Introduction
1. This is an appeal by Naushad Trading Company Limited ("the Appellant") against the Judgment and Decree of the Chief Magistrate's Court at Mombasa (Hon. J.B. Kalo, Chief Magistrate) delivered on 10th December 2025 in Cause No. E431 of 2021, Gerishon Ambaka Obiayo v Naushad Trading Company Limited, in which the trial court found that the Respondent was an employee of the Appellant, that his employment had been unlawfully and unfairly terminated, and entered judgment in his favour in the sum of Kshs 418,200, together with costs, interest and an order for a certificate of service.
2. The cause from which this appeal arises was one of four tried together at Mombasa, each brought by a different loader against the same Appellant, each turning on the same underlying question: whether men engaged to load and offload cargo at the Appellant's go-downs, paid daily through an intermediary described as a "gang leader," are in law its employees. This Court has already determined two of the three companion appeals arising from that consolidated trial. In Naushad Trading Company Limited v Munywoki [2026] KEELRC 2014(KLR) (concerning a claimant of some sixteen years' service, the appeal succeeded in part, this Court substituting a statutory-minimum wage for the pleaded monthly figure and moderating the compensation awarded. In the appeal concerning Herbert Mmbwanga Chomulose (ELRC Appeal No. E004 of 2026), a claimant of some twenty-six years' service, the appeal was partially successful. The present appeal, concerning the Respondent Gerishon Ambaka Obiayo, is the last of the quartet to fall for determination, and concerns, on the pleadings, the longest tenure of the four claimants — an alleged twenty-eight years. I have had regard to the reasoning in both companion decisions, consistency between sister appeals arising from a single consolidated trial being a discipline this Court owes to litigants who have fought a common battle on a common record, but I treat neither as binding, this Court sitting in each instance in coordinate rather than appellate relation to itself, and I determine this appeal independently on its own facts.
A Note on the State of the Record
3. Before turning to the merits, an observation on the papers is unavoidable. The Respondent's written submissions filed in this appeal refer throughout, and without exception, to "the Respondent, John Maingi Munywoki" — a person who is not a party to this appeal at all, but the claimant in the separate, though consolidated, Cause No. E430 of 2021. The Appellant's own written submissions are not free of the same difficulty: paragraph 2 recites the Respondent's Statement of Claim as having been filed "in the Mombasa Chief Magistrate's ELRC No. 433 of 2021 between John Maingi Munywoki ... versus ... Naushad Trading Company Limited," and paragraph 4(b) prays for the setting aside of a judgment in "Civil Suit Number 430 of 2021" — again, neither the cause number under appeal.
4. These are, self-evidently, the product of counsel on both sides adapting submissions drawn for one or another of the four consolidated causes without conforming every internal cross-reference to the file actually in hand — an occupational hazard, though not one this Court will excuse lightly, of consolidated, multi-claimant litigation prosecuted and defended by the same firms across several near-identical files. It is, happily, immaterial to the disposal of this appeal: the case number on the cover of both sets of submissions, the parties named in their titles, and the sums claimed, awarded and now contested throughout the body of each document, correspond precisely and without deviation to MC ELRC No. E431 of 2021 and to the Respondent Gerishon Ambaka Obiayo alone. I proceed on that footing, treating the misdirected references to "John Maingi Munywoki" and to Causes Nos. 430 and 433 as slips of the pen to be disregarded, and determine the appeal by reference to the pleadings, evidence and judgment properly relating to the Respondent.
Background to the Claim
5. The Respondent's Statement of Claim, dated 28th June 2021 and filed on 1st July 2021, pleaded that he was employed by the Appellant as a loader "from 1993" until 10th January 2021, earning "approximately Kshs 30,000" per month. It is notable, and bears on an issue considered later in this judgment, that despite pleading a monthly wage of Kshs 30,000 in the body of the claim, every head of relief thereafter computed — house allowance at Kshs 3,825 per month, being fifteen per cent of Kshs 25,500; service pay at a daily rate of Kshs 850; and compensation calculated at Kshs 25,500 by twelve months — proceeds instead on a monthly figure of Kshs 25,500. The same Kshs 25,500 figure, and no other, was subsequently deposed to in the Respondent's witness statement, without explanation anywhere on the record for the discrepancy with the Kshs 30,000 pleaded at the outset. The claim was, in other words, internally inconsistent as to the Respondent's own wage from its very first articulation, a matter to which I return in addressing quantum.
6. The Respondent further pleaded that he had worked continuously and without incident for over two decades; that he was never issued a warning letter or subjected to discipline; that he was never paid house allowance; and that he was not registered with the National Social Security Fund ("NSSF") between January 1993 and April 2011. His witness statement added the circumstances of his termination: that he proceeded on annual leave on 8th December 2020, reported for duty on Monday, 10th January 2021, and was denied entry at the gate, the security guard informing him that his services had been terminated and that new casual workers had been engaged; that his name did not appear on the list of persons authorised to enter the premises; that he sought audience with the manager and was refused; and that he later learned that three named colleagues — John Maingi Munywoki, Herbert Mmbwanga Chomulose and Charles Kaunda Munywoki, the claimants in the three companion causes — had likewise been terminated.
7. The Appellant's Statement of Response, dated 30th July 2021, denied the existence of any employment relationship whatsoever. Its case, supported by the witness statements of its administrator, Khatau Mahmood, and of one Christopher Enock, described as the "gang leader" of a pool of casual dock-workers colloquially known as "sogis," was that the Respondent was never on its payroll; that he was one of a number of handymen whom Mr Enock would summon as work required, to load or offload cargo at the Appellant's go-downs; that payment was made per bag or per task to the gang leader, who distributed it among those he had called upon; that the Respondent was at liberty to decline work or seek it elsewhere; and that any NSSF contributions remitted in the Respondent's name were made only because the Fund had directed the Appellant to do so, and did not of themselves create an employment relationship.
8. By consent recorded on 5th February 2025, the parties agreed to dispense with oral evidence and to have the matter determined under Rule 59 of the Employment and Labour Relations Court (Procedure) Rules, 2016, on the documents, witness statements and written submissions filed. Written submissions followed: for the Respondent on 14th March 2025, and for the Appellant on 19th March 2025.
