Introduction
Casual employment gives Kenyan businesses valuable flexibility.
An employer may need extra workers to support a sudden increase in production, offload a delivery, complete a stock count, cover an employee’s absence, manage a seasonal peak or deliver a short-term assignment.
In these circumstances, engaging workers on a day-to-day basis may be commercially practical.
The risk begins when a temporary arrangement quietly becomes a regular employment relationship.
A worker who was initially required for three days may continue reporting for several weeks. A seasonal worker may remain after the peak season ends. A warehouse assistant may appear on every weekly roster. A factory worker may perform the same duties as permanent employees for months while continuing to be described and paid as a casual.
At that point, employers need to ask:
Is this person still genuinely a casual worker, or has the employment relationship converted into a term contract under Kenyan law?
This question is addressed primarily by Section 37 of the Employment Act, 2007.
Section 37 is one of the most important—and frequently misunderstood—provisions governing casual workers in Kenya. It protects employees from being retained indefinitely under day-to-day arrangements when the reality of their employment has become continuous.
It also protects responsible employers by providing a framework for determining when an employment arrangement should be reviewed and regularised.
The Short Answer
Casual employment may convert into a term contract where:
Once the conditions under Section 37(1) are met, the contract is deemed to be one where wages are paid monthly, and the notice provisions applicable to monthly-paid employment become relevant.
Where the converted employee works continuously for two months or more from the date they were initially engaged as a casual employee, Section 37(3) provides that the employee becomes entitled to the terms and conditions they would have received under the Employment Act had they not initially been employed as a casual.
However, this should not be reduced to the overly simplistic statement that every casual employee automatically becomes a permanent employee after thirty calendar days.
The actual working arrangement, continuity, nature of the work and available evidence must be examined.
Who Is a Casual Employee Under Kenyan Law?
Before considering conversion, an employer must first determine whether the worker was genuinely engaged as a casual employee.
The Employment Act defines a casual employee as a person:
These elements are important.
A worker is not necessarily a casual employee simply because:
The true nature of the relationship is determined by how the person actually works and is paid.
If a worker is paid weekly or monthly, appears on a regular roster, performs continuous duties and has an ongoing expectation of work, the arrangement may already fall outside the strict statutory definition of casual employment.
What Section 37 of the Employment Act Provides
Section 37 contains several related protections.
Section 37(1): Conversion to monthly-paid employment
A casual employee’s contract is deemed to be one where wages are paid monthly where either of the two conversion triggers is met.
The first trigger concerns the duration and continuity of the working days.
The second concerns the nature and expected duration of the work.
Section 37(2): Treatment of rest days and public holidays
When calculating continuous working days, the Act recognises a paid rest day after six continuous working days.
A rest day or public holiday falling within the relevant period should therefore not necessarily be treated as a break that defeats continuity.
Section 37(3): Entitlement to statutory terms and conditions
Where a casual employee’s contract has converted and the employee continues working for two months or more from the original date of engagement, the employee is entitled to the terms and conditions they would have received under the Employment Act had they not initially been employed as a casual employee.
Section 37(4): Court’s power to vary the terms
In an employment dispute, the Employment and Labour Relations Court has the power to vary the terms of service and declare the employee to be employed on terms consistent with the Employment Act.
Section 37(5): Complaint to a labour officer
A casual employee who is aggrieved by the employer’s treatment may lodge a complaint with a labour officer.
For employers, the key lesson is that conversion does not depend only on whether management has issued a new appointment letter.
It may occur by operation of law.
The Two Main Conversion Triggers
Trigger One: Continuous working days amounting to at least one month
The first test looks at whether the casual employee has worked for a period or number of continuous working days amounting in aggregate to the equivalent of at least one month.
This is commonly described as the “30-day rule.”
However, that description can be misleading.
The Act does not simply state that every casual worker becomes permanent on the thirty-first calendar day after first appearing at the workplace. It refers to the working period, continuity and the aggregate number of working days.
The employer should examine:
For example, a worker engaged for a one-day event and then called again several months later is in a different position from a warehouse assistant who reports every weekday for six weeks.
Trigger Two: Work that cannot reasonably be completed within three months
The second test focuses on the nature of the work rather than only the number of days already worked.
