https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2346

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI** **APPEAL NO. E072 OF 2025** *(Before D. K. N. Marete)* **CONSOLIDATED HUMAN RESOURCE SOLUTIONS LIMITED.......…APPELLANT** **VERSUS** **TIMOTHY TUNGUTA TENYA…………………………...........…………RESPONDENT** **JUDGMENT** This matter was originated by way of a Memorandum of Appeal dated 6th March, 2025. It arises from a judgment delivered on 27th February, 2025 in Mavoko CMELRC E078 of 2024. It comes out as follows; 1. *The Honourable Magistrate erred in law and in fact by failing to find that the Respondent’s fixed term contract terminated automatically on 25th June, 2023.* 2. *The Honourable Magistrate erred in law and in fact by finding that the Respondent was unlawfully terminated.* 3. *The Honourable Magistrate erred in law and in fact by finding that the Appellant was required to issue a notice to the Respondent before the contract terminated by effluxion of time.* 4. *The Honourable Magistrate erred in law and in fact by holding that the Appellant was required to prove the reasons for termination whereas the contract terminated due to expiry of time.* 5. *The Honourable Magistrate disregarded the evidence on record which showed that the Respondent was paid until the end of his contract.* 6. *The Honourable Magistrate erred in law and in fact by finding that the Respondent was entitled to salary in lieu of notice.* 7. *The Honourable Magistrate erred in law and in fact by awarding the Respondent 12 months’ salary as compensation for unfair termination.* 8. *The Honourable Magistrate erred in fact by using a figure of Kshs. 76,440.00 as the multiplicand by which a cumulative award of Kshs. 993,720.00 was arrived at.* The Appellant prays for orders thus; 1. *This appeal be allowed.* 2. *The Judgment and the resultant decree of the Hon. Derrick Kuto delivered on 27th February, 2025 in ELRC Case Number E078 of 2024 be set aside in its entirety and/or varied.* 3. *This court be pleased to substitute the decision of Hon. Derrick Kuto delivered on 27th February, 2025 with a decision dismissing the Respondent’s claim.* 4. *The costs of this Appeal and lower court be awarded to the Appellant.* The Appellant frames the issues for determination as follows; 1. Whether the learned Magistrate erred in failing to find that the Respondent’s fixed term contract lapsed by effluxion of time and whether the Respondent was unlawfully terminated. 2. Whether the learned Magistrate erred in awarding the Respondent the reliefs sought. It is the Appellant’s case and submission that the Respondent was employed as an Electrician on a fixed term contract for a period of six months commencing 26th December, 2022 and ending on 25th June, 2023. The contract, executed on 4th January, 2023 and tendered as Exhibit 1 at Pages 37 to 42 of the Record of Appeal, expressly stipulated that the employment was for a fixed period and that 25th June, 2023 would effectively be the employee’s last working day. Renewal was expressed to be solely at the discretion of the Appellant, based on performance and availability of work. The Appellant’s Human Resource Manager, Mr. Henry Murimi (DW1), testified that the Respondent’s fixed term contract lapsed by effluxion of time and that the Appellant did not terminate the contract. The Appellant contends that the non-renewal of a fixed term contract does not constitute termination within the meaning of the Employment Act, 2007 and that the procedural safeguards under Sections 41, 43 and 45 of the Act are accordingly not triggered. In such support, the Appellant relies on the authority of **Samuel Chacha Mwita v Kenya Medical Research Institute [2014] eKLR**, where the court held that a fixed term employment contract will naturally terminate on the expiry date and that the proximate cause of termination is not an act by the employer. The Appellant further relies on the Court of Appeal decision in **Transparency International Kenya v Teresa Carlo Omondi [2023] KECA 174**, **KLR** which held that the doctrine of legitimate expectation does not arise in the renewal of a fixed term contract and that non-renewal cannot constitute unfair termination or dismissal. Reference is also made to the Court of Appeal in **Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho [2017] eKLR**, which affirmed that a fixed term contract carries no rights, obligations or expectations beyond the date of expiry. The Appellant additionally challenges the salary figure of Kshs. 76,440.00 used by the trial court in computing the awards. It submits that the Respondent’s basic contractual salary was Kshs. 37,123.00 per month as stipulated in the contract and confirmed from the Respondent’s own pay slip during cross-examination at trial. The higher figure of Kshs. 76,440.00 represents an average inclusive of overtime payments, which do not form part of gross salary for statutory computation purposes. The total award of Kshs. 993,720.00 reached by the trial court accordingly lacks factual and legal foundation. The Appellant urges this court to find that the trial court erred in law and in fact in holding that the Respondent was unlawfully terminated, that no such termination indeed occurred and that the Respondent is accordingly dis-entitled to the reliefs awarded. The Respondent’s case and submission is that the Appellant’s