The Trial Court's Judgment
9. The trial court identified the issues for determination as whether the Respondent was an employee of the Appellant, whether he had proved his claim, and whether the individual heads of claim had been established. On the first issue, the court had regard to the NSSF statement produced by the Respondent, showing uninterrupted remittances in his name for the period 2011 to 2020, and to the "Sogis Daily Record" produced by the Appellant, covering only the period 2nd to 30th September 2019, together with a master roll for 2021. Recording that the Appellant had neither denied the Respondent's averment that he was employed by it, nor stated when it had first engaged his services, the trial court held that "the claimant's case that he was employed by the respondent as a loader from 1998 to 18.1.2021" was established, and that his contract of service accordingly fell to be treated, by operation of section 37 of the Employment Act, 2007, as one in which wages were payable monthly.
10. It is necessary to record, with respect, that the tenure so found — "1998 to 18.1.2021" — is not the Respondent's own pleaded or testified case at all. The Respondent's Statement of Claim and witness statement are consistent and unambiguous that his engagement ran from January 1993, not 1998, to 10th January 2021, not 18th January 2021. The dates "1998 to 18.1.2021," by contrast, correspond precisely to the evidence of John Maingi Munywoki, the claimant in the companion Cause No. E430 of 2021, tried together with the present cause. It appears, with respect, that the trial court, having four consolidated files before it, inadvertently transposed the tenure of one claimant onto the judgment concerning another. No ground of this appeal isolates the slip in those terms, and, for reasons developed below, it is ultimately immaterial to the result, since the Respondent's own account of a still longer engagement, independently corroborated by the NSSF statement, if anything, strengthens rather than weakens the finding that a lengthy and continuous relationship existed. The observation is made for completeness, and as a caution on the particular care demanded when consolidated causes involving similarly situated claimants are determined together.
11. On the question of termination, the trial court found that, there being no evidence before it of the process by which the Respondent's engagement was brought to an end, the termination was unlawful and unfair. On quantum, the court noted that the Appellant's own wage records showed the Respondent receiving variable daily sums, yet found the pleaded monthly wage of Kshs 25,500 "reasonable" and adopted it, awarding one month's pay in lieu of notice (Kshs 25,500), house allowance limited to a three-year period by reason of the statutory limitation (Kshs 137,700), and compensation equivalent to ten months' wages (Kshs 255,000), while declining service pay on the footing that the Respondent, being registered with the NSSF, fell within the statutory exclusion. Judgment was entered for Kshs 418,200 in aggregate, with interest at court rates from the date of filing suit, costs, and an order for a certificate of service within forty-five days.
The Grounds of Appeal
12. Aggrieved, the Appellant filed a Memorandum of Appeal dated 7th January 2026 advancing twelve grounds, which may be grouped, without doing violence to their sense, under four heads. First, that no employer-employee relationship existed at all, the Respondent having been engaged on a piece-rate, need-based basis through a gang leader, and that the trial court misapplied section 37 of the Employment Act to convert that engagement to monthly employment absent evidence meeting the specific criteria of that section, placing undue and conclusive weight on NSSF remittances and length of association while failing properly to weigh the Appellant's own documentary evidence of daily, intermittent engagement (grounds 1 to 4). Second, that unfair termination was found absent proof that termination occurred at the Appellant's instance, and that the evidential burden under section 47(5) of the Employment Act was shifted to the Appellant prematurely (grounds 5 and 6). Third, that compensation was fixed without regard to the factors in section 49(4) of the Employment Act and was, at ten months, excessive and punitive (grounds 7 and 8). Fourth, that the monthly wage of Kshs 25,500 and the consequential house allowance were adopted without evidential or arithmetic foundation, and that the reliefs generally were neither strictly proved nor consistent with the nature of the engagement found (grounds 9 to 12). The Appellant prays that the appeal be allowed and the claim dismissed, or, failing that, that the findings of unfair termination and the awards of compensation and house allowance be set aside, or the quantum substantially reduced, with costs.
The Respondent's Opposition
13. The Respondent opposes the appeal on substantially the following footing: that section 37 was correctly applied given his uncontroverted account of an engagement spanning decades, corroborated by continuous NSSF remittances from 2011 and by the Appellant's own contemporaneous email of 18th November 2021 to NSSF officials, in which the Appellant's administrator acknowledged that "in the year 2011 we were advised by your office to remit their contributions" and that the Appellant retained wage records only "for the past five years" — a document said to sit uneasily with the Appellant's stance that no employment relationship, of any duration, ever existed; that the trial court did not treat NSSF remittance as conclusive in isolation but weighed it together with the length of association, the Appellant's own attendance records, and the complete absence of any evidence of a lawful process of termination; that the evidential burden shifted to the Appellant once the Respondent gave prima facie, and entirely unrebutted, evidence of exclusion from the Appellant's premises; and that an award of ten months, being below the statutory ceiling of twelve months under section 49(1)(c) of the Employment Act, has not been shown to rest on any wrong principle. The Respondent prays that the appeal be dismissed with costs and the trial court's judgment upheld in full.
This Court's Duty on First Appeal
14. This being a first appeal, it falls to this Court to re-evaluate and re-analyse the evidence on the record and to reach its own independent conclusions of fact and law, mindful that, the matter having proceeded under Rule 59 without oral evidence, neither party enjoys any advantage of demeanour or credibility assessed by the trial court that this Court cannot equally assess from the same papers (Selle & Another v Associated Motor Boat Company Ltd & Others [1968] EA 123; Abok James Odera t/a A.J. Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates [2013] eKLR). I would add only this: a dispute in which the parties advance starkly irreconcilable accounts of the very nature of their relationship — one asserting three decades of monthly salaried employment, the other an occasional, task-based engagement through an intermediary — is not, in the ordinary case, ideally suited to disposal on paper alone, credibility very often being decisive in disputes of this character. That said, the parties consented to that course, no ground of appeal impugns it, and it is not now open to either to resile from a procedure adopted by consent; I proceed to determine the appeal on the record as constituted.