If the employee is performing work that cannot reasonably be expected to be completed within a period, or number of working days amounting in aggregate to three months or more, the casual arrangement may convert.
This prevents employers from describing workers as casual when they are recruited for work that is inherently longer-term.
Examples may include:
The relevant question is not merely how long the employee has worked so far.
The employer should also consider how long the work could reasonably have been expected to continue when the employee was engaged.
Does Section 37 Convert Casual Employment Automatically?
Where the statutory conditions are established, conversion can occur by operation of law.
The employer does not avoid conversion simply because:
The Court of Appeal in Nanyuki Water & Sewage Company Limited v Benson Mwiti Ntiritu & 4 Others upheld the application of Section 37 where the employees’ working arrangements had satisfied the statutory tests.
Their casual employment was treated as having converted into monthly-paid contracts, bringing the relevant statutory terms and protections into play.
This means that an employer’s failure to recognize the conversion does not necessarily prevent it from having occurred.
Conversion to a Term Contract Does Not Always Mean Automatic Permanent Employment
Employers and employees frequently ask whether a casual worker becomes permanent after one month.
The legally accurate answer is more nuanced.
Section 37(1) expressly states that the contract is deemed to be one where wages are paid monthly and that Section 35(1)(c), dealing with notice for monthly-paid employment, applies.
Section 37(3) extends statutory terms and conditions to an employee who continues working for two months or more after initially being engaged as a casual.
In some cases, the courts have described the resulting relationship as one that has “assumed permanency.” In other cases, the appropriate conclusion is that the worker’s employment converted from casual to a regular term contract.
Whether the employee should ultimately be treated as permanent, fixed-term, project-based or otherwise regularised will depend on:
Therefore, employers should avoid two opposite mistakes:
A proper employment-status review is required.
The 2026 Court of Appeal Development Employers Should Know
In July 2026, the Court of Appeal delivered an important decision in Kenya County Government Workers’ Union v Embu County Government & Another.
The dispute involved employees who had served for extended periods under casual or successive short-term arrangements while performing work that was permanent and continuous in nature.
Some of the workers had served for many years.
The Court examined the practical reality of the employment relationship instead of relying solely on the labels contained in the employment documents. It found that the long and continuous service entitled the affected employees to statutory protection and ordered the regularisation of their employment terms.
The case reinforces an important principle:
The label attached to an employment relationship will not necessarily prevail where the actual nature, duration and continuity of the work show something different.
However, the decision should not be interpreted to mean that every fixed-term contract or every renewal is automatically unlawful.
Fixed-term employment remains recognized in Kenya. It can be appropriate where there is:
The risk is higher where short-term contracts are repeatedly renewed for years while the employee performs permanent, continuing and integral duties.
Employers must be able to explain the genuine business reason for the selected employment model.
Other Court Decisions That Help Explain Section 37
Rashid Mazuri Ramadhani v Doshi & Company
In Rashid Mazuri Ramadhani & 10 Others v Doshi & Company (Hardware) Limited & Another, the Court of Appeal emphasized the need for the employee claiming conversion to establish:
The employees in that matter had been engaged based on job availability and paid daily. The required continuity was not sufficiently established.
The decision is important because it confirms that conversion is not based only on an allegation that someone worked for the organization at different times.
Evidence of the employment pattern matters.
Kitui Flour Mills Limited v Mbai
In Kitui Flour Mills Limited v Mbai, the Court considered the distinction between continuous and intermittent casual engagement.
The decision reinforces that genuinely intermittent employment may not satisfy Section 37 merely because the worker was called on different occasions.
Kenyatta University v Maina
In Kenyatta University v Maina, the Court of Appeal considered prolonged use of short-term contractual arrangements. The case is frequently cited for the principle that employers should not use repeatedly renewed short-term arrangements as a method of avoiding statutory employment protections.
Together, these cases show that courts examine both sides of the question.
They will protect workers where continuous casualisation is used to avoid lawful obligations, but employees must still establish the facts supporting conversion.
What Changes After Casual Employment Converts?
Conversion can have significant practical and financial consequences.
1. The payment cycle changes
The contract is deemed to be one where wages are paid monthly.
Continuing to process the employee through a purely daily casual payroll may no longer reflect the legal status of the relationship. How pay, overtime and deductions should then be handled is covered in our guide to casual worker pay and statutory deductions.
