Ahmed & 9 others v Lamu Water Sewarage Co. Ltd (Employment and Labour Relations Cause E001 of 2024) [2026] KEMC 522 (KLR) (26 June 2026) (Judgment)

REPUBLIC OF KENYA IN THE MAGISTRATE COURT OF KENYA AT LAMU COUNTY COURT NAME: LAMU MAGISTRATE COURT CASE NUMBER:MCELRC/E001/2024 SHIHAB ABDULRAHMAN AHMED KHADIJA ATWAS MOHAMED NUZLA MISBAHU ALI MISHI ALI AMRI NGALA FLORENCE NYANZIGU MERCY MKEAKAL BADA MOHAMED FAMAU NYENYE HANNAH MONICAH WAITHERA ABDULKADIR AHMED AHMED MOHAMED LIWALI.........................................................CLAIMANTS =VERSUS= LAMU WATER SEWARAGE CO. LTD...........................................RESPONDENT JUDGMENT 1. The Claimants instituted these proceedings vide the Memorandum of Claim dated 19th April 2024. They claim that 1 that they were employees of the Respondent and that their employment was unlawfully, unfairly and unprocedurally terminated. 2. That upon lodging a complaint before the Labour Office, Kilifi, the Labour Officer rendered findings in their favor and ordered payment of totaling Kshs. 5,389,281/= comprised of Kshs, 579,429, 196,417,484,167, 512,648, 45,758,805,308, 548,395,512,648, 561,752 for claimants 1-10 respectively and that these amount the Respondent allegedly failed to settle. That the amounts were in respect of 3 months’ salary in lieu of notice, unpaid wages, leave days not taken, and compensation for unfair termination. 3. The Respondent filed its Statement of Defense denying the allegations and maintaining that the Claimants' employment was not terminated unlawfully, unfairly or at all. 4. The Respondent's position is that the Claimants were engaged on fixed-term contracts which lapsed upon expiry of their respective contractual terms and that the Labour Officer's findings are neither binding nor enforceable against the Respondent. 5. The 1st claimant testified as only witness on his own behalf and behalf of the other co-claimants stating that he has a signed authority to plead. He adopted his witness statement dated 2 19/4/2024 and produced documents per list of documents and supplementary list. 6. The Respondent’s statement of defense denied the mandate of the labor officer to asses and award the amounts herein claimed and denied the claim in toto and put the claimants to strict proof. 7. The Respondent called Najash Abdul Ahmed the Managing Director for the Respondent, He denied illegally terminating their contracts but that their contracts expired. That the letters of appointment to permanent and pensionable terms (herein after P&P terms) were issued by the former MD during election period without following due procedure on translation of terms as per the County public service board approval. That this was unprocedural and not legal. That it did not follow laid down procedures under County public service Board. That the renewal and translation of fixed term contracts to P&P terms had impact and financial implications on the company as respondent did not have the financial capability to meet the unauthorized financial commitments. 8. He admitted he was aware of the meeting in Malindi on 6/3/2023 before Labor office Eunice Lidogo where the respondent sent a representative. He admitted receipt of letter dated 6/3/2023 which directed that the respondent may the 3 claimants as tabulated. He denied that they had not paid wages for August, September and October November 2023. He said the tabulation by the labor officer was not correct and the labor officer refused to retabulate despite respondent raising concerns. 9. From the pleadings, evidence and submissions on record, the following issue arise for determination: a) Whether the order for declaration that the tabulation and calculation done by the labor officer as regards the claimants’ dues be deemed as proper and in accordance with the law and be adopted as judgement of the court. 10. In legal terms the issue is the legality of the labor officers’ recommendations i.e. whether they are binding on the court. 11. There is no contest that the claimants were employees of the Respondent under contracts. There is no dispute that the claimants fixed term contracts were still running and but the respondents were given P& P terms of employment. 12. The Respondent’s case is that their conversion of the employment from contract to P&P was illegal and unprocedural. That upon expiry of the existing contracts the claimants were respectively served with notice of expiry of contract. The 4 claimants are aggrieved and say they were not on contract but on P&P employment. 13. I have keenly looked at the facts in this case and I am convinced that even if the P&P letter of employment may have been irregularly issued by the Managing Director as claimed by the Respondent, these letters could not be lawfully withdrawn or terminated by a document titled Notice of expiry of contract. The letters had created a legitimate expectation on part of the claimants. There is no evidence they were party or influenced the issuance of the letters of offer for P&P terms. It is my observation that under laws of contract, the claimants upon receipt and acceptance of the letters of offer of appointment on P&P terms they ceased being employees on fixed term or temporary contracts. They transitioned to P&P employment. 14. However, the case before me as framed in the statement of claim is not expressly a case of unfair or unlawful termination of employment be it the fixed terms, temporary or the P&P terms. The claimants are seeking for an order for the adoption and enforcement of the labor officer’s recommendation in the letter date 4/8/2023. The nature of the proceeding is not a claim of unfair or unlawful termination of employment. I believe it is on this basis that the claimants did not bother to lay 5 the basis of their claims as lodged before the labor officer leading to the labor officer’s recommendations. 15. It is this court’s finding that the Respondent are mistaken as to the legal nature of the case before this court; which I can sum up as the legal significance of the labor officer’s recommendations in case of termination of employment. 16. The Respondent’s submission that Claimants did not place before this Court any contractual provision, policy document, Board resolution, undertaking or other evidence creating a right to renewal of their contracts or guaranteeing continued employment beyond the contractual periods is a misapprehension of the dispute placed before this court and not relevant for reasons given earlier in this judgment. 