conduct prior to and after the stated expiry date of the contract amounted to a termination of employment and not a mere lapse of a fixed term contract. The Respondent testified that on 1st June, 2023, whilst still within the contract period, he was directed by the Appellant’s Human Resource Manager, Mr. Murimi, not to report to work the following day and to return on 1st August, 2023, a full month after the contract was to expire. The Respondent was informed that the Appellant wished to re-evaluate and restructure its budget before allowing him to resume duties. The Respondent testified that on 1st August, 2023 he returned as directed. He was not given tools of work and was again directed by Mr. Murimi to return on 6th August, 2023. When he reported on 6th August, 2023, his colleagues were given tools for their duties. He was directed to wait. At around 900 hours the Human Resource Assistant Manager, Mr. Munene, informed him that his services were no longer required. The Respondent requested a letter explaining the termination and a recommendation letter, both of which were declined. Critically, DW1 Mr. Murimi confirmed under cross-examination that the events described by the Respondent in Paragraphs 3 and 4 of his witness statement were true. The Respondent submits that the Appellant’s conduct in actively directing him to return to work well after the stated contract expiry date created a legitimate expectation that the employment relationship would continue and constituted a *de facto* extension of the contract. The Respondent relies on the principles in **Teresa Carlo Omondi v Transparency International Kenya**, **Mombasa ELRC Cause No. 863 of 2015** where the court held that the burden of proof in legitimate expectation claims rests on the employee, and that the expectation must be induced by the decision maker through regular practice or express promise. The Respondent submits that this burden is discharged on the facts here. On procedural fairness, the Respondent submits that the Appellant wholly failed to comply with the requirements of Section 41 of the Employment Act, 2007 as articulated in **Alphonse Maghanga Mwachanya v Operation 680 Limited**,**Mombasa ELRC Cause No. 146 of 2012**. No reasons were communicated, no representative was allowed, no opportunity to be heard was afforded and no documentation was issued. The Respondent urges this court to dismiss the appeal with costs. After a considered look and scrutiny of the Memorandum of Appeal, the Record of Appeal and the submissions of the parties, the issues for determination therefore become; 1. Whether the Respondent’s employment was terminated by the Appellant or whether his fixed term contract lapsed by effluxion of time. 2. Whether the Respondent had a legitimate expectation of renewal of the fixed contract. 3. Whether the termination was wrongful, unfair, unprocedural and unlawful. 4. Whether the Respondent is entitled to the reliefs sought. 5. Who bears the costs of this appeal. On the 1st issue for determination, as to whether the Respondent’s employment was terminated or their fixed term contract lapsed by effluxion of time, the Appellant’s case is that the contract expired on 25th June, 2023 by its own terms and that no act of termination occurred. The Respondent’s case is that the Appellant’s positive conduct in directing him to return to work after that date extended the employment relationship, rendering the subsequent act of dismissal on 6th August, 2023 a termination by the employer. This court has carefully re-evaluated the evidence on record. The following facts are not in dispute. First, the contract stipulated an end date of 25th June, 2023. Second, on 1st June, 2023, that is before the contract expired, Mr. Murimi directed the Respondent to cease reporting and to return on 1st August, 2023. Third, on 1st August, 2023, the Respondent was again sent away and directed to return on 6th August, 2023. Fourth, on 6th August, 2023, the Respondent was informed by Mr. Munene that his services were no longer required. Fifth, Mr. Murimi confirmed under cross-examination that these events occurred as described by the Respondent. Lastly, no letter of termination, no explanation and no notice pay were ever issued. A fixed term contract which by the deliberate act of the employer, is kept alive beyond its stated expiry date cannot be said to have terminated on that date by effluxion of time. The Appellant’s own HR Manager directed the Respondent to remain available and to present himself for work some five to six weeks after 25th June, 2023. The Respondent did so. He was received and sent away twice before being informed on 6th August, 2023 that he was no longer needed. That act on 6th August, 2023 was the proximate cause of the end of the Respondent’s employment and it was the act of the Appellant’s management. The trial court’s finding that the termination was the act of the employer is therefore real and affirmed. On the 2nd issue for determination is whether the Respondent had a legitimate expectation of renewal of the fixed contract. Here, the Appellant seeks to rely on the Court of Appeal decision in **Transparency International Kenya v Teresa Carlo Omondi [2023] KECA 174 (KLR)** which held that the doctrine of legitimate expectation does not arise in the renewal of a fixed term contract and that non-renewal cannot constitute