The Questions Arising
15. Four questions arise for determination: first, whether section 37 of the Employment Act was properly invoked; second, whether, independently of section 37, an employer-employee relationship existed between the parties; third, whether the termination of that relationship was unfair; and fourth, whether the quantum awarded — the wage adopted, and the notice pay, house allowance and compensation calculated from it — was correctly arrived at.
On Section 37 of the Employment Act
16. Section 37 operates upon a "casual employee" — a term of art under section 2 of the Act denoting an employee engaged for work on a daily basis and paid at the completion of each day's work — and deems such an employee's contract to be one of monthly wages, importing the notice provisions of section 35(1)(c), where the aggregate period worked is not less than one month or the work performed cannot reasonably be completed within an aggregate of three months.
17. Neither party's pleadings invited that characterisation. The Respondent's case, from the Statement of Claim onward, was that he was employed under an oral agreement of permanent, continuous, monthly-salaried employment from 1993 — not that he began as a casual employee whose engagement later matured by operation of law. The Appellant, for its part, denied that the Respondent was a casual employee, or any kind of employee, at all. Section 37 was accordingly neither pleaded, nor the subject of evidence directed to its specific statutory criteria, nor squarely argued before judgment; a court is not at liberty to found a decision on a statutory mechanism that neither litigant placed in issue or had a fair opportunity to meet. To this extent, ground 2 of the appeal succeeds: the trial court's invocation of section 37 was misdirected. That conclusion does not, however, disturb the ultimate finding that the Respondent was an employee, that finding falling now to be tested independently, on ordinary principles, below.
The True Character of the Relationship
18. Whether a person is engaged under a contract of service, as opposed to a contract for service, is not resolved by any single decisive test but by an assessment of the whole relationship, there being, as this Court explained in Christine Adot Lopeyio v Wycliffe Mwathi Pere [2013] eKLR, no agreed formula and every case turning on its own facts. Four recognised indicia assist that assessment: the control test, asking whether the engaging party commands not merely the result but the manner and means of the work; the integration test, asking whether the worker's function forms part and parcel of the engaging party's own business rather than being merely accessory to it; the test of economic or business reality, asking whether the worker carries the risk of profit and loss as one in business on his own account; and mutuality of obligation, asking whether the parties maintain, over time, reciprocal commitments to offer and to accept work.
19. The Appellant's difficulty is that its own case does not sit easily within any single one of these categories, still less establish that the Respondent falls outside a contract of service altogether. Three descriptions are advanced interchangeably — an independent contractor, a piece-rate worker, and a person "engaged under a gang leader" — without the Appellant ever explaining how a single relationship could coherently answer to all three. An independent contractor, properly understood, carries on business on his own account, bears the risk of profit and loss, is ordinarily free to engage his own labour, supplies his own means of work and contracts for a defined result. A piece-rate worker is nothing of the kind: section 2 of the Employment Act defines "piece work" simply as work whose pay is ascertained by the amount performed rather than the time occupied, and section 18 of the Act expressly regulates "a contract of service entered into under which a task or piece-work is to be performed by an employee" — language which presupposes, rather than excludes, employee status; the piece rate is a method of computing wages, not a status outside employment. Engagement "under a gang leader," finally, describes a mode of recruitment and supervision — a labour-gang arrangement long familiar in Mombasa's go-downs, whereby a principal engages an intermediary to muster and direct a pool of workers on its behalf — and says nothing, without more, about where control, integration and the source of remuneration truly lie as between the principal and the individual worker.
20. Having advanced all three characterizations at once, without resolving which, if any, correctly described the Respondent's position, the Appellant left its own case in a state it alone was best placed to clarify, being in exclusive possession of its engagement records, payroll practices and NSSF correspondence. Having failed to remove that ambiguity, it falls to be resolved against the party that created it.
21. As to the "sogi" system itself, described in the witness statements of Christopher Enock and Khatau Mahmood, it does not operate as an automatic shield placing every worker so engaged outside the Employment Act. Where, as the Appellant's own witnesses concede, the engaging company insists on individual NSSF and NHIF registration of the men so engaged, maintains records of who among them is called upon and what each is paid, and does so not for a single engagement but over the better part of a decade, the gang system is better understood as a mode of engagement and supervision than as a device excluding the company from the status of employer.
22. On NSSF remittance, the Appellant correctly observes that no single authority elevates such remittance, by itself, to conclusive proof of employment; the decisions it relies upon — Hezron Ombati Babu v Menengai Oil Refineries Limited [2019] eKLR, David Barasa v British Peace Support Team & Another [2016] eKLR and Asakhulu v West Kenya Sugar Company Limited [2024] KEELRC 705 — each caution against treating such deductions as dispositive in isolation. None, however, lays down an invariable rule divorced from its own facts; each directs attention to the circumstances of the case before it. Here, the Appellant's own email of 18th November 2021 to NSSF officials acknowledges continuous remittance "in the year 2011," and its administrator, Khatau Mahmood, accepts in his witness statement that "there is no way we can remit for them without appearing under the tag employer." Against a decade of registration maintained in the Respondent's individual name, unaccompanied by any deduction record capable of showing that the sums remitted were merely withheld from the sogis' own earnings rather than paid by the Appellant as employer, the NSSF evidence weighs substantially in the Respondent's favour.
23. Weighing the totality of the material — the length and continuity of the Respondent's association with the Appellant on his own uncontroverted account; the Appellant's sustained registration of the Respondent for NSSF purposes across nearly a decade; the absence, from either party, of any document evidencing a discrete, arm's-length engagement of the kind ordinarily struck with an independent contractor; the Appellant's own shifting and unreconciled characterisations of the relationship; and the Appellant's inability to produce engagement records predating September 2019 despite an evident capacity to keep such records — I find, independently of section 37 and on ordinary principles, that the Respondent was at all material times an employee of the Appellant. The trial court's conclusion on this issue, though reached by a route this Court has found wanting, is correct, and grounds 1, 3 and 4 of the appeal accordingly fail.
