https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1738

H Young & Co East Africa Ltd v Ongangi (Appeal E032 of 2025) [2026] KEELRC 1738 (KLR) (19 June 2026) (Judgment) Neutral citation: [2026] KEELRC 1738 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Appeal E032 of 2025 AN Mwaure, J June 19, 2026 Between H Young & Co East Africa Limited Appellant and Peter Matieso Ongangi Respondent (Being an Appeal from the Judgment and Order of the Honourable Abdulqadir Ramadhan, Chief Magistrate, delivered on 26th May 2025 in Naivasha MCELRC NO. E072 of 2024) Judgment 1.The Appellant, being dissatisfied with the Judgment and Decree of the Honourable Abdulqadir Ramadhan, Chief Magistrate, filed this appeal vide a Memorandum of Appeal dated 10th June 2025, on the following grounds which is condensed that:1.The learned trial Magistrate erred in law and fact by failing to the Appellant’s evidence that the Claimant was hired for a project-specific contract which ended lawfully when the project concluded.2.The learned trial Magistrate erred in law and fact by mischaracterized the termination as redundancy instead of recognizing it as the natural end of a fixed-term/project contract.3.The learned trial Magistrate erred in law and fact by failing to apply or consider relevant legal precedents and principles governing employment in the construction sector and fixed-term contract.4.The learned trial Magistrate erred in law and fact by wrongly treating intermittent engagements since 2004 as continuous employment, leading to an excessive severance award.5.The learned trial Magistrate erred in law and fact by overlooking evidence that the Claimant had already been paid all lawful dues, including notice, leave, and gratuity.6.The learned trial Magistrate erred in law and fact by exercising discretion in a manner contrary to law and evidence, resulting in an unjust and unbalanced judgment. 2.The Appellant prays that:i.This Appeal be allowed in its entirety;ii.The Judgment and Decree of the Chief Magistrate’s Court at Naivasha ELRC Division in CMELRC E072 of 2024 (Hon. A. Ramadhan, delivered on 26th May 2025) be vacated and set aside in its entirety;iii.The Court do issue an order substituting the trial court’s judgment with a judgment dismissing the Claimant’s suit in its entirety and upholding the Respondent’s Defence as filed;iv.The Honourable Court do issue any other or further relief it deems just and appropriate in the circumstances;v.The costs of this Appeal and of the proceedings before the subordinate court be awarded to the Appellant. 3.The appeal was disposed of by way of written submissions. Appellant’s written submissions 4.The Appellant submitted that as a first appellate court, the duty is to conduct a fresh and comprehensive evaluation of the entire record of evidence, reanalyzing and reassessing it to reach its own independent conclusions. However, the court must remain mindful that it did not have the advantage of seeing or hearing the witnesses firsthand. This principle is firmly established in Selle & Another v Associated Motor Boat Co. Ltd [1968] EA 123, where the court held that an appellate court must reconsider and evaluate the evidence itself, while bearing in mind the limitations of not observing witness demeanor. 5.The Appellant submitted that the evidence at trial was clear and consistent: PW1 admitted that his engagement was tied to the Olkaria project, that his work was intermittent, and that upon exit he received salary in lieu of notice, accrued leave, and a certificate of service facts incompatible with redundancy. DW1 corroborated this, testifying that the Respondent was engaged specifically for the Olkaria 1 AU6 project, and upon its completion and handover to KenGen workers were released with full terminal dues, without any internal reorganization or abolition of roles. The Appellant argued that redundancy is defined as a statutory process under Sections 2 and 40 of the Employment Act, requiring proof of organizational restructuring or abolition of office, not mere reduction of workload. The Court of Appeal in Thomas De La Rue (K) Ltd v Omutelema [2013] KECA 492 (KLR) where the court emphasized that redundancy must be pleaded and executed in strict compliance with statute, while in Kenya Airways Ltd v Aviation & Allied Workers Union Kenya & 3 others [2014] KECA 404 (KLR) it was reaffirmed that diminished work alone does not constitute redundancy. 6.The Appellant submitted that the trial court erred by conflating reduced workload with redundancy, disregarding uncontroverted evidence of a project-based engagement that ended through a contractual notice mechanism. Properly re-evaluated, the separation was a lawful contractual exit, not redundancy within the meaning of the Employment Act. 7.The Appellant submitted that the evidentiary record leaves no doubt that the Respondent’s engagement was project-based, tied specifically to Olkaria (AU and AU Extension), with no absorption into permanent employment, redeployment, restructuring, or abolition of office. Both PW1 and DW1 confirmed that the Respondent was released upon project completion and paid all terminal dues, including notice and accrued leave. The Appellant argued that courts are bound to enforce contracts as written, not to rewrite them. The Court of Appeal cases in Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho- Kariuki [2017] KECA 194 (KLR) and Transparency International Kenya V Teresa Carlo Omondi [2023] KECA 174 (KLR) emphasized that project-tethered or time-bound engagements do not morph into permanent employment or create unwarranted expectations. The Supreme Court in Macharia & another v Kenya Commercial Bank Ltd & 2 Others [2012] KESC 8 (KLR) further underscored that courts cannot rewrite contracts under the guise of equity. Against this settled authority, the trial court erred by imposing redundancy obligations where none existed, disregarding the express termination clause. On proper re-evaluation, the Respondent’s separation was a lawful contractual termination, not redundancy, warranting appellate correction to restore fidelity to contract and principle. 