unfair termination or dismissal. That authority binds this court, but it does not speak to the facts of this case. The Court of Appeal was concerned with a fixed term contract that ran its full course and expired, the employee’s complaint being the employer’s failure to renew it. Here, by contrast, the contract did not run its course and quietly expire. The Appellant, by the deliberate and repeated directions of its own Human Resource Manager, kept the employment relationship alive beyond the stated expiry date and then brought it to an end by a positive act of its management on 6th August, 2023. The Respondent does not require the doctrine of legitimate expectation to compel a renewal that never happened his case rests and succeeds on the continuation of the employment by the employer’s own conduct and its termination by the employer’s own act, as found in the 1st issue. To the extent that the trial court’s reasoning invoked legitimate expectation, the result it reached is sustained on the surer footing of the *de facto* continuation of the employment. The Appellant’s authorities and other submissions on the non-renewal of expired fixed term contracts are inapplicable to the facts of the case. On the 3rd issue for determination is whether the termination was wrongful, unfair, unprocedural and unlawful. Procedural fairness under Section 41 of the Employment Act, 2007, this court is guided by the framework set out in **Alphonse Maghanga Mwachanya v Operation 680 Limited (Mombasa ELRC Cause No. 146 of 2012)**. To meet the legal requirements of procedural fairness an employer must do the following: explain to the employee in a language the employee understands the reasons why termination is being considered allow a representative of the employee to be present hear and consider any explanations by the employee or representative and where the employer has more than fifty employees, comply with its own internal disciplinary rules. The Respondent received no explanation, no representative, no hearing and no documentation. The trial court’s invocation of Section 43 of the Employment Act, 2007, placing the burden of proving the reason for termination on the Appellant, and the Appellant’s failure to discharge that burden is plausible and acceptable. The finding of substantive and procedural unfairness stands. On the 4th issue, the appropriate relief, the 8th ground of appeal is well taken. The Respondent’s basic contractual salary was Kshs. 37,123.00 per month as stipulated in the Fixed Term Contract of Employment and as confirmed from the Respondent’s own pay slip during cross-examination. The figure of Kshs. 76,440.00 applied by the trial court included overtime, which is a variable and irregular payment that does not form part of gross salary for the purpose of computing statutory remedies under section 49(4)(d). The awards of the trial court are therefore varied to the extent of the applicable salary figure. On the quantum of compensation, this court is guided by the factors under Section 49(4) of the Employment Act, 2007 and the principle in **Kiambaa Dairy Farmers Co-Operative Society Limited v Rhoda Njeri & 3 Others [2018] eKLR** that the award of twelve months’ compensation is not mandatory or automatic and must be proportionate to the degree of violation. Awards of the statutory maximum ought to be reserved for the most egregious cases. The Respondent served on a six-month fixed term contract. The procedural breach, while total, must be weighed against the short duration of the engagement. This court finds that an award of six months’ salary at the basic contractual rate as compensation for unfair termination is just and proportionate in the circumstances. This court has also considered the written submissions on the various issues raised by both parties and find that the Respondent's submissions on the salary figure are not sustainable on the evidence. The Respondent confirmed from his own pay slip during cross-examination that his basic salary was Kshs. 37,123.00 per month. The figure of Kshs. 76,440.00 applied by the trial court included overtime, which is a variable and irregular payment that does not form part of gross salary for the purpose of statutory remedies under Sections 35 and 49 of the Employment Act, 2007. To this extent, the trial court's computation is unsustainable. I am therefore inclined to partially allow the appeal to the extent of revising the awards of the trial court on the applicable salary figure, and revise the same as follows; 1. One (1) months salary in lieu of notice …………………………..Kshs. 37,123.00 2. Six (6) months compensation for unfair and unlawful termination of employment ………………………………………………………………….Kshs. 222,738.00 **Total of Award ……………………………………………. Kshs. 259,123.00** 3. Interest of the award at court rates shall accrue from the date of this judgment of court until payment in full. 4. The Appellant shall issue the Respondent with a Certificate of Service pursuant to Section 51 of the Employment Act, 2007 within thirty (30) days of this judgment of court. 5. The costs of this cause shall be borne by the Appellant. Delivered, dated and signed this 29th day of July 2026. **D. K. Njagi Marete** **JUDGE** Appearances: 1. Mr. Mbabu instructed by Mwaniki Gachoka & Co. Advocates for the Appellant. 2. Mr. Maina instructed by Eboso & Company Advocates for the Respondent.