[2025] KEELRC 1606 (KLR)

Otenge v Agricultural Development Corporation (Appeal E004 of 2024) [2025] KEELRC 1606 (KLR) (23 May 2025) (Judgment)

Neutral citation: [2025] KEELRC 1606 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Kitale

Appeal E004 of 2024

MA Onyango, J

May 23, 2025

Between

Shadrack Omunyini Otenge

Appellant

and

Agricultural Development Corporation

Respondent

(Being an appeal from the Judgment of Hon. S.N. Makila, delivered on 26th June 2024 in Kitale CMELRC NO. E006 of 2022)

Judgment

1. The Appellant herein was the Claimant in Kitale CMELRC No. E006 of 2022 wherein he had sued the Respondent vide a Memorandum of Claim dated 23rd May 2022 seeking compensation and terminal dues for alleged unfair termination of his employment.

2. After hearing the parties, the trial court delivered its judgment on 26th June 2024 and made a finding that the Claimant was unlawfully and unprocedurally terminated from employment. The Appellant was thus awarded one month’s pay in lieu of notice, leave pay dues and house allowance. The trial court however dismissed the claim for unfair termination, the prayer for service pay and the claim salary arrears.

3. The Appellant being dissatisfied with the said Judgement instituted the instant appeal vide the Memorandum of Appeal dated 24th July 2024 on the following grounds of appeal:i.The learned trial magistrate erred in law and fact in failing to find that the Appellant worked for the Respondent for a continuous period of more than 13 monthsii.The learned trial magistrate erred in law and fact in finding and holding that the Appellant was not entitled to the service pay and damages for unfair terminationiii.The learned trial magistrate erred in law and fact in failing to appreciate the pleadings, evidence and submissions on recordiv.The learned trial magistrate erred in law and fact in dismissing the Appellant’s claim for service pay and damages for unfair termination of employment against the overwhelming evidence on record.

4. Consequently, the Appellant prayed for the following orders:a.This the appeal be allowed with costsb.The trial court’s judgment and decree dismissing the Appellant’s claim for service pay and damages for unfair termination be set aside and the same be substituted with a judgment allowing the Appellant’s claim for service pay and damages for unfair termination of employment.

5. The appeal was disposed of by way of written submissions. The Appellant filed its written submissions dated 13th February 2025 while the Respondent’s submissions are dated 12th March 2024.

Analysis 6. The Court of Appeal in Selle & Another v Associated Motor Boat Co Ltd [1968] EA 123 set out the guiding principle in dealing with a first appeal in the following words:-“...this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court ... is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect..."

7. From the above decision, it is clear that my role as a first Appellate Court is to re-evaluate and re-examine the evidence adduced in the trial court in order to reach my own finding, taking into account the fact that this court had no opportunity of hearing or seeing the parties as they testified.

8. Vide his Memorandum of Claim dated 23rd May 2022, the Claimant (now the Appellant) averred that he was employed by the Respondent as a general casual labourer from the year 2018 to 12th January 2021 when he was wrongfully and unfairly terminated from employment without a justifiable cause.

9. It was the Appellant’s case that during the cause of his employment with the Respondent, he was paid a daily wage of Kshs 283 against the established minimum wage. He also stated that by the time he was unlawfully terminated, he had accumulated wages of Kshs 57,600, being wages for the period between 10th September 2021 to 12th to January 2022.

10. According to the Claimant, due to his continuous service, his employment had converted from casual to regular term by virtue of section 37(1) of the Employment Act and he was therefore entitled to terms and conditions of service as a regular employee.

11. It was his case that he had been treated as a casual labourer during which period he was grossly underpaid and was never issued with written contracts, was never given annual leave, did not benefit from medical allowance and was never paid housing allowance. That the Respondent also failed to remit NSSF and NHIF statutory payments.

