https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1744

Gatimu v Rural Electrification Authority (Cause E723 of 2024) [2026] KEELRC 1744 (KLR) (25 June 2026) (Judgment) Neutral citation: [2026] KEELRC 1744 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Cause E723 of 2024 CN Baari, J June 25, 2026 Between Caroline Wambui Gatimu Claimant and Rural Electrification Authority Respondent Judgment Introduction 1.In a Memorandum of Claim dated 17th May, 2024, the Claimant sued the Respondent alleging unfair termination of her contract. She seeks the following remedies: -i.A declaration that the Claimant's termination from employment by the Respondent was unlawful, unfair, and unprocedural.ii.A declaration that the Claimant is a permanent employee of the Respondent, having worked continuously for ten yearsiii.An order for payment of:a)Kenya Shillings One Hundred and Forty Three Thousand Five Hundred Shillings Only (Kes. 143,500.00/=) being one month’s salary in lieu of noticeb)Kenya Shillings One Million, Seven Hundred and Twenty Two Thousand Only (Kes. 1,722,000/=) being twelve (12) months' salary for compensation for unfair termination.c)Kenya Shillings One Hundred and Twenty Nine Thousand and Twelve (Kes. 129,012) being compensation for One Hundred and Four hours worked overtime.d)Kenya Shillings Sixty-Six Thousand and One Hundred and Sixty (Kes.66,160) being payment for the 40 public holidays worked and rest days.e)Kenya Shillings One Million, Four Hundred and Thirty Five Thousand (Kes. 1,435,000) being the Gratuity pay.f)Kenya Shillings Seven Hundred and Eighty-Nine Thousand, Two Hundred and Fifty (Kes. 789,250/=) being Service pay at 15 days per every completed year that the Respondent never bothered to remit.iv.An order for the Respondent to issue the Claimant with a Certificate of service that complies with Section 51 of the Employment Act, 2007.v.Cost of this Claim and Interest on all monetary awards at court rates. 2.The Respondent entered an appearance through the Office of the Hon. Attorney General and subsequently filed a reply to the Claimant’s claim dated 15th November, 2024, denying the Claimant’s Claim. 3.Both the Claimant’s and the Respondent’s cases were heard on 16th December, 2024. The Claimant testified in support of her case, adopted her witness statement, and produced her list and bundle of documents as exhibits in the matter, which were marked as Claimant’s exhibits No. 1-10. 4.The Respondent presented the evidence of one Dinah Chesang Rongoe, their HR Officer, who equally adopted her witness statement and produced the Respondent’s list and bundle of documents as exhibits in the matter and marked as Exhibits Nos. 1-17. 5.Submissions were filed for both parties and have been duly considered. The Claimant’s Case 6.The Claimant’s case is that she was at all material times an employee of the Respondent, who was employed on 26th September 2012 as an ICT Assistant under a contract of employment. It is her case that her employment relationship was governed by the provisions of the Employment Act, 2007 of Kenya. 7.The Claimant avers that upon her appointment, and following her redeployment on 15th February 2018, she undertook a broad range of ICT and project management responsibilities, including preparing survey and wayleave project documentation and contracts, managing project data, allocating survey jobs, monitoring and updating special projects, reviewing project variations, creating facilities in the REA database, engaging with customers to gather requirements and provide solutions, conducting technical analyses and proof of concept for new technologies, collaborating with development teams, promoting the testing of software and hardware enhancements, and continuously optimizing technical solutions. 8.The Claimant avers that on 5th July 2022, the Respondent unilaterally terminated her employment without issuing proper notice. 9.The Claimant avers further that her performance was assessed by the Respondent and consistently rated as outstanding, with no complaints raised throughout her employment. She contends that her termination was unfair, unlawful, and procedurally flawed for failure to comply with the requirements of the Employment Act, 2007, and established labour practices. 10.It is her case that the dismissal lacked a valid and justifiable cause, violated the principles of natural justice, equity, and fair play, and infringed her constitutional rights as well as the protections afforded under the Employment Act, 2007. 11.The Claimant contends that the Respondent acted in disregard of the law and sought to exploit her, warranting the Court's intervention to remedy the alleged injustice. She further avers that the unlawful termination caused her mental anguish and financial hardship due to the Respondent's failure to provide valid reasons for the termination, pay accrued leave, two months' salary in lieu of notice, and salary earned up to the date of termination. 12.The Claimant also states that the Respondent's failure to resolve the matter has caused her continued anxiety and trauma, particularly because she has had no alternative source of income since her termination, and therefore prays for interest on the amounts claimed. 