The Fairness of the Termination
24. It is not seriously disputed, even in the Appellant's own submissions, that no document, record or witness account was placed before the trial court explaining the circumstances in which the Respondent's engagement ended, still less demonstrating compliance with the notification, hearing and valid-reason requirements of sections 41, 43 and 45 of the Employment Act. The Respondent's account — that he was denied entry on return from leave, informed by a security guard that his services had been terminated, and found his name absent from the list of persons authorised to enter — stood entirely unrebutted, no witness having been called by the Appellant to speak to the circumstances of the termination or to justify it. That account amply discharged the modest evidential threshold of section 47(5) of the Employment Act, whereupon the burden shifted to the Appellant to justify the termination — a burden it did not attempt to meet. It is not open to a party that pleaded no employment relationship, and consequently led no evidence of any lawful process by which one might have ended, to complain on appeal that its opposite number failed to prove that a termination occurred at its instance. The trial court's finding of unlawful and unfair termination was correctly arrived at, and grounds 5 and 6 fail.
Quantum
25. It is on quantum that the appeal succeeds in material part, though for reasons distinct from, and not identical to, those which moved this Court in the companion appeal concerning Charles Kaunda Munywoki.
26. The wage figure. The Respondent's own pleaded case as to his earnings is not merely imprecise but internally contradictory: paragraph 3 of the Statement of Claim asserts a monthly wage of "approximately Kshs 30,000," yet every computation that follows in the same document — house allowance, service pay, compensation — proceeds on Kshs 25,500, the figure later deposed to in the witness statement without explanation for the discrepancy. No wage slip, bank record, mobile-money statement or other primary document evidencing actual receipt of either sum was produced. The only documentary evidence of actual payment was the Appellant's "Sogis Daily Record," which the Respondent's own submissions before the trial court accept shows daily payments fluctuating between approximately Kshs 695 and Kshs 3,920 — a range that, whatever it establishes about the character of the engagement, does not yield Kshs 25,500 as a matter of arithmetic, still less the higher figure of Kshs 30,000 pleaded in the claim. The trial court's characterisation of Kshs 25,500 as "reasonable" does not withstand scrutiny once it is recalled that the figure was neither proved by the Respondent's own evidence nor transparently derivable from the Appellant's daily records, and that the Respondent's own pleading could not settle on a single wage in the first place.
27. Where, as here, neither party has discharged the burden of proving the wage actually paid, the Court is not left without recourse; it is entitled, indeed obliged, to arrive at a fair and principled figure rather than accept an unproved and internally inconsistent assertion by default. The Respondent's undisputed occupation was that of a loader, engaged in manual, unskilled cargo-handling labour in Mombasa. In such circumstances the statutory minimum wage prescribed for that class of work furnishes the most reliable available proxy. The Regulation of Wages (General) (Amendment) Order, 2018 (Legal Notice No. 1 of 2019), in force from 1st May 2018 and unrevised until 1st May 2022, prescribed a basic minimum consolidated monthly wage of Kshs 13,572.90 for a general labourer — the cadre properly encompassing a loader in the absence of proof of any specialised trade — within Mombasa City, and it is this figure, applied in the companion appeal concerning Charles Kaunda Munywoki on the same statutory basis, that I adopt here as the fair proxy for the Respondent's earnings. Ground 10 of the appeal accordingly succeeds, and I set aside the figure of Kshs 25,500 in favour of Kshs 13,572.90 per month.
28. Notice pay. One month's wage in lieu of notice is accordingly reduced from Kshs 25,500 to Kshs 13,572.90.
29. House allowance. Section 31(1) of the Employment Act imposes a default obligation on an employer to provide reasonable housing, or a sum in lieu, for each employee; the exception in section 31(2)(a), where a consolidated wage already incorporates a housing element, is an exception properly to be proved by the party invoking it. The Appellant, having produced no written contract of any kind, cannot complain that the Respondent failed to negate consolidation; the burden of establishing it lay with the Appellant, and it made no attempt to discharge that burden. Ground 9 accordingly fails as to entitlement. As to quantum, applying the same fifteen per cent formula both parties invoked before the trial court, and preserving, as unchallenged in principle, the three-year limitation period applied below, house allowance is recomputed at Kshs 13,572.90 × 15% = Kshs 2,035.94 per month, giving Kshs 73,293.84 over thirty-six months, in place of the Kshs 137,700 awarded below.
30. Compensation for unfair termination. Ground 7 complains that the factors in section 49(4) of the Employment Act were not engaged with, and ground 8 that ten months was, in any event, excessive and punitive. This is the one respect in which I decline to follow the course taken in the companion appeal concerning Charles Kaunda Munywoki, where an award of ten months was found excessive for a claimant of some sixteen years' service and reduced to six. The Respondent's tenure here — some twenty-eight years on his own uncontroverted account, longer even than the twenty-six years found in the companion appeal concerning Herbert Mmbwanga Chomulose, where an identical award of ten months was examined and upheld — together with the complete absence of any procedural fairness and the manner of the termination, the Respondent turned away at a gate he had reported to for the better part of three decades, are not distinguishable from Chomulose's case in any respect favourable to the Appellant. A trial court is not required to recite the section 49(4) factors as a checklist; it suffices, as this Court held in the Chomulose appeal, that the circumstances bearing on those factors were in substance before it and considered, and an appellate court will not interfere with a compensation award under section 49 save where it is shown to rest on wrong principle or to be so high or so low as to be erroneous (Ol Pejeta Ranching Limited v David Wanjau Muhoro [2017] eKLR). Measured against a claimant of the longest service among the four consolidated claimants, terminated without a shred of process, an award of ten months — two short of the statutory maximum — is neither excessive nor punitive, and grounds 7 and 8 fail. I accordingly maintain the award at ten months, recomputed only for the substituted wage: Kshs 13,572.90 × 10 = Kshs 135,729.00, in place of the Kshs 255,000 awarded below.
