiti Ntiritu & 4 others [2018] eKLR, counsel submitted that the trial court correctly found that the Respondent's casual employment had converted under section 37 of the Employment Act, that the award of one month's notice pay, house allowance and compensation for unfair termination was sound, justifiable and firmly anchored on the evidence and the law, and that the appeal ought to be dismissed with costs to the Respondent. **G. THE DUTY OF THE FIRST APPELLATE COURT** 15. This being a first appeal, it is well settled, and indeed both counsel are agreed, that it is the duty of this court to re-evaluate and reassess the evidence, both oral and documentary, adduced before the trial court, and to arrive at its own independent conclusions, bearing in mind that it neither saw nor heard the witnesses testify and should give due allowance for that disadvantage (see Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123). This court has undertaken that exercise in arriving at the determination set out below. **H. ISSUES FOR DETERMINATION** 16. Arising from the grounds of appeal and the rival submissions, the following issues fall for determination: (a) whether the trial court erred in finding that the Respondent's casual employment converted into a contract of service under section 37 of the Employment Act; (b) whether the trial court erred in its finding on the reason for, and the fairness of, the Respondent's termination, including the allegation of redundancy; (c) whether the trial court erred in the reliefs it granted and in those it declined to grant; and (d) who shall bear the costs of the appeal. **I. ANALYSIS AND DETERMINATION** ***(a) Conversion of the Respondent's employment under section 37*** 17. There is no contention before this court, nor was there before the trial court, that the Respondent worked for the Appellant from 2021 to 2023; that much is common ground. What is in issue is the character and continuity of that engagement. The Respondent's evidence, both in his witness statement and under cross-examination, was to the effect that he worked continuously, six days a week, throughout that period. In this court's view, that evidence was not sufficiently discounted, or at all, by the Appellant. To the contrary, the material that was placed before the trial court, and which the trial court keenly considered, reveals support for, rather than any discounting of, the Respondent's account. The Respondent's NSSF statement records monthly remittances by the Appellant running, materially, from May 2022 through October 2023, a pattern of conduct inconsistent with genuinely intermittent, task-by-task casual engagement and consistent instead with continuous service. The attendance registers relied upon by the Appellant, confined as they were to three isolated weeks spanning a period exceeding two years, and which the Appellant's own witness conceded on oath were mere “samples” and not a complete record, were incapable of rebutting, and did not in fact rebut, the Respondent's account of continuity. An employer who is best placed, indeed under section 10(7) of the Employment Act obliged, to keep and produce complete records of an employee's engagement, and who instead places before the court a curated selection of records covering a handful of weeks out of a period exceeding two years, cannot be heard to complain that the trial court preferred the employee's uncontroverted account of continuous service. 18. It is, further, imperative to observe that the Appellant, in its own pleadings before the trial court, characterised the Respondent's engagement in terms that were themselves internally inconsistent. While the body of the Response to the Memorandum of Claim consistently described the Respondent as a “casual employee” paid at the end of each day, the prayers appended to that same pleading sought, in the alternative, a declaration that the Employment Act did not apply “by virtue of the claimant's engagement as piece rated packers and takers.” Casual employment and piece-rate or task-based work are, in law, two distinct forms of engagement, each attracting its own incidents: the former is defined, under section 2 of the Employment Act, by engagement and payment at the end of each day for a period not exceeding twenty-four hours at a time, whereas the latter is defined by remuneration tied to the completion of an identified task or output, irrespective of the time taken to complete it. This would only have been a conclusion of any import, favourable to the Appellant, had the nature of the Respondent's engagement been set out concisely and consistently in the Appellant's pleaded case. It was not. The Appellant's own case vacillated between the two characterisations without reconciling them, and that internal inconsistency, far from assisting the Appellant, further undermines the submission that the nature of the Respondent's engagement was so plain and so exclusively casual as to admit no possibility of conversion under section 37. 