13.The Claimant relies on Sections 35, 36, 45, 35(3), and 51 of the Employment Act, 2007, to argue that the Respondent failed to comply with the statutory requirements governing termination of employment. She contends that she was neither issued the requisite notice nor paid salary in lieu of notice, was denied service pay and a certificate of service, and that her termination lacked both a valid reason and procedural fairness. 14.Consequently, the Claimant maintains that the termination was unfair and unlawful under the Employment Act, 2007. 15.On cross-examination, the Claimant told the court that she ought to have been employed permanently since she had worked for the Respondent for 10 years, and that her contract had been consistently renewed. 16.She confirmed that she was paid, Kes. 457,927.25/- as terminal benefits upon lapse of her contract, but she was not issued a statement detailing what the amount paid constituted. 17.It is her testimony that her last contract was to lapse in June 2022, and had previously been extended by one year. She avers that the notice issued indicated that she had been terminated and her contract was not renewed. 18.The Claimant further told court that she does not remember submitting documentary evidence to prove that she worked overtime or on public holidays and that though she claims gratuity, she could not remember whether it was provided for under her contract of service. 19.It is her position that she was not aware that the payment made included service pay. She also confirmed having picked up her certificate of service after lodging this suit. 20.The Claimant prays that the court allow her claim as drawn. The Respondents’ Case 21.The Respondent states that the Claimant was employed in 2013 and remained in its service until 2022. 22.The Respondent denies that the Claimant’s employment was wrongfully terminated without notice and maintains that the Claimant was engaged on successive fixed-term contracts. It states that her last contract was renewed for one year, running from 1st July 2021 to 30th June 2022, through a letter dated 11th May 2021. 23.It is the Respondent’s case that upon expiry of the contract, the Respondent’s Board resolved not to renew it, and the Claimant was notified of that decision by a letter dated 5th July 2022, which the Respondent contends constituted one month's notice. 24.The Respondent further avers that, upon the Claimant’s clearance, she was paid her final dues amounting to Kshs. 457,927.24. 25.The Respondent further contends that the Claimant is not entitled to service pay because statutory contributions were remitted to the National Social Security Fund (NSSF) on her behalf. It further denies liability for overtime, asserting that the Claimant’s contract did not provide for such payments, and maintains that the Claimant has failed to prove those claims. 26.Consequently, the Respondent argues that the Claimant is not entitled to the reliefs sought, describing the claim as unfounded, bad in law, and an abuse of the court process. 27.On cross-examination, RW1 told the court that the notice of termination issued to the Claimant was dated 5th July 2022 and that her contract lapsed on 30th June 2022. She confirmed that no letter was sent to the Claimant prior to the termination, notifying her that her contract would not be renewed. 28.RW1 confirmed that the Claimant had served the Respondent for 10 years, as her contract was always renewed. She further testified that the notice of termination did not give reasons for the termination of the temporary employment. 29.RW1 told the court that there was a board resolution leading to the Claimant’s termination, but that her name is not mentioned in the resolution. 30.The Respondent urges the court to dismiss the Claimant’s suit with costs. Analysis and Determination 31.Having carefully considered the pleadings, the oral and documentary evidence on record, the submissions by the parties, and the applicable law, the issues falling for determination are:i.Whether the Claimant's employment was unfairly terminated or whether it came to an end upon expiry of a fixed term contract.ii.Whether the Claimant is entitled to the remedies sought. Whether the Claimant's employment was unfairly terminated or whether it came to an end upon expiry of a fixed-term contract. 32.It is common ground that the Claimant served the Respondent continuously for approximately ten years under successive fixed term contracts, with her final contract being the one for the period between 1st July 2021 and 30th June 2022. 33.The Claimant contends that she was unfairly terminated on 5th July 2022 without notice or valid reason. Conversely, the Respondent maintains that the Claimant’s contract merely expired by effluxion of time, and that the contract was not renewed following a Board decision. 34.The Court begins by observing that under the law, a fixed term contract ordinarily terminates automatically upon expiry of its agreed term without the necessity of termination by either party. This principle has been consistently affirmed by this court and the Court of Appeal. 35.In Registered Trustees of the Presbyterian Church of East Africa & Another v Ruth Gathoni Ngotho [2017] KECA 194 (KLR), the Court of Appeal held that where parties knowingly enter into a fixed term contract, the contract terminates automatically upon expiry of the agreed period unless renewed. 36.Ordinarily, therefore, the expiry of a fixed term contract is not a dismissal attracting the procedural requirements of Sections 41, 43, and 45 of the Employment Act unless a legitimate expectation has first been established. 