12. He averred that his dismissal from employment was illegal, unfair and unlawful as it violated section 47(1), 44(4), 43 and 45(2) of the Employment Act and that he was not paid his terminal dues which he tabulated as hereunder:i.One month’s pay in lieu of notice …. Kshs 12,522. 70ii.Leave pay ………………….……………. Kshs 40,457. 95iii.House allowance ………….………….. Kshs 90,163. 20iv.Service pay …………………….………. Kshs 25,085. 40v.Compensation for unfair termination ………..………… Kshs 150,272. 40Total ……………………………………. Kshs 318,501. 65

13. The Appellant prayed for the following reliefs:i.A declaration that section 37 of the Employment Act applies to the Claimant to the effect that his casual employment was converted into a contract of service hence entitled to such terms and conditions of service as he would been entitled to under the Act had he not initially been employed as a casual employee.ii.A declaration that the Claimant’s employment was unlawfully, unprocedurally and unfairly terminated from employment and in the circumstances the claimant is entitled to compensation as prayed for in paragraph 12 above.iii.A declaration that the Respondent had engaged in unfair labour practices.iv.Salary arrears of Kshs 57,600,v.Costs of the suit and interest at court rates from time of filing this suit until payment in fill.vi.A certificate of service as per section 51 of the Employment Act.vii.Any other relief that the court may deem fit and just to grant

14. The Respondent on its part filed a Statement of Response and a counterclaim on 12th July 2022. In its defence, the Respondent denied the Claim by the Appellant and contended that the Appellant absconded duty after the Respondent’s audit team initiated investigations into loss of coffee at the place of work.

15. In the Counter Claim, the Respondent averred that the Claimant was at the place of work on 12th January 2022 when the Respondent lost 80kgs of coffee worth Kshs 1500 per kg and that he absconded duty after realizing that the Respondent had initiated internal investigations into the theft.

16. The Respondent claimed Kshs 120,000 from the Appellant being the value of the lost 80kgs of coffee.

17. The Respondent urged the trial court to dismiss the Claimant’s claim and to allow its counterclaim. It also prayed for costs of the suit.

The Evidence adduced 18. At trial the Appellant testified as CW1 and adopted his witness statements recorded on 22nd June 2022 as his evidence in chief. He also relied on the documents he filed in support of his case as his evidence.

19. In his testimony, the Appellant stated that he was not given any notice before he was terminated from employment. He denied any involvement in the theft of coffee in January 2022 and stated that he was not charged in court for the offence of stealing by servant.

20. On cross examination, the Appellant stated that he worked for the Respondent for 4 years at a daily wage of Kshs 283. He stated that the statements he filed in court in support of his case only related to three months of payment. That he was doing security and farm work at the coffee section. He stated that it was not true that coffee got lost on 12th January 2022. He denied absconding work as claimed and stated that his employment was terminated. He stated that on 12th January 2022, he went to work but was chased away.

21. On re-examination, he stated that he had two bank accounts at KCB and Postbank. That the Respondent forced everyone to open a salary account with Postbank. That he was not paid for the days he worked in January 2022.

22. The Respondent called Damaris Chesaina, its Human Resource Officer who testified as RW1. She adopted her witness statement recorded on 28th February 2023 as her evidence in chief.

23. On cross examination, the Respondent’s witness stated that from the muster roll produced as Dexb 1(a to j), the claimant worked on a need basis between April 2021 to January 2022. According to RW1, the muster roll is not consecutive since the claimant was not working continuously. RW1 maintained that the Claimant absconded duty after the Respondent’s coffee got lost. She stated that as at 12th January 2022, the claimant was owed salary arrears but he was paid the arrears in May 2022.

24. On re-examination, RW1 reiterated that the claimant did not work consecutively but worked on a needs basis. She also contended that as a casual labourer, the Claimant would not have been subjected to a disciplinary hearing.