31. Service pay. The trial court's refusal of this head, the Respondent being registered
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1. This is an appeal by Naushad Trading Company Limited ("the Appellant") against the Judgment and Decree of the Chief Magistrate's Court at Mombasa (Hon. J.B. Kalo, Chief Magistrate) delivered on 10th December 2025 in Cause No. E431 of 2021, Gerishon Ambaka Obiayo v Naushad Trading Company Limited, in which the trial court found that the Respondent was an employee of the Appellant, that his employment had been unlawfully and unfairly terminated, and entered judgment in his favour in the sum of Kshs 418,200, together with costs, interest and an order for a certificate of service.
2. The cause from which this appeal arises was one of four tried together at Mombasa, each brought by a different loader against the same Appellant, each turning on the same underlying question: whether men engaged to load and offload cargo at the Appellant's go-downs, paid daily through an intermediary described as a "gang leader," are in law its employees. This Court has already determined two of the three companion appeals arising from that consolidated trial. In Naushad Trading Company Limited v Munywoki [2026] KEELRC 2014(KLR) (concerning a claimant of some sixteen years' service, the appeal succeeded in part, this Court substituting a statutory-minimum wage for the pleaded monthly figure and moderating the compensation awarded. In the appeal concerning Herbert Mmbwanga Chomulose (ELRC Appeal No. E004 of 2026), a claimant of some twenty-six years' service, the appeal was partially successful. The present appeal, concerning the Respondent Gerishon Ambaka Obiayo, is the last of the quartet to fall for determination, and concerns, on the pleadings, the longest tenure of the four claimants — an alleged twenty-eight years. I have had regard to the reasoning in both companion decisions, consistency between sister appeals arising from a single consolidated trial being a discipline this Court owes to litigants who have fought a common battle on a common record, but I treat neither as binding, this Court sitting in each instance in coordinate rather than appellate relation to itself, and I determine this appeal independently on its own facts.
A Note on the State of the Record
3. Before turning to the merits, an observation on the papers is unavoidable. The Respondent's written submissions filed in this appeal refer throughout, and without exception, to "the Respondent, John Maingi Munywoki" — a person who is not a party to this appeal at all, but the claimant in the separate, though consolidated, Cause No. E430 of 2021. The Appellant's own written submissions are not free of the same difficulty: paragraph 2 recites the Respondent's Statement of Claim as having been filed "in the Mombasa Chief Magistrate's ELRC No. 433 of 2021 between John Maingi Munywoki ... versus ... Naushad Trading Company Limited," and paragraph 4(b) prays for the setting aside of a judgment in "Civil Suit Number 430 of 2021" — again, neither the cause number under appeal.
4. These are, self-evidently, the product of counsel on both sides adapting submissions drawn for one or another of the four consolidated causes without conforming every internal cross-reference to the file actually in hand — an occupational hazard, though not one this Court will excuse lightly, of consolidated, multi-claimant litigation prosecuted and defended by the same firms across several near-identical files. It is, happily, immaterial to the disposal of this appeal: the case number on the cover of both sets of submissions, the parties named in their titles, and the sums claimed, awarded and now contested throughout the body of each document, correspond precisely and without deviation to MC ELRC No. E431 of 2021 and to the Respondent Gerishon Ambaka Obiayo alone. I proceed on that footing, treating the misdirected references to "John Maingi Munywoki" and to Causes Nos. 430 and 433 as slips of the pen to be disregarded, and determine the appeal by reference to the pleadings, evidence and judgment properly relating to the Respondent.
Background to the Claim
5. The Respondent's Statement of Claim, dated 28th June 2021 and filed on 1st July 2021, pleaded that he was employed by the Appellant as a loader "from 1993" until 10th January 2021, earning "approximately Kshs 30,000" per month. It is notable, and bears on an issue considered later in this judgment, that despite pleading a monthly wage of Kshs 30,000 in the body of the claim, every head of relief thereafter computed — house allowance at Kshs 3,825 per month, being fifteen per cent of Kshs 25,500; service pay at a daily rate of Kshs 850; and compensation calculated at Kshs 25,500 by twelve months — proceeds instead on a monthly figure of Kshs 25,500. The same Kshs 25,500 figure, and no other, was subsequently deposed to in the Respondent's witness statement, without explanation anywhere on the record for the discrepancy with the Kshs 30,000 pleaded at the outset. The claim was, in other words, internally inconsistent as to the Respondent's own wage from its very first articulation, a matter to which I return in addressing quantum.
6. The Respondent further pleaded that he had worked continuously and without incident for over two decades; that he was never issued a warning letter or subjected to discipline; that he was never paid house allowance; and that he was not registered with the National Social Security Fund ("NSSF") between January 1993 and April 2011. His witness statement added the circumstances of his termination: that he proceeded on annual leave on 8th December 2020, reported for duty on Monday, 10th January 2021, and was denied entry at the gate, the security guard informing him that his services had been terminated and that new casual workers had been engaged; that his name did not appear on the list of persons authorised to enter the premises; that he sought audience with the manager and was refused; and that he later learned that three named colleagues — John Maingi Munywoki, Herbert Mmbwanga Chomulose and Charles Kaunda Munywoki, the claimants in the three companion causes — had likewise been terminated.
7. The Appellant's Statement of Response, dated 30th July 2021, denied the existence of any employment relationship whatsoever. Its case, supported by the witness statements of its administrator, Khatau Mahmood, and of one Christopher Enock, described as the "gang leader" of a pool of casual dock-workers colloquially known as "sogis," was that the Respondent was never on its payroll; that he was one of a number of handymen whom Mr Enock would summon as work required, to load or offload cargo at the Appellant's go-downs; that payment was made per bag or per task to the gang leader, who distributed it among those he had called upon; that the Respondent was at liberty to decline work or seek it elsewhere; and that any NSSF contributions remitted in the Respondent's name were made only because the Fund had directed the Appellant to do so, and did not of themselves create an employment relationship.
8. By consent recorded on 5th February 2025, the parties agreed to dispense with oral evidence and to have the matter determined under Rule 59 of the Employment and Labour Relations Court (Procedure) Rules, 2016, on the documents, witness statements and written submissions filed. Written submissions followed: for the Respondent on 14th March 2025, and for the Appellant on 19th March 2025.