2. Notice requirements become relevant
Section 35(1)(c) provides for written notice in relation to contracts where wages are paid monthly.
A worker whose contract has converted should not ordinarily be treated as someone whose employment simply ends without notice at the close of an ordinary working day.
3. Statutory employment terms may apply
Depending on duration and eligibility, the employee may become entitled to terms under the Employment Act, including:
4. Termination must be properly managed
Where a casual contract has converted, the employer may need to demonstrate:
The employer should not assume that simply deleting the employee’s name from the casual register is sufficient.
5. Employment records become critical
If a dispute arises, the employer may be required to produce employment and payroll records.
Where the employer has failed to keep or produce written employment particulars, Section 10(7) of the Employment Act may place the burden of proving or disproving an alleged term of employment on the employer.
What Evidence Is Used to Determine Whether Conversion Occurred?
A court, labour officer, auditor or HR adviser may examine:
Evidence | What it may demonstrate |
|---|---|
Attendance registers | The actual days and continuity of work |
Muster rolls | Whether the employee appeared regularly |
Shift rosters | Whether there was an established work pattern |
Payroll records | Frequency, consistency and method of payment |
Mobile money records | Dates and regularity of wage payments |
Bank statements | Whether remuneration was paid daily, weekly or monthly |
NSSF records | Periods for which contributions were remitted |
SHA and Housing Levy records | How the employee was treated in statutory payroll |
Job cards or production records | Work performed and output delivered |
Employment or deployment letters | Intended duration and terms |
Supervisor instructions | Level of control and integration |
Company identification cards | Whether the worker was integrated into operations |
PPE and uniform records | Nature and continuity of deployment |
Emails or messages | Expectations of continued work |
Leave or absence records | Whether the organization treated the worker as ongoing staff |
Witness evidence | How the relationship operated in practice |
HRIS records | Employment history, attendance, payroll and status changes |
Employers should not rely on memory or the recollection of a line supervisor.
Reliable records are the strongest protection against both genuine compliance failures and unsupported claims.
Practical Examples
Scenario One: One-day event support
A company engages twenty workers to arrange seats, guide guests and clear the venue after a one-day event. They are paid at the end of the day, and there is no expectation of further work.
This is more likely to fall within genuine casual employment, subject to proper wages, safety and records.
Scenario Two: Warehouse worker engaged continuously
A warehouse engages the same worker from Monday to Saturday for six consecutive weeks. The worker reports to the same supervisor and performs routine picking and packing duties.
This arrangement presents a strong Section 37 conversion risk.
Scenario Three: Intermittent agricultural work
A farm calls the same worker for two or three days during different harvesting periods. There are genuine gaps, no regular roster and no guarantee of work between the assignments.
This may remain intermittent casual employment, but the actual attendance pattern and nature of the season should still be documented.
Scenario Four: Six-month project contract
A company hires a technician under a written six-month contract to support a specific system installation. The contract has a clear commencement date, scope and end date.
This is a fixed-term contract—not casual employment merely because it is temporary.
The fact that it exceeds one month does not automatically turn it into permanent employment.
Scenario Five: Repeated three-month contracts
An employee works in the same continuing position under three-month contracts renewed repeatedly over several years. The role is part of the organization’s normal structure and has no genuine project end date.
This arrangement carries a high risk of being challenged as an artificial short-term structure used to avoid statutory protection.
Scenario Six: Outsourced worker
An outsourced employee reports to a client site daily for an extended period. The outsourcing provider processes payroll, while the client controls the employee’s day-to-day work.
The worker’s status should be clearly documented. Outsourcing does not mean that casual-employment rules, wages, safety obligations and statutory requirements disappear.
The agreement should allocate responsibilities between the provider and client, while actual workplace practices should remain consistent with the documented model. The two operating models are compared in in-house versus outsourced casual workforce management.
Can an Employer Create Breaks to Prevent Conversion?
Artificially removing a worker from the schedule for a few days and then bringing the same person back may not necessarily eliminate the risk.
Courts can examine:
Rotating casual workers solely to avoid employment rights can also create:
The stronger approach is to select the appropriate employment model from the beginning.
