Casual vs. Contract: When Does a ‘Helper’ Become a Permanent Employee?

7 Minutes Read

It is a scenario we see frequently in Thika, Kiambu, and across the “upcountry” agricultural belts. You hire a “helper” for your farm, a caretaker for your rental units, or an assistant for your hardware shop. The arrangement is simple, verbal, and seemingly efficient: “Come when there is work, and I will pay you at the end of the day.”

For many learned middle-class employers—landlords, business owners, and farmers—this flexibility is the lifeblood of operations. You don’t want the administrative burden of NSSF, SHIF, and Housing Levy for someone who just cuts the grass or loads trucks.

But under Kenyan law, this informality is a ticking time bomb. The line between a casual vs permanent employee is not drawn by what you call them; it is drawn by how they work.

At Waweru Nyambura Law, we believe in using modern legal strategies to protect your progress. Today, we are conducting a deep dive into Section 37 of the Employment Act, the relevant Court of Appeal decisions, and—crucially—the legal exceptions that might just save your business from a heavy lawsuit.

The Statutory Base: Defining the “Casual”

To understand the risk, we must first look at the strict definition. Section 2 of the Employment Act, 2007 defines a casual employee as:

“A person the terms of whose engagement provide for his payment at the end of each day and who is not engaged for a longer period than twenty-four hours at a time.”

Casual vs Permanent Employee: The Conversion Trap

This is where most employers stumble. Section 37(1) of the Act introduces the “Conversion Clause.” It dictates that a casual employment relationship automatically converts into a term contract (either fixed-term or permanent) if:

1. The employee works for a period of one month or more continuously; or
2. The work performed cannot reasonably be expected to be completed within a period of three months.

If your casual worker triggers either of these thresholds, they are entitled to a written contract, statutory deductions, leave days, and—most critically—notice before termination.

Case Law Analysis: The “Rich Legalese”

The courts have been ruthless in enforcing this. It is not enough to simply claim ignorance.

1. The Precedent: Kenyatta University v Esther Njeri Maina [2022] eKLR

In this landmark Court of Appeal decision, the court dealt with workers who had been kept on rolling casual contracts for years. The employer argued that since the contracts were renewed monthly, they remained casuals.

The Court disagreed. They applied the principle of “Legitimate Expectation.” The court held that the continuous nature of the work created an expectation of employment. The ruling solidified that you cannot use “casual” status to escape the obligations of a permanent employer (Section 41 notification and hearing rights).

2. The Test of Continuity: Davnet Ojugo v Compassion International [2016]

Here, the Employment and Labour Relations Court (ELRC) emphasized that the reality of the relationship supersedes the title. Even if you call them a “Casual Cleaner,” if they report to work at 8:00 AM and leave at 5:00 PM every day for three months, they are employees.

The Exceptions: Is There a Way Out?

This is the nuance that many general articles miss. Is every casual worker a future lawsuit? Not necessarily. There are legal exceptions and defenses, but they require strict adherence to the law.

Exception 1: The “Intermittent” Defense

Section 37 hinges on the word “continuously.” If your worker truly works on an irregular basis—for example, a plumber who comes only when a pipe bursts, or a farmhand who comes only during harvest season (2 days a week)—the “continuity” is broken.

• Strategy: Ensure their schedule is erratic and documented as such. If they work Monday to Friday, 8-5, you lose this defense.

Exception 2: The “24-Hour” Reset

Strictly speaking, if a worker is paid daily and engaged for a specific task that ends that day, and there is a genuine break before they are rehired, they remain casual.

• Risk: However, if you rehire the same person the next morning, every morning, for 30 days, the court views this as a scheme to defeat Section 37.

Exception 3: Section 37(3) – The Written Casual Contract

There is a lesser-known provision in Section 37(3). A casual worker can work for longer than one month if:

“The casual employee is engaged in work which cannot reasonably be expected to be completed within a period of three months…”

AND you have a specific written contract limiting the engagement. However, this is a very thin tightrope to walk and usually requires the work to be project-specific (e.g., a construction project), not operational (e.g., a shop attendant).

The “Upcountry” Reality Check

Let’s apply this to the specific scenarios we see in Kiambu and Murang’a:

The Cost of Non-Compliance

Why does this matter? Because when you fire that “casual” farmhand after a dispute, they can sue for Unfair Termination. Under Section 49 of the Employment Act, the damages can include:

1. 12 Months’ Gross Salary as compensation.
2. Payment in lieu of notice (usually 1 month).
3. Unpaid Leave days (21 days per year worked).
4. Unpaid Public Holidays worked.

For a worker earning Ksh 15,000, a simple firing could cost you over Ksh 250,000 in court awards.

Practical Steps: How to Protect Your Interests

We are modern litigators; we prefer prevention over cure. Here is how to audit your workforce today:

1. The “30-Day” Audit: Check your records. Who has been coming in every day for the last month?
2. Formalize or Fragment:
   • If you need them daily: Give them a Fixed-Term Contract. It limits your liability to the contract period (e.g., 6 months).
   • If you don’t need them daily: strictly enforce a roster where they work less than 24 continuous hours and have genuine breaks in service.
3. Stop Monthly Payments for Casuals: If you pay monthly, you must deduct statutory taxes. If you want them to remain casual, pay daily.
4. Get a “Casual Labourer Clause” Review: Have a lawyer review your engagement forms. A simple disclaimer signed by the worker acknowledging their casual status can help (though it is not a magic bullet against the statute).

Conclusion

Modern employment law is about fairness, but it is also about documentation. You cannot have the benefit of a permanent worker with the flexibility of a casual one. Whether you are running a hardware store in Thika or managing a family farm, the Employment Act applies to you.

Don’t wait for a demand letter to fix your payroll.

Need a Fixed-Term Contract template or a compliance review?
[Book a Consult] with Waweru Nyambura Law today. We use modern systems to review your employment risks quickly and affordably.