The Trial Court's Judgment
9. The trial court identified the issues for determination as whether the Respondent was an employee of the Appellant, whether he had proved his claim, and whether the individual heads of claim had been established. On the first issue, the court had regard to the NSSF statement produced by the Respondent, showing uninterrupted remittances in his name for the period 2011 to 2020, and to the "Sogis Daily Record" produced by the Appellant, covering only the period 2nd to 30th September 2019, together with a master roll for 2021. Recording that the Appellant had neither denied the Respondent's averment that he was employed by it, nor stated when it had first engaged his services, the trial court held that "the claimant's case that he was employed by the respondent as a loader from 1998 to 18.1.2021" was established, and that his contract of service accordingly fell to be treated, by operation of section 37 of the Employment Act, 2007, as one in which wages were payable monthly.
10. It is necessary to record, with respect, that the tenure so found — "1998 to 18.1.2021" — is not the Respondent's own pleaded or testified case at all. The Respondent's Statement of Claim and witness statement are consistent and unambiguous that his engagement ran from January 1993, not 1998, to 10th January 2021, not 18th January 2021. The dates "1998 to 18.1.2021," by contrast, correspond precisely to the evidence of John Maingi Munywoki, the claimant in the companion Cause No. E430 of 2021, tried together with the present cause. It appears, with respect, that the trial court, having four consolidated files before it, inadvertently transposed the tenure of one claimant onto the judgment concerning another. No ground of this appeal isolates the slip in those terms, and, for reasons developed below, it is ultimately immaterial to the result, since the Respondent's own account of a still longer engagement, independently corroborated by the NSSF statement, if anything, strengthens rather than weakens the finding that a lengthy and continuous relationship existed. The observation is made for completeness, and as a caution on the particular care demanded when consolidated causes involving similarly situated claimants are determined together.
11. On the question of termination, the trial court found that, there being no evidence before it of the process by which the Respondent's engagement was brought to an end, the termination was unlawful and unfair. On quantum, the court noted that the Appellant's own wage records showed the Respondent receiving variable daily sums, yet found the pleaded monthly wage of Kshs 25,500 "reasonable" and adopted it, awarding one month's pay in lieu of notice (Kshs 25,500), house allowance limited to a three-year period by reason of the statutory limitation (Kshs 137,700), and compensation equivalent to ten months' wages (Kshs 255,000), while declining service pay on the footing that the Respondent, being registered with the NSSF, fell within the statutory exclusion. Judgment was entered for Kshs 418,200 in aggregate, with interest at court rates from the date of filing suit, costs, and an order for a certificate of service within forty-five days.
The Grounds of Appeal
12. Aggrieved, the Appellant filed a Memorandum of Appeal dated 7th January 2026 advancing twelve grounds, which may be grouped, without doing violence to their sense, under four heads. First, that no employer-employee relationship existed at all, the Respondent having been engaged on a piece-rate, need-based basis through a gang leader, and that the trial court misapplied section 37 of the Employment Act to convert that engagement to monthly employment absent evidence meeting the specific criteria of that section, placing undue and conclusive weight on NSSF remittances and length of association while failing properly to weigh the Appellant's own documentary evidence of daily, intermittent engagement (grounds 1 to 4). Second, that unfair termination was found absent proof that termination occurred at the Appellant's instance, and that the evidential burden under section 47(5) of the Employment Act was shifted to the Appellant prematurely (grounds 5 and 6). Third, that compensation was fixed without regard to the factors in section 49(4) of the Employment Act and was, at ten months, excessive and punitive (grounds 7 and 8). Fourth, that the monthly wage of Kshs 25,500 and the consequential house allowance were adopted without evidential or arithmetic foundation, and that the reliefs generally were neither strictly proved nor consistent with the nature of the engagement found (grounds 9 to 12). The Appellant prays that the appeal be allowed and the claim dismissed, or, failing that, that the findings of unfair termination and the awards of compensation and house allowance be set aside, or the quantum substantially reduced, with costs.
The Respondent's Opposition
13. The Respondent opposes the appeal on substantially the following footing: that section 37 was correctly applied given his uncontroverted account of an engagement spanning decades, corroborated by continuous NSSF remittances from 2011 and by the Appellant's own contemporaneous email of 18th November 2021 to NSSF officials, in which the Appellant's administrator acknowledged that "in the year 2011 we were advised by your office to remit their contributions" and that the Appellant retained wage records only "for the past five years" — a document said to sit uneasily with the Appellant's stance that no employment relationship, of any duration, ever existed; that the trial court did not treat NSSF remittance as conclusive in isolation but weighed it together with the length of association, the Appellant's own attendance records, and the complete absence of any evidence of a lawful process of termination; that the evidential burden shifted to the Appellant once the Respondent gave prima facie, and entirely unrebutted, evidence of exclusion from the Appellant's premises; and that an award of ten months, being below the statutory ceiling of twelve months under section 49(1)(c) of the Employment Act, has not been shown to rest on any wrong principle. The Respondent prays that the appeal be dismissed with costs and the trial court's judgment upheld in full.
This Court's Duty on First Appeal
14. This being a first appeal, it falls to this Court to re-evaluate and re-analyse the evidence on the record and to reach its own independent conclusions of fact and law, mindful that, the matter having proceeded under Rule 59 without oral evidence, neither party enjoys any advantage of demeanour or credibility assessed by the trial court that this Court cannot equally assess from the same papers (Selle & Another v Associated Motor Boat Company Ltd & Others [1968] EA 123; Abok James Odera t/a A.J. Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates [2013] eKLR). I would add only this: a dispute in which the parties advance starkly irreconcilable accounts of the very nature of their relationship — one asserting three decades of monthly salaried employment, the other an occasional, task-based engagement through an intermediary — is not, in the ordinary case, ideally suited to disposal on paper alone, credibility very often being decisive in disputes of this character. That said, the parties consented to that course, no ground of appeal impugns it, and it is not now open to either to resile from a procedure adopted by consent; I proceed to determine the appeal on the record as constituted.
