Introduction

Many employers in Kenya grapple with the issue of structuring their employment contract to match the unique needs of their operations. Some employers will opt to engage employees on a casual basis where the work they are required to do is not long term or is dependent on several variable factors such as availability of funding. 

Definition of terms and Court Decisions

Section 2 of the Employment Act defines a casual employee as one whose engagement provides for payment at the end of the day and who is not engaged for more than 24 hours at a time. The Act contains other provisions from which the characteristics of a casual employee per se can be inferred as follows:

• Wages of a casual employee are due at the end of the day – Section 18 (2) (a)
• An employer is not obligated to provide an itemized pay statement (pay slip) to a casual employee – Section 20 (3).

Perhaps anticipating that business realities may require variation of the terms of a casual engagement, the law makers included Section 37 (1) of the Act which provides for conversion of casual engagement to regular/open ended employment in the following circumstances:

• Where the casual employee works for a continuous number of days which aggregate to at least 1 month at which point the converted employees are entitled to be paid wages monthly and issued with at least one month’s notice of termination of employment 
• Where the casual employee is engaged for work that cannot reasonably be expected to be completed within an aggregate period of 3 months, at which point they are fully converted to regular employes

The Court of Appeal in Kenyatta University v Thomas & 25 others (Civil Appeal E494 of 2022) [2025] KECA 1014 (KLR) dealt with the issue of engagement of employees on a casual basis and the circumstances in which casual employment may be converted into regular/open ended employment under Section 37 of the Act. 

In the Kenyatta University Case, the court considered the facts including that the University had engaged several employees including the 26 that had filed the suit in court on a casual basis. The University argued that this had been done as part of austerity measures to ensure prudent spending of the public funds that are used to run its operations. Therefore, the University opted to engage employees that did not perform core functions (teaching and administration) on casual basis. This included the 26 employees who were engaged as electricians, masons, painters, carpenters etc. 

The Court, however, noted that the employees had been engaged for several years at a time and tax returns produced by them showed that in 2017 they had been engaged continuously for aggregate periods ranging between 9 to 11 months at a time albeit with some short breaks. This arrangement by the University had been in place with the 26 employees for several years, with some going up to 20 years. The Court was of the view that this certainly converted casual employment to regular/open ended terms of employment under the Act and was of the view that the short breaks in between the periods of engagement were immaterial. In making this finding the court held that:

Short breaks between the engagements would not change the fact that the University engaged the respondents on casual basis for considerable long periods of time, and any short breaks in between would not change the true character of the arrangement. To hold otherwise would encourage crafty employers to simply impose artificial breaks in this type of arrangement so as to go round the rigours and reality of section 37 of the Act.

While appreciating the core needs of the University did not allow for engagement of the employees on ‘permanent and pensionable’ terms, the Court noted that the University could have structured the contracts in a different manner that is compliant with the provisions of the Act and approved the finding of the trial court that “ nothing stopped the respondents (now the appellant) from issuing the petitioners with written terms of employment for fixed term contract or seasonal contracts, place work contracts or as the case demanded’’.

The foregoing meant that the Court of Appeal agreed with the findings of the Employment and Labour Relations Court on the conversion of the contracts of the 26 employees from casual terms to regular/open ended employment and the University’s appeal failed to that extent. 

Nevertheless, the University was partially successful in the appeal as the Court held that the conversion could only apply to the 26 employees that were parties to the litigation and not to other staff as the case was not a representative one and no orders for conversion in rem had been sought. 

Regarding a claim for overtime pay for the duration of the engagement with the employees (spanning 11 to 20 years), the Court relied on the provisions of Section 53 of the Labour Institutions Act and Section 74 of the Employment Act in limiting the grant of the order for payment of these claims to 3 years before the suit was filed. 

Conclusion

This decision of the Court of Appeal, which is binding on the Employment & Labour Relations Court, sheds new light on the engagement of employees on a casual basis and on conversion of such engagements to regular terms. Employers must therefore be careful to ensure proper and legally compliant structuring of their contracts of employment depending on their individual business concerns. 

For more information on this please contact us on nairobi@mmkadv.co.ke