25. After hearing the parties, the trial court delivered its judgment on 26th June 2024 which read in part as follows: -“13. Pursuant to the above cited provision, this court finds and holds that the Claimant’s employment by the Respondent graduated by operation of law from casual employment to regular services as at July 2021. It therefore follows that as from 1st August 2021, the Claimant ought to have been subjected to such terms and conditions of service as he would have been entitled to had he not initially been employed as casual worker. Any termination of his employment, therefore, ought to have been subjected to the provisions of sections 41(4), 44(4), 43, 45(2) of the Employment Act.

14. It is further evident that the claimant was not subjected to any disciplinary process in regard to the allegations of loss of the 80kgs of coffee. Moreover, the Respondent witness confirmed that they were unable to contact the claimant after the alleged incident. This court further finds that procedure for termination of the claimant's services was not followed. The claimant was thus unlawfully, and unprocedurally terminated.

15. As to the reliefs, the claimant’s terminal benefits shall be calculated in accordance with the Legal Notice No. 2 of 2019. The same shall be prorated to the period worked continuously by the Claimant, that is from June 2021 to January 2022 which is six months. The same are calculated as follows: -a.One month's pay in lieu notice Kshs. 12,522. 70b.Leave pay 21 days x 6/12x 12,522. 70/ 26=Kshs. 5,057. 24/=c.House allowance 5%x12522. 70x6/12x12=Kshs.11,270. 16/=

16. The Claim for unfair compensation fails pursuant to Section 45(3) of the Employment Act. Service pay is payable for every year worked and since the claimant only worked continuously for less than a year, he is not entitled to the relief.

17. The Claimant has also prayed for salary arrears of Kshs.57,600/=. They have not produced any evidence to prove this claim. On the other hand the Respondent has produced D.Exh 2(b) demonstrating that the claimant was paid his arrears due. The claimant is therefore not entitled to the same.

18. As to whether the counterclaim is merited. This court finds that this is not the proper forum for issues raised in the counter claim. The same is hereby dismissed with costs.

19. In the upshot the claim is hereby allowed in the following terms: -a.A declaration is hereby issued that section 37 of the Employment Act applies to the claimant to the effect that his casual employment was Converted to a contract of serviceb.A declaration is hereby issue that the Claimant’s employment was unlawfully and unprocedurally terminated.c.The claimant is entitled to the following reliefs:i.One month's pay in lieu notice Kshs. 12,522. 70ii.Leave Pay Kshs 5,057. 24iii.House Allowance Kshs 11,270. 16Total…………………………………...Kshs. 28,850. 10

20. The Claimant is also awarded costs of the suit and interests

21. The aggrieved party has a right of appeal within 30 days hereof”

26. It is the said judgment that is now the subject of this appeal.

Appellant’s submissions 27. The Appellant in his submissions faulted the trial court for relying on the muster roll for the period between January 2021 and January 2022 produced in evidence by the Respondent. According to the Appellant, the muster roll produced by the Respondent was not conclusive as the Respondent did not produce muster rolls for the different sections that the Appellant claims to have worked in for the entire period between 2018 and January 2022.

28. The Appellant submitted that despite the court finding that the appellant only worked from July 2021, the said muster roll confirmed that the Appellant was at work the entire period between January 2021 to January 2022 and relates to pulping and drying coffee only whereas the Appellant testified that as a casual laborer he used to be assigned in different capacities including slashing, grading, pulping, labelling, spraying and loading, depending on the priority needs of the Respondent at the given period of time.

29. The Appellant therefore submitted that the said muster roll is inconclusive in so far as the duties performed by the appellant during the period claimed is concerned as the muster roll did not make reference to other duties such as slashing, grading, spraying, loading and guarding which was not adduced in evidence.

30. In addition, it is the Appellant’s submission that he Respondent failed to produce the muster roll for the period between 2018 to December 2020 to enable the court verify the Respondent's claim.