The Financial Risk of Getting Section 37 Wrong
A Section 37 dispute can expose an employer to claims involving:
Not every claim will automatically succeed. Employees must establish the factual and legal basis for the amounts claimed.
However, poor employer records can make it difficult to challenge allegations relating to employment duration, attendance, pay, leave or termination.
The risk is therefore not only the length of the casual engagement.
The risk is also the employer’s inability to produce reliable records. These liabilities sit alongside the wider hidden costs of casual labour.
Common Employer Mistakes
Mistake 1: Treating “casual” as an internal payroll category
An accounting classification does not determine legal employment status.
Mistake 2: Keeping the same workers on casual payroll for years
Long-term continuity is difficult to reconcile with genuine day-to-day engagement.
Mistake 3: Paying weekly while insisting the worker is paid daily
The payment practice should be consistent with the asserted employment relationship.
Mistake 4: Using casual workers in permanent positions
If the organization permanently requires the role, the employment model should reflect that reality.
Mistake 5: Failing to maintain attendance and payment records
Without records, the employer may struggle to demonstrate that work was intermittent.
Mistake 6: Terminating casual workers without reviewing conversion
A worker whose contract has converted may be entitled to notice and fair termination procedures.
Mistake 7: Assuming outsourcing eliminates all liability
Client and provider responsibilities must be clearly allocated and properly implemented.
Mistake 8: Using breaks or rotations to avoid the law
Artificial workforce arrangements may still be examined according to their substance.
Mistake 9: Confusing a fixed-term employee with a casual worker
A worker can be temporary without being casual. The correct contract should be used.
Mistake 10: Waiting for an employee complaint before reviewing status
By the time a formal complaint arises, the employer may already be facing several years of potential exposure.
How Employers Should Review Their Casual Workforce
Step 1: Create a complete worker register
Identify every person currently treated as casual, temporary, seasonal, relief or outsourced.
Step 2: Map the actual employment history
For each worker, establish:
Step 3: Classify the business requirement
Determine whether the work is:
Step 4: Apply the Section 37 tests
Assess both:
Step 5: Identify financial and legal exposure
Review notice, leave, wages, overtime, statutory contributions, benefits and termination history.
Step 6: Select the appropriate regularisation option
Depending on the findings, the employer may need to:
Step 7: Correct payroll and records
Ensure that employment status, payment frequency, statutory treatment and HR records are consistent.
Step 8: Introduce review alerts
HR should receive an alert before a casual worker approaches the organization’s internal review threshold.
Employers should not wait for the legal threshold before considering whether the arrangement remains appropriate.
A Simple Casual Workforce Risk Classification
Review level | Typical indicators | Recommended response |
|---|---|---|
Lower review priority | One-off work, daily payment, no continuing expectation | Maintain clear engagement, attendance, payment and safety records |
Moderate review priority | Repeat engagement, increasing regularity, approaching one month | Conduct an employment-status review before further deployment |
High review priority | Continuous work beyond one month, regular roster, core operational duties | Obtain HR and legal advice and consider regularisation |
Critical review priority | Several months or years of continuous casual engagement, missing records, disputed benefits | Undertake an immediate compliance and financial exposure review |
Structural risk | Repeated short-term contracts for permanent work over prolonged periods | Review the workforce model, justification and regularisation requirements |
This classification is an internal management guide, not a substitute for legal analysis.
The Role of Line Managers
Casual employment risk is often created outside the HR department.
A supervisor may keep calling a reliable worker because:
By the time HR identifies the worker, the person may have worked continuously for several months.
Organizations should therefore require line managers to:
Casual workforce compliance cannot be managed by HR alone.
It requires coordination between HR, operations, finance, procurement, payroll and line management.
How Technology Can Help Prevent Unintended Conversion Risk
Manual registers make it difficult to see a worker’s full history across departments, branches and sites.
A worker may appear new to one supervisor while already having worked at another location for several weeks.
A workforce management system can support:
Through PiPOHRIS.io, organizations can maintain centralized employee and casual-worker records, connect attendance to payroll and monitor engagement patterns before compliance concerns become disputes.
Technology cannot decide the legal status of an employee. It gives management the accurate information needed to make that decision.
When Should an Employer Seek Professional Support?
An employer should consider professional HR or employment-law support where:
Employers should obtain advice before terminating long-serving casual workers or introducing documents intended to retrospectively change their status.