17. The submission by the respondent counsel in terms …”evidence before Court demonstrates that the Claimants were engaged under fixed-term contracts of employment with specific commencement and expiry dates. The Respondent produced the relevant contracts, appointment letters and renewal letters evidencing the terms governing each Claimant's engagement. The central question before this Honourable Court is not whether the Claimants at one point served in the various positions reflected in their appointment documents, but whether the cessation of their employment constituted unfair termination 6 within the meaning of Sections 45 of the Employment Act. The Respondent's evidence, as adduced through RW1, was clear and consistent that the Claimants' employment came to an end upon expiry of their respective fixed-term contracts” is a clear indicator of the finding above. 18. The above submissions show that the Respondent did not distill the real issue for determination before this court. A look at the orders sought show the nature of the dispute. The claimants sought, that “the Respondents be ordered to pay the claimants the amounts as per the labor officers letter dated 9/8/2023”, interest on b from 9/8/2023 to date until payment at court rates, and costs of the claim. 19. Just as the respondent is mistaken as to the nature of the case presented before this court; the claimants are equally mistaken as to the legal significance of the labor officer’s recommendations in cases of termination of employment. 20. The Labor officer under the employment Act on matters of claims of termination of employment can only be recommendations which this court is bound to look at but is not bound by it. There is no legal provision under the Employment Act vesting the Labor officer judicia, or qusi judicial powers to pass a judgment in form of recommendations that can bind this court or must be adopted by the court. I 7 concur with the submission by the respondent that the Labour Officer recommendations are not a binding judgment, or order capable of being adopted and enforced by this court as an award against an employer. 21. The unfortunate part that directly flows from the misapprehension of the legal nature of the labor officer’s recommendation is evident in the manner the claimants pleaded and prosecuted their claim. 22. This court therefore has not been furnished with sufficient and relevant facts and information upon which the court can interrogate the Labor officer’s recommendations so as to understand what he considered, what he arrived at , how and why. Looking at the tabulations of the labor officer, he awarded salary in lieu of notice yet he made a serious error of fact and law which I address hereunder. 23. The labor officer seems to have reached a wrong finding and conclusion that the claimants’ permanent and pensionable terms of employment were unfairly or unlawfully or otherwise terminated. This is contrary to the facts of this case and the law. It is my finding that the P&P employment terms of all claimants have never been terminated. There is no such evidence placed before court. What the respondent communicated was a notice of expiry of contract of the fixed 8 terms or temporary terms. This court in this judgment has found the said contracts subset of the notice of expiry from the Respondent had terminated upon the claimants accepting the P&P terms of employment as offered to them by the Respondent. There were no casual or fixed terms pf contract available to be the subject of the said notice issued by the Respondent to the respective claimants. 24. In Kenya Union Of Commercial Food And Allied Workers –vs- Meru North Farmers Sacco Limited [2013] eKLR, the Industrial Court held that whatever reason or reasons that arise to cause an employer to terminate the services of an employee, the employee must be taken through the mandatory process as outlined under Section 41 of the Employment Act. That applies in a case of termination as well as in a case that warrants summary dismissal. See also Mary Chemweno Kiptui –Vs –Kenya Pipeline Company Limited [2014] eKLR” 25. Therefore, this case is not case of about proving or disproving whether the cessation of the claimants employment constituted unfair termination within the meaning of Sections 45 or any other provisions of the Employment Act. It a case where the claimants seek to have the labor officer’s 9 recommendations vide letter dated 9/8/2023 be adopted by this court. 26. The submissions and authorities in Benard Onyango Oudu v Nakuru Industries Ltd [2019] eKLR Bernard Wanjohi Muriuki v Kirinyaga Water and Sanitation Company Limited & Another [2012] eKLR in respect of fixed-term contract are not applicable nor relevant to this particular claim for reasons above. The claimants have not claimed in this case that the Respondent dismissed them, or terminate or otherwise removed them from employment. 27. Even if this court was to try to establish the nature of dispute placed before the labor officer and the basis of the award. In view of the nature of dispute before court, the court does not find any evidence placed before this court to show the basis upon which the labor officer assessed and awarded to the claimants the monies tabulated in his recommendations and which are now being claimed in this case. 28. Before I conclude I believe it is in order to make a necessary clarification for avoidance of doubt in view of finding herein above and authority in Kenya Union of Commercial Food and Allied Workers –vs- Meru North Farmers Sacco Limited [2013] eKLR. The claimants P& P contracts have never been terminated lawfully or otherwise. The claimants by 10 implications are still lawful employees of the respondent until such proper and lawful termination is effected in respect of P& P contracts of employment. 29. The Memorandum of Claim dated 19th April 2024 is nonetheless dismissed in its entirety with no orders as to costs in view of the findings herein. I do not find it prudent to award costs in view of the subsisting employee relationship as found in this judgement. Judgement Read, Delivered and Dated at Lamu this …26th ……. day of……June …. 2026 at…10. am. P.W. Wasike Principal Magistrate In the presence of Court Asst ……Rhova……………………. For the Claimant …… …Mr Soita. ………………………. For the Respondent ……. Ms Swaleh- Absent …. …………………. 11 12