The Questions Arising
15. Four questions arise for determination: first, whether section 37 of the Employment Act was properly invoked; second, whether, independently of section 37, an employer-employee relationship existed between the parties; third, whether the termination of that relationship was unfair; and fourth, whether the quantum awarded — the wage adopted, and the notice pay, house allowance and compensation calculated from it — was correctly arrived at.
On Section 37 of the Employment Act
16. Section 37 operates upon a "casual employee" — a term of art under section 2 of the Act denoting an employee engaged for work on a daily basis and paid at the completion of each day's work — and deems such an employee's contract to be one of monthly wages, importing the notice provisions of section 35(1)(c), where the aggregate period worked is not less than one month or the work performed cannot reasonably be completed within an aggregate of three months.
17. Neither party's pleadings invited that characterisation. The Respondent's case, from the Statement of Claim onward, was that he was employed under an oral agreement of permanent, continuous, monthly-salaried employment from 1993 — not that he began as a casual employee whose engagement later matured by operation of law. The Appellant, for its part, denied that the Respondent was a casual employee, or any kind of employee, at all. Section 37 was accordingly neither pleaded, nor the subject of evidence directed to its specific statutory criteria, nor squarely argued before judgment; a court is not at liberty to found a decision on a statutory mechanism that neither litigant placed in issue or had a fair opportunity to meet. To this extent, ground 2 of the appeal succeeds: the trial court's invocation of section 37 was misdirected. That conclusion does not, however, disturb the ultimate finding that the Respondent was an employee, that finding falling now to be tested independently, on ordinary principles, below.
The True Character of the Relationship
18. Whether a person is engaged under a contract of service, as opposed to a contract for service, is not resolved by any single decisive test but by an assessment of the whole relationship, there being, as this Court explained in Christine Adot Lopeyio v Wycliffe Mwathi Pere [2013] eKLR, no agreed formula and every case turning on its own facts. Four recognised indicia assist that assessment: the control test, asking whether the engaging party commands not merely the result but the manner and means of the work; the integration test, asking whether the worker's function forms part and parcel of the engaging party's own business rather than being merely accessory to it; the test of economic or business reality, asking whether the worker carries the risk of profit and loss as one in business on his own account; and mutuality of obligation, asking whether the parties maintain, over time, reciprocal commitments to offer and to accept work.
19. The Appellant's difficulty is that its own case does not sit easily within any single one of these categories, still less establish that the Respondent falls outside a contract of service altogether. Three descriptions are advanced interchangeably — an independent contractor, a piece-rate worker, and a person "engaged under a gang leader" — without the Appellant ever explaining how a single relationship could coherently answer to all three. An independent contractor, properly understood, carries on business on his own account, bears the risk of profit and loss, is ordinarily free to engage his own labour, supplies his own means of work and contracts for a defined result. A piece-rate worker is nothing of the kind: section 2 of the Employment Act defines "piece work" simply as work whose pay is ascertained by the amount performed rather than the time occupied, and section 18 of the Act expressly regulates "a contract of service entered into under which a task or piece-work is to be performed by an employee" — language which presupposes, rather than excludes, employee status; the piece rate is a method of computing wages, not a status outside employment. Engagement "under a gang leader," finally, describes a mode of recruitment and supervision — a labour-gang arrangement long familiar in Mombasa's go-downs, whereby a principal engages an intermediary to muster and direct a pool of workers on its behalf — and says nothing, without more, about where control, integration and the source of remuneration truly lie as between the principal and the individual worker.
20. Having advanced all three characterizations at once, without resolving which, if any, correctly described the Respondent's position, the Appellant left its own case in a state it alone was best placed to clarify, being in exclusive possession of its engagement records, payroll practices and NSSF correspondence. Having failed to remove that ambiguity, it falls to be resolved against the party that created it.
21. As to the "sogi" system itself, described in the witness statements of Christopher Enock and Khatau Mahmood, it does not operate as an automatic shield placing every worker so engaged outside the Employment Act. Where, as the Appellant's own witnesses concede, the engaging company insists on individual NSSF and NHIF registration of the men so engaged, maintains records of who among them is called upon and what each is paid, and does so not for a single engagement but over the better part of a decade, the gang system is better understood as a mode of engagement and supervision than as a device excluding the company from the status of employer.
22. On NSSF remittance, the Appellant correctly observes that no single authority elevates such remittance, by itself, to conclusive proof of employment; the decisions it relies upon — Hezron Ombati Babu v Menengai Oil Refineries Limited [2019] eKLR, David Barasa v British Peace Support Team & Another [2016] eKLR and Asakhulu v West Kenya Sugar Company Limited [2024] KEELRC 705 — each caution against treating such deductions as dispositive in isolation. None, however, lays down an invariable rule divorced from its own facts; each directs attention to the circumstances of the case before it. Here, the Appellant's own email of 18th November 2021 to NSSF officials acknowledges continuous remittance "in the year 2011," and its administrator, Khatau Mahmood, accepts in his witness statement that "there is no way we can remit for them without appearing under the tag employer." Against a decade of registration maintained in the Respondent's individual name, unaccompanied by any deduction record capable of showing that the sums remitted were merely withheld from the sogis' own earnings rather than paid by the Appellant as employer, the NSSF evidence weighs substantially in the Respondent's favour.
23. Weighing the totality of the material — the length and continuity of the Respondent's association with the Appellant on his own uncontroverted account; the Appellant's sustained registration of the Respondent for NSSF purposes across nearly a decade; the absence, from either party, of any document evidencing a discrete, arm's-length engagement of the kind ordinarily struck with an independent contractor; the Appellant's own shifting and unreconciled characterisations of the relationship; and the Appellant's inability to produce engagement records predating September 2019 despite an evident capacity to keep such records — I find, independently of section 37 and on ordinary principles, that the Respondent was at all material times an employee of the Appellant. The trial court's conclusion on this issue, though reached by a route this Court has found wanting, is correct, and grounds 1, 3 and 4 of the appeal accordingly fail.