Poorly handled regularisation can create additional risk.
Frequently Asked Questions About Section 37
1. What is Section 37 of the Employment Act?
Section 37 governs the conversion of casual employment into term employment where the working period, continuity or expected duration of the work meets the statutory tests.
2. When does a casual worker become a term employee in Kenya?
Conversion may occur where the employee works for continuous working days amounting in aggregate to at least one month or performs work that cannot reasonably be completed within an aggregate period of three months or more.
3. Does a casual worker become permanent after thirty days?
Not necessarily in every case. Section 37 provides for conversion to a monthly-paid term contract. Whether the employment ultimately assumes permanent status depends on the facts, duration, nature of the role and applicable contractual arrangements.
4. Does the employee need a conversion letter?
Conversion may occur by operation of law once the statutory conditions are met. The absence of a conversion letter does not necessarily prevent it.
The employer should nevertheless formalise the correct employment status through appropriate written documentation.
5. Do rest days break continuity?
Section 37 provides that an employee is deemed entitled to a paid rest day after six continuous working days. Relevant rest days and public holidays are counted when calculating continuous working days under the section.
6. What if the worker only reports when work is available?
Genuinely intermittent engagement may remain casual. The employer should maintain records showing the actual days worked, gaps between engagements and absence of guaranteed continuing work.
7. Does weekly payment make someone a term employee?
Weekly payment alone may not determine status, but it is inconsistent with the strict definition of a casual employee as someone paid at the end of each day. The entire relationship should be reviewed.
8. Can a casual worker claim annual leave?
Where casual employment has converted and the applicable duration requirements are met, the worker may become entitled to annual leave and other statutory terms.
9. Is every fixed-term contract converted after three months?
No. A genuine fixed-term contract remains a recognized employment model. Section 37 primarily addresses casual employment. However, repeated short-term contracts used for long-term permanent work may attract judicial scrutiny.
10. Can an employer rotate casual workers to avoid conversion?
Artificial rotations may not eliminate legal risk. They can also increase recruitment, training, safety and productivity costs. The organization should use the employment model that reflects the actual business requirement.
11. What happens when a converted employee is terminated without notice?
The employer may face claims for notice pay, accrued entitlements and, depending on the circumstances, compensation for unfair termination.
12. Who must prove that casual employment converted?
The employee must establish the factual basis for conversion. However, employers are responsible for maintaining employment records and may bear the burden of proving or disproving disputed employment terms where required records are not produced.
13. Can a labour officer deal with a Section 37 complaint?
Yes. Section 37 expressly allows an aggrieved casual employee to lodge a complaint with a labour officer.
14. Does Section 37 apply to outsourced workers?
The employment relationship, applicable contracts and responsibilities of the provider and client must be examined. Outsourcing does not remove the need for lawful employment classification and proper worker records.
Conclusion: Review the Relationship Before the Law Does It for You
Casual employment is intended to support genuinely short-term, day-to-day and intermittent work.
It should not become an indefinite employment model for workers who report continuously, perform permanent duties and remain central to normal operations.
Section 37 of the Employment Act requires employers to look beyond labels and examine the reality of the employment relationship.
The safest employer approach is to:
A casual worker should not become a compliance risk simply because no one monitored how long the person had worked.
How ACCUREX Can Help
ACCUREX supports organizations with:
If your organization has casual workers, temporary employees or repeatedly renewed short-term contracts, ACCUREX can help you determine whether the current arrangements remain appropriate and develop a practical regularisation plan.
Speak to ACCUREX about a Casual Workforce Compliance and Section 37 Review.
ACCUREX— We Build People. We Grow Organizations.
Visit:www.accurex.co.ke
Email:info@accurex.co.ke
This article provides general HR and employment-compliance information and does not constitute legal advice. Employment arrangements and court outcomes depend on their specific facts. Employers should obtain professional legal and HR advice before regularising or terminating affected workers.
Related Reading
Casual Worker Pay in Kenya: Minimum Wages, Overtime, Rest Days and Statutory Deductions
Casual Workers in Kenya: What Employers Need to Know About Contracts, Pay, Rights and Compliance
The True Cost of Casual Labour in Kenya: What Employers Often Leave Out of Their Budgets
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