31. It was the Appellant’s case that a necessary presumption therefore arises that the appellant continuously worked for the Respondent from 2018 to January 2022 and a production of the muster rolls for the entire period claimed and for the other sections and duties alleged by the appellant would have prejudiced the Respondent's case. While relying on section 10(7) of the Employment Act and the case of Ouma v Steel MakersLimited (Cause 259 of 2015) [2022] KEELRC 12737 (KLR) (4 October 2022) (Judgment), the Appellant contended that the failure by the Respondent to adduce in evidence the muster rolls for entire period claimed by the appellant and for the different sections cited by the appellant should be interpreted in favour of the appellant.

32. The Appellant thus submitted that the trial court erred in relying on the muster roll from a single section of the company for the year 2021 period only, to find and hold that the appellant only worked for a continuous period of 6 months.

33. The court was urged to find and hold that the appellant worked for the respondent for continuous period of 4 complete years hence more than 13 months therefore entitled to awards for service pay and unfair termination of employment. In support of this position, the Court of Appeal case of Gogni Rajope Construction Company Limited & another v Omondi (Civil appeal 321 of 2019) [2025) KECA 161 (KLR) (7 February 2025) Judgment) was cited.

34. The Appellant therefore submitted that he is entitled to the reliefs sought, including a claim for unfair termination even if it were to be found that he worked for less than 13 months.

35. The Appellant also urged the court to exercise its discretion and adjust the amounts awarded by the trial court regarding leave pay and house allowance to cover the entire period of 4 years pleaded as opposed to the 6 months awarded by the trial court.

36. In sum, the Appellant prayed for the Appellant’s appeal be allowed and the judgment of the trial court be substituted with a judgment allowing the appellant's claim in entirety as pleaded and particularized in memorandum of claim as well as for an award of costs of the Appeal.

The Respondent’s submissions 37. On its part, the Respondent submitted that the Muster roll it produced as Dexb2a-f showed that the Appellant was engaged intermittently and not for a continuous period exceeding 4 years as claimed.

38. According to the Respondent, in the year 2019, the Appellant worked for 25 days as a security guard in the month of December where he earned a wage of Kshs 7,220; in the year 2020, the Appellant worked as a security guard intermittently for 92 days in the 6 months and earned Kshs 33,797; that further in the year 2021, he worked as a seasonal casual intermittently for a period of 183 days in the coffee section and lastly, that in the year 2022, he worked for 9 days in the month of January and earned a wage of Kshs 2,547.

39. The Respondent submitted that the Appellant did not object or deny the contents of the muster roll and pay rolls as far as field attendance and payment for the Appellant was concerned. It was the Respondent’s submission that the Appellant held an account with KCB and Post Bank where his cumulative wage arrears would be deposited and that the payrolls produced by the Respondent were acknowledged by the two banks through stamping, a clear indication that the payments for the casual workers was received by the banks. It is submitted that as evidenced in the muster roll, the Appellant's wages were calculated daily and paid fortnightly.

40. The Respondent submitted that the Claim that the Appellant worked for the Respondent for more than 13 months continuously without evidence cannot stand as he cannot be compensated for the period he never worked for the Respondent.

41. The Respondent further submitted that pursuant to Section 35(5) of the Employment Act 2007, service pay is payable to an employee who has been engaged for a period of a year and more before his service is terminated and that in the instant case, the Respondent has demonstrated through evidence of muster roll and payment records that indeed the Appellant worked intermittently for a period which is not envisaged in Section 35(5) of the Act 2007, hence the trial magistrate made the correct finding on this ground.

42. In the end, the Respondent submitted that the Appellant's appeal lacks merit and sought for it to be dismissed with costs to the Respondent.

Analysis and determination 43. Upon analyzing the Appellant’s Record of Appeal and the submissions by both parties, I find that the only issue that falls for my determination is whether the findings and the award of the trial court are in conformity with the pleadings and evidence adduced before it.

44. I will address the grounds of appeal in the order in which they have been set out in the Memorandum of Appeal.

45. In ground 1 of Appeal the Appellant faulted the trial magistrate for failing to find that he worked for the Respondent for a continuous period of more than 13 months.