37.The Claimant's principal argument is that after serving continuously for ten years through successive renewals, she ought to have been confirmed as a permanent employee. 38.Courts have consistently held that successive renewal of fixed term contracts, by itself, does not create a legitimate expectation of renewal. However, repeated renewals may, in my view, when coupled with other conduct of the employer, give rise to such an expectation. 39.In Margaret A. Ochieng v National Water Conservation & Pipeline Corporation [2014] KEELRC 573 (KLR), the Court held that repeated renewals and the employer's conduct may found a legitimate expectation of renewal. 40.In my considered view, although fixed term contracts ordinarily terminate by effluxion of time, the Respondent renewed the Claimant's contracts continuously for approximately ten years without interruption of her service. Further, RW1 admitted that the Claimant's contract expired on 30th June 2022, and that the letter communicating non-renewal was issued on 5th July 2022. 41.It is then clear that no communication was issued before the expiry of the contract, notifying the Claimant that her contract would not be renewed. Further, the letter that was finally issued to her referred to ‘termination’ of her contract. 42.Ideally, an employer acting fairly ought to notify an employee before the expiry of a contract that has consistently been renewed that the contract will not be renewed. Such practice promotes fair labour practices under Article 41 of the Constitution. 43.There was no evidence that she was ever informed that renewal would cease until after the final contract expired. 44.In the circumstances of this case, the Respondent's consistent course of conduct was, in my considered opinion, capable of creating a legitimate expectation that the contract would continue. 45.Further, having failed to communicate the decision before expiry and having produced a Board resolution that did not specifically identify the Claimant, her position, or the reasons affecting her position, the Respondent failed to rebut the Claimant’s assertion of legitimate expectation. 46.This leads me to the conclusion that the decision not to renew the Claimant’s contract amounted to an unfair labour practice, and the termination an unfair termination, and so I hold. Whether the Claimant is entitled to the remedies sought Declaration of unfair termination 47.The Court having found that the continuous renewal of the Claimant’s contract for about ten years created legitimate expectation, the termination notice issued without prior notification that the contract would not be renewed amounts to an unfair termination. One month's salary in lieu of notice 48.It is not disputed that the Respondent issued the Claimant with a termination notice vide a letter dated 5th July 2022 after the expiry of her contract on 30th June, 2022. The delay, therefore, creates liability for notice pursuant to Sections 35 and 36 of the Employment Act, 2007. Twelve months' compensation 49.Having found the Claimant’s termination unfair, entitles her to compensation pursuant to Sections 49 and 50 of the Employment Act, 2007. In Alphonce Maghanga Mwachanya v Operation 680 Limited [2013] eKLR, it was held that, in determining an award of compensation, the court is to consider the 13 factors set out in Section 49(4) of the Employment Act. 50.Considering the Claimant’s long service coupled with the fact that she was employed on one yearly renewable contract, and not on permanent terms of service, I deem an award of five months’ salary sufficient compensation for the unfair termination, which is hereby awarded. Gratuity 53.Gratuity is payable only where provided by contract, collective agreement, or statute. The Claimant admitted that she could not remember whether her contract provided for gratuity. 54.No contractual clause supporting gratuity was produced. This claim, therefore, fails. Service pay 55.Section 35(6) of the Employment Act expressly excludes employees who are members of the National Social Security Fund from entitlement to service pay. The Respondent produced evidence that statutory NSSF contributions were remitted throughout the Claimant's employment. 56.The Court of Appeal in Bamburi Cement Limited v William Kilonzi [2016] KECA 546 (KLR), affirmed that an employee whose employer remitted NSSF contributions is not entitled to service pay under Section 35(5). 57.Accordingly, this claim is dismissed. Certificate of Service 58.The Claimant admitted that she has since collected her Certificate of Service. This prayer has therefore been overtaken by events. 59.In whole, the Claimant’s Claim partly succeeds and orders granted as follows: -a.A declaration that the termination of the Claimant’s employment is unfair.b.An order that the Respondent pay the Claimant:i.One Month’s salary in lieu of noticeii.Five (5) months’ salary as compensation for the unfair terminationiii.That the amount already paid and admitted by the Claimant (Kes. 457,927.25) shall be deducted from the amount awarded herein.iv.The Respondent shall bear the costs of the suit. 60.Judgment accordingly. SIGNED, DATED, AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS 25TH DAY OF JUNE, 2026.C. N. BAARIJUDGEAppearance:Mr. Ndegwa Present for the ClaimantN/A for the RespondentMs. Esther S-C/A