Automated Summary
Key Facts
The case involves Avic International Holding Corporation (appellant) and Festus Kieti Mulwa & Others (respondents) over claims of unfair termination and underpayment. The respondents were employed on fixed-term contracts for a dam construction project, which was suspended due to bad weather in May 2023. The trial court ruled their termination unlawful and awarded compensation for unfair dismissal, underpayment, and notice pay. The appeal court upheld this decision, finding the employment relationship converted to a month-to-month basis after contract expiry and affirming the wage calculations under updated legal notices.
Issues
- Whether the trial magistrate erred in finding that the Respondents were unfairly and unlawfully terminated, considering the continuation of employment beyond the fixed term contract and the failure to provide notice under section 35(1)(c) of the Employment Act.
- Whether the trial court erred in awarding the Respondents compensation for unfair termination, salary in lieu of notice, and underpayments, based on the applicable Legal Notices No. 2 of 2018 and No. 125 of 2022, and the doctrine of implied repeal which rendered the 2012 Wage Order obsolete.
Holdings
- The court affirmed the trial court's awards of compensation (4 months' salary for Festus Kieti Mulwa and 3–4 months for others) and underpayment damages. It ruled that the 2018 and 2022 legal notices on minimum wages applied, not the 2012 order, due to the doctrine of implied repeal and to avoid discrimination. The Appellant's request to reduce compensation was dismissed as the trial court's discretion was deemed reasonable.
- The court upheld the trial court's finding that the Respondents were unfairly and unlawfully terminated. It determined that the employment relationship converted to a month-to-month contract under section 35(1)(c) of the Employment Act after the fixed-term contract expired in June 2022. The Appellant failed to provide notice of termination, and the suspension due to bad weather did not justify the termination without following proper procedures.
Remedies
- The court awarded compensation for unfair termination, including 4 months' salary to one respondent and between 3 to 4 months to others. The appellate court found the trial court's discretion in awarding compensation to be justified and will not disturb the amounts.
- Compensation for underpayment was awarded based on Legal Notice No. 2 of 2018 and Legal Notice No. 125 of 2022. The court rejected the Appellant's reliance on the 2012 wage order, finding it discriminatory and unconstitutional.
- The Appeal was found unmerited and dismissed with costs to the Respondents. The court upheld the trial court's findings that the termination was unfair and unlawful, and the awards made were reasonable and justified.
- Respondents were granted salary in lieu of notice under section 36 of the Employment Act. The court held that the Appellant failed to issue termination notice as required by law and the existing contract.
Legal Principles
- The court held that the Respondent had a legitimate expectation for renewal of his fixed-term contract after continuing work past its expiry without being notified of non-renewal. The Appellant's failure to communicate termination or provide notice under the contract and Employment Act rendered the termination unfair.
- The court applied the doctrine of implied repeal, finding that newer wage legal notices (2018 and 2022) superseded the 2012 Labour Institutions (Building and Construction) (Wages) Order. This ensured non-discriminatory wage calculations for the Respondents.
- The court emphasized the Respondent discharged his legal burden to prove unfair termination, shifting the evidentiary burden to the Appellant to justify the termination under section 47(5) of the Employment Act. The Appellant failed to meet this burden.
Precedent Name
- Stephen Mwangi Mutunga v The Cabinet Secretary, Ministry of Education, Science and Technology
- Kipsang No. 2 v Vishak Builders Limited
- Ronald Kai Tsuma & 4 Others v China Jiangxi Kenya Limited
- OI Pejeta Ranching Limited v David Wanjala Mboro
- James Gacheru Kariuki & 19 Others v County Government of Mombasa & 56 Others
- Salome Chege Ngari & 2 Others vs J.M Muritu Construction
- Thiong'okaale Kotol & 2 Others v Mogotio Constituency Development Fund Committee & Another
- Otiende v Ligawa & another
- Stella Mukwana Siboko & Another v Style Industries Limited
- Kenya Revenue Authority v 2 others v Darasa Investments Limited
- Josephine M. Ndungu & Others v Plan International Inc
Cited Statute
- Employment Act
- Labour Institutions Act 2007
- Evidence Act
Judge Name
Abuodha Nelson Jorum
Passage Text
- 53. ... the court agrees with the trial court since it would be impracticable to apply rates of 2012 to an employee who left work over ten years later when times have changed and the law has always been revised on the wages for all employees as times change. The doctrine of implied repeal... applied in this case where the current legal notices of 2018 and 2022 repealed the Labour institutions (Wages) order 2012...
- 48. This court agrees with the trial court that the Respondent discharged his legal burden of proof that termination was unfair and the evidentiary burden of proof then shifted to the Appellant to justify the termination under section 47(5) of the Employment Act. The Appellant cannot claim that it never terminated the Respondent when it sent him on suspension without notice and the suspension had no specific duration.