46. In his submissions on Appeal, the Appellant submitted that the trial court in its judgment erred by holding that the Appellant only worked for the Respondent continuously for a period of 6 months between July 2021 and January 2022 hence could not be awarded service pay and damages for unfair termination of employment because he worked for less than 1 year.

47. In his pleadings and oral testimony before the trial court, the Appellant contended that he had worked for the Respondent for a period of 4 years. The Respondent in its defence averred that it engaged the Appellant as a casual employee to undertake some assignments from time to time and not under any circumstances as a full-time employee.

48. The Respondent produced muster rolls and payment records for the Appellant at pages 53-69 of the Record of Appeal which cover the period between August 2019 and January 2022. The records show that the Appellant worked as follows:In 2020TABLETRTC{style border: 1px solid #000; width: 7%}No.TC{style border: 1px solid #000; width: 35%}MonthTC{style border: 1px solid #000; width: 56%}Number of Days WorkedTRTC{style border: 1px solid #000; width: 7%}.TC{style border: 1px solid #000; width: 35%}JanuaryTC{style border: 1px solid #000; width: 56%}27TRTC{style border: 1px solid #000; width: 7%}.TC{style border: 1px solid #000; width: 35%}FebruaryTC{style border: 1px solid #000; width: 56%}27TRTC{style border: 1px solid #000; width: 7%}.TC{style border: 1px solid #000; width: 35%}MarchTC{style border: 1px solid #000; width: 56%}13TRTC{style border: 1px solid #000; width: 7%}.TC{style border: 1px solid #000; width: 35%}JuneTC{style border: 1px solid #000; width: 56%}22TRTC{style border: 1px solid #000; width: 7%}.TC{style border: 1px solid #000; width: 35%}JulyTC{style border: 1px solid #000; width: 56%}1TRTC{style border: 1px solid #000; width: 7%}.TC{style border: 1px solid #000; width: 35%}SeptemberTC{style border: 1px solid #000; width: 56%}2TRTC{style border: 1px solid #000; width: 7%}.TC{style border: 1px solid #000; width: 35%}TotalTC{style border: 1px solid #000; width: 56%}92In 2021No. Month Number of Days Worked

. April 3

. May 18

. June 24

. July 25

. August 18

. September 23

. October 23

. December 25

. Total 183

49. The Appellant did not complain that he was owed wages for the period 2019 or 2020. He further did not contest the averments of the Respondent that he was paid all outstanding wages for 2021 and 2022 in May, 2022. The only prayers in his claim were for pay in lieu of notice, leave pay, house allowance, service pay and compensation for unfair termination.

50. From the evidence adduced by the Respondent based on payments made to the Appellant which he did not contest, the continuous employment of the Appellant was from May 2021 to 12th January, 2022 when the theft of coffee was discovered and the Appellant’s employment ceased.

51. Under section 37 of the Employment Act his continuous service was therefore for 8 months. In this respect it is my finding that the trial court erred in holding that the continuous period of employment was 6 months.

52. The other grounds of appeal relate to the terminal dues. The Appellant faults the trial court for dismissing his claim for service pay and damages for unfair termination of employment.

53. Section 37 of the Employment Act, which provides for conversion of casual employment into monthly contracts specifically provide as follows:37. Conversion of causal employment to term contract(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.(2)In calculating wages and the continuous working days under subsection (1), a casual employee shall be deemed to be entitled to one paid rest day after a continuous six days working period and such rest day or any public holiday which falls during the period under consideration shall be counted as part of continuous working days.(3)An employee whose contract of service has been converted in accordance with subsection (1), and who works continuously for two months or more from the date of employment as a casual employee shall be entitled to such terms and conditions of service as he would have been entitled to under this Act had he not initially been employed as a casual employee.(4)Notwithstanding any provisions of this Act, in any dispute before the Industrial Court on the terms and conditions of service of a casual employee, the Industrial Court shall have the power to vary the terms of service of the casual employee and may in so doing declare the employee to be employed on terms and conditions of service consistent with this Act.(5)A casual employee who is aggrieved by the treatment of his employer under the terms and conditions of his employment may file a complaint with the labour officer and section 87 of this Act shall apply.