The Fairness of the Termination
24. It is not seriously disputed, even in the Appellant's own submissions, that no document, record or witness account was placed before the trial court explaining the circumstances in which the Respondent's engagement ended, still less demonstrating compliance with the notification, hearing and valid-reason requirements of sections 41, 43 and 45 of the Employment Act. The Respondent's account — that he was denied entry on return from leave, informed by a security guard that his services had been terminated, and found his name absent from the list of persons authorised to enter — stood entirely unrebutted, no witness having been called by the Appellant to speak to the circumstances of the termination or to justify it. That account amply discharged the modest evidential threshold of section 47(5) of the Employment Act, whereupon the burden shifted to the Appellant to justify the termination — a burden it did not attempt to meet. It is not open to a party that pleaded no employment relationship, and consequently led no evidence of any lawful process by which one might have ended, to complain on appeal that its opposite number failed to prove that a termination occurred at its instance. The trial court's finding of unlawful and unfair termination was correctly arrived at, and grounds 5 and 6 fail.
Quantum
25. It is on quantum that the appeal succeeds in material part, though for reasons distinct from, and not identical to, those which moved this Court in the companion appeal concerning Charles Kaunda Munywoki.
26. The wage figure. The Respondent's own pleaded case as to his earnings is not merely imprecise but internally contradictory: paragraph 3 of the Statement of Claim asserts a monthly wage of "approximately Kshs 30,000," yet every computation that follows in the same document — house allowance, service pay, compensation — proceeds on Kshs 25,500, the figure later deposed to in the witness statement without explanation for the discrepancy. No wage slip, bank record, mobile-money statement or other primary document evidencing actual receipt of either sum was produced. The only documentary evidence of actual payment was the Appellant's "Sogis Daily Record," which the Respondent's own submissions before the trial court accept shows daily payments fluctuating between approximately Kshs 695 and Kshs 3,920 — a range that, whatever it establishes about the character of the engagement, does not yield Kshs 25,500 as a matter of arithmetic, still less the higher figure of Kshs 30,000 pleaded in the claim. The trial court's characterisation of Kshs 25,500 as "reasonable" does not withstand scrutiny once it is recalled that the figure was neither proved by the Respondent's own evidence nor transparently derivable from the Appellant's daily records, and that the Respondent's own pleading could not settle on a single wage in the first place.
27. Where, as here, neither party has discharged the burden of proving the wage actually paid, the Court is not left without recourse; it is entitled, indeed obliged, to arrive at a fair and principled figure rather than accept an unproved and internally inconsistent assertion by default. The Respondent's undisputed occupation was that of a loader, engaged in manual, unskilled cargo-handling labour in Mombasa. In such circumstances the statutory minimum wage prescribed for that class of work furnishes the most reliable available proxy. The Regulation of Wages (General) (Amendment) Order, 2018 (Legal Notice No. 1 of 2019), in force from 1st May 2018 and unrevised until 1st May 2022, prescribed a basic minimum consolidated monthly wage of Kshs 13,572.90 for a general labourer — the cadre properly encompassing a loader in the absence of proof of any specialised trade — within Mombasa City, and it is this figure, applied in the companion appeal concerning Charles Kaunda Munywoki on the same statutory basis, that I adopt here as the fair proxy for the Respondent's earnings. Ground 10 of the appeal accordingly succeeds, and I set aside the figure of Kshs 25,500 in favour of Kshs 13,572.90 per month.
28. Notice pay. One month's wage in lieu of notice is accordingly reduced from Kshs 25,500 to Kshs 13,572.90.
29. House allowance. Section 31(1) of the Employment Act imposes a default obligation on an employer to provide reasonable housing, or a sum in lieu, for each employee; the exception in section 31(2)(a), where a consolidated wage already incorporates a housing element, is an exception properly to be proved by the party invoking it. The Appellant, having produced no written contract of any kind, cannot complain that the Respondent failed to negate consolidation; the burden of establishing it lay with the Appellant, and it made no attempt to discharge that burden. Ground 9 accordingly fails as to entitlement. As to quantum, applying the same fifteen per cent formula both parties invoked before the trial court, and preserving, as unchallenged in principle, the three-year limitation period applied below, house allowance is recomputed at Kshs 13,572.90 × 15% = Kshs 2,035.94 per month, giving Kshs 73,293.84 over thirty-six months, in place of the Kshs 137,700 awarded below.
30. Compensation for unfair termination. Ground 7 complains that the factors in section 49(4) of the Employment Act were not engaged with, and ground 8 that ten months was, in any event, excessive and punitive. This is the one respect in which I decline to follow the course taken in the companion appeal concerning Charles Kaunda Munywoki, where an award of ten months was found excessive for a claimant of some sixteen years' service and reduced to six. The Respondent's tenure here — some twenty-eight years on his own uncontroverted account, longer even than the twenty-six years found in the companion appeal concerning Herbert Mmbwanga Chomulose, where an identical award of ten months was examined and upheld — together with the complete absence of any procedural fairness and the manner of the termination, the Respondent turned away at a gate he had reported to for the better part of three decades, are not distinguishable from Chomulose's case in any respect favourable to the Appellant. A trial court is not required to recite the section 49(4) factors as a checklist; it suffices, as this Court held in the Chomulose appeal, that the circumstances bearing on those factors were in substance before it and considered, and an appellate court will not interfere with a compensation award under section 49 save where it is shown to rest on wrong principle or to be so high or so low as to be erroneous (Ol Pejeta Ranching Limited v David Wanjau Muhoro [2017] eKLR). Measured against a claimant of the longest service among the four consolidated claimants, terminated without a shred of process, an award of ten months — two short of the statutory maximum — is neither excessive nor punitive, and grounds 7 and 8 fail. I accordingly maintain the award at ten months, recomputed only for the substituted wage: Kshs 13,572.90 × 10 = Kshs 135,729.00, in place of the Kshs 255,000 awarded below.
31. Service pay. The trial court's refusal of this head, the Respondent being registered
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