19. Having regard to the foregoing, and having independently re-evaluated the evidence as it is bound to do on a first appeal, this court is satisfied that all factors considered, the trial court's conclusion that the Respondent's casual employment converted to a contract of service under section 37 of the Employment Act, whereunder wages are deemed to be paid monthly and section 35(1)(c) of the Act applies, was not erroneous, whether in law or in fact. Grounds (a) and (e) of the Memorandum of Appeal accordingly fail. ***(b) Redundancy and the fairness of the termination*** 20. The trial court, correctly in this court's view, declined to accept that the Respondent's termination was occasioned by redundancy. There was, in truth, no redundancy. The basis for the Respondent's allegation that he was declared redundant is hard to discern from the material placed before the trial court: no notice of intended redundancy, no criteria for selection, and no report to the labour officer, being matters ordinarily attendant upon and evidencing a redundancy, was demonstrated, and the Respondent's own testimony instead tied his disengagement to the completion of the specific construction project on which he had been engaged. This court accordingly affirms the trial court's finding that there existed a valid and fair reason for the Respondent's disengagement, namely the completion of the godown construction, and that the claim of redundancy was not made out. It follows, and is hereby affirmed, that the Respondent was not entitled to severance pay, that relief being available only upon termination on account of redundancy under section 40 of the Employment Act. 21. That notwithstanding, the existence of a fair reason for termination did not relieve the Appellant of the procedural obligation, once the Respondent's engagement had converted under section 37, to issue him with notice of termination or to pay him a month's salary in lieu thereof pursuant to section 35(1)(c) as read with section 45 of the Employment Act. No such notice was given, nor was payment in lieu made prior to or contemporaneously with termination; the sum of Kshs. 15,632/= paid to the Respondent was, on the unrebutted evidence, unexplained. The trial court's finding that the termination was, to that limited and procedural extent, unfair, was correct and is upheld. ***(c) The reliefs granted and declined*** 22. Turning to the reliefs, this court finds no basis upon which to disturb the trial court's award. The award of one month's salary in lieu of notice (Kshs. 17,568/=) follows directly from the finding, now affirmed, that the Respondent was entitled to notice under section 35(1)(c) and that none was given. The award of house allowance (Kshs. 52,704/=), calculated at 15% of the Respondent's monthly equivalent wage over the twenty months for which his employment had, on the evidence, converted and for which he was never paid any housing allowance, is properly anchored in section 31 of the Employment Act, and was neither disputed as to quantum nor otherwise impeached before this court. The award of two months' compensation for unfair termination (Kshs. 35,136/=), being well short of the statutory maximum, was a measured and justified exercise of the trial court's discretion, having regard to the sum already paid to the Respondent upon termination, the fact that his engagement was tied to a project nearing its natural end, and the Appellant's own conduct in persistently treating him as a casual employee notwithstanding the conversion of his status. That exercise of discretion discloses no error in principle warranting interference by this court. 23. Conversely, the trial court's refusal to grant severance pay, for the reasons already set out, and its limitation of the leave claim to eighteen rather than twenty-four months in fidelity to section 28(4)(f) of the Employment Act, were, in equal measure, sound and correctly arrived at. In sum, the basis for the grant of those reliefs that the trial court granted was sound; that for the decline of the others was equally sound. Grounds (b), (c) and (d) of the Memorandum of Appeal accordingly fail. ***(d) Costs*** 24. It is trite that costs follow the event, save where the court, for good reason, orders otherwise (section 27 of the Civil Procedure Act). The Appellant having been wholly unsuccessful in this appeal, there is no reason to depart from the ordinary rule. Ground (f) of the Memorandum of Appeal accordingly likewise fails. **J. DISPOSITION** 25. For the reasons set out above, this court finds that the appeal lacks merit and is for dismissal. The appeal is for failure, with costs. 26. Consequently, it is hereby ordered that: (a) The appeal be and is hereby dismissed. (b) The Judgment and Decree of the Senior Resident Magistrate's Court at Mombasa (Hon. E. M. Mwamuye, SRM) delivered on 8th May 2025 in Mombasa CMC ELRC Cause No. E117 of 2024 be and is hereby upheld in its entirety. (c) The Appellant shall bear the costs of this appeal. Dated, signed and delivered at Mombasa this 16th day of July 2026. **OCHARO KEBIRA** **JUDGE**