54. Having found that the Appellant’s employment converted for only 8 months, he is not entitled to service pay, which, as the trial court correctly found, is payable for every year worked. I thus uphold the finding of the trial court that the Appellant is not entitled to service pay.

55. The Appellant further faulted the trial court for not awarding him damages for unfair termination. An employee is entitled to compensation for unfair termination when a finding has been made that the termination of their employment was unfair.

56. The trial court found that because the Appellant’s was not subjected to the provisions of sections 41, 44(4), 43, 20 and 45(2) the termination of his employment was unfair.

57. The circumstances under which the Appellant left employment were contested. The Appellant’s position was that his employment was terminated verbally while the Respondent averred that the Appellant absconded duty after the theft of coffee was discovered.

58. According to the evidence of the Appellant before the trial court, the Respondent chased him away when he reported for work on 12th January, 2022. The Respondent on the other hand denied that the Claimant’s employment was terminated. It was the Respondent’s position that the Appellant stopped reporting for work when investigations on the loss of the coffee started.

59. From the evidence on record, I would agree with the Respondent that the circumstances under which the Appellant’s employment ceased are such that it cannot be blamed for not subjecting him to disciplinary process. The Appellant was one of the employees on duty when the coffee was stolen and investigations revealed that there was collusion among all the employees on duty at the time, both the temporary (or casual) employees as they were referred to, and the regular employee of the Respondent. In the circumstances it is my finding that the Appellant did not prove that his employment was unfairly terminated.

60. In answer to ground 4 in the Memorandum of Appeal, it is imperative that the court addresses the reliefs sought by the Appellant in its Memorandum of Appeal. The Appellant had sought pay in lieu of notice, leave pay, house allowance, service pay and compensation for unfair termination.

61. In its judgment, the trial court awarded the Appellant one month’s pay in lieu of notice, leave pay and house allowance for 6 months.

62. The Appellant in his submissions on appeal urged the court to adjust the awards by the trial court regarding leave pay and house allowance to cover the entire period of 4 years as pleaded as opposed to the 6 months awarded by the trial court.

63. Section 28 of the Employment Act provides that leave is payable for every month worked at the rate of 1. 75 days. In the instant case the Appellant did not complete any full month during the period of continuous service. I will therefore aggregate the number of days worked and award him leave based on the total number of days worked.

64. The days worked by the Appellant as already stated in this judgment was 300. I will divide the days by 26 to take care of weekly rest day. This gives me an aggregate of 12 months. I therefore award the Claimant 21 days in respect of the 12 months which amounts to Kshs. 5,943 (283x21).

65. I have used the daily rate of pay of 283 which is what the Appellant was entitled to under the Regulation of Wages (Agricultural) Order for 2018 which was in force at the time of termination of his employment.

66. The award for pay in lieu of notice is revised to Kshs. 6,736 in accordance with the Regulation of Wages (Agricultural) Order for 2018 which was in force at the time of termination of his employment.

67. The award of house allowance is set aside as under the Regulation of Wages (Agricultural) Order there is no provision for house allowance. Further, the Claimant was paid a daily wage which (even) under the Regulation of Wages (General) Order, is inclusive of house allowance.

68. In summary therefore I make the following orders:i.The decision of the trial court in respect of the period the Appellant’s service converted to monthly contract is set aside and replaced with 8 months.ii.The award of one months salary in lieu of notice is reviewed from Kshs. 12,522 to Kshs. 6,736. iii.The award of leave days is reviewed to Kshs. 5,943iv.The award for house allowance is set aside.

69. Each party shall bear its costs of the appeal.

70. Judgment accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY ON THIS 23RD DAY OF MAY 2025MAUREEN ONYANGOJUDGE