8.The Appellant relied on Section 35 of the Employment Act which expressly recognizes termination by notice, and where parties have agreed to such a clause and it is duly complied with, the termination is lawful unless tainted by illegality. The Court of Appeal case in Isindu v Lavington Security Guards Ltd [2017] KECA 225 (KLR) clarified that an employer must prove the reason for termination under section 43 of the Employment, show that it was valid and fair under section 45 of the Employment Act, and justify the decision under section 47(5) of the Employment Act. In this instant appeal, the Appellant argued that the employer’s reason was purely project-related, not misconduct or incapacity, and separation was effected strictly in line with the contractual notice clause a fact admitted by PW1. By paying notice in lieu and settling terminal dues, the employer discharged its statutory burden. To recharacterize this lawful contractual termination as redundancy imposes obligations neither contemplated by the Employment Act nor the contract. The trial court’s finding therefore amounted to rewriting the parties’ bargain and misapplying the law, warranting appellate correction. 9.The Appellant submitted that the record demonstrates that the Respondent’s engagement was project-based, intermittent, and specifically tied to the Olkaria project, with PW1 admitting gaps in service and DW1 confirming the operative period as 2020 to 2022. In Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho-Kariuki (supra), the Court of Appeal held that discrete, time-bound engagements cannot be collapsed into a single indefinite contract absent express agreement, and continuity of employment must be proved, not inferred. The trial court’s finding of 17–18 years’ continuous service was therefore a misdirection, substituting conjecture for proof. 10.The Appellant submitted that the remedies awarded for severance under section 40(1)(g) of the Employment Act and compensation under section 49 of the Employment Act were legally unsustainable, as severance arises only upon redundancy and compensation only upon unfair termination, neither of which was proved. The impugned judgment disregarded clear admissions, ignored uncontroverted defense evidence, and misapplied the law. Under Selle v Associated Motor Boat Co. Ltd(supra) and Mbogo v Shah [1968] EA 93, this appellate court must intervene where a trial court misapprehends evidence or applies wrong principles. Properly evaluated, the Respondent’s separation was a lawful contractual termination pursuant to notice, not redundancy. 11.The Appellant urged the court to allow the appeal, the judgment set aside, and with costs. Respondent’s written submissions 12.The Respondent submitted that he worked continuously for the Appellant from 2004 to 2022 without a written fixed-term contract. An employment form dated 2nd June 2020 confirmed his engagement as a structural welder at Olkaria 1 AU6, but it did not specify any end date or link his employment to the completion of the Appellant’s contract with Kengen. Although the Appellant produced project completion documents from Kengen, these did not show the Respondent as a party to that agreement. The Respondent’s evidence, including cross-examination, established that he was consistently assigned to various sites and projects, reinforcing that his employment was ongoing and not tied to a fixed-term arrangement. 13.The Respondent emphasized that he was not a casual or project-based worker but a permanent employee of the Appellant. Although he was assigned to different projects over time, his continuous service from 2004 established that he remained under the Appellant’s employment throughout, thereby reinforcing the permanency of his contract. 14.The Respondent submitted that the Appellant terminated his employment citing “reduction of workload,” which falls squarely within the statutory definition of redundancy under section 2 of the Employment Act. The Respondent argued that redundancy occurs when employment is lost involuntarily due to diminished work, making the employee’s services superfluous. Since the termination letter itself expressly referred to reduced workload, the Respondent’s exit was clearly by way of redundancy. The Appellant’s later attempt to reframe the termination as the “end of contract” was inconsistent with its own stated reason and amounted to an afterthought aimed at avoiding statutory obligations. 15.The Respondent relied on section 40 of the Employment Act which provides as follows:An employer shall not terminate a contract of service on account of redundancy unless the employer complies with the following conditions—a.where the employee is a member of a trade union, the employer notifies the union to which the employee is a member and the labour officer in charge of the area where the employee is employed of the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy;b.where an employee is not a member of a trade union, the employer notifies the employee personally in writing and the labour officer;c.the employer has, in the selection of employees to be declared redundant had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy;d.where there is in existence a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy; the employer has not placed the employee at a disadvantage for being or not being a member of the trade union;e.the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash;f.the employer has paid an employee declared redundant not less than one month's notice or one month's wages in lieu of notice; andg.the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days pay for each completed year of service.Subsection (1) shall not apply where an employee's services are terminated on account of insolvencyas defined in Part VIII in which case that Part shall be applicable.The Cabinet Secretary may make rules requiring an employer employing a certain minimum number of employees or any group of employers to insure their employees against the risk of redundancy through an unemployment insurance scheme operated either under an established national insurance scheme established under written law or by any firm underwriting insurance business to be approved by the Cabinet Secretary.” 16.The Respondent submitted that the Appellant’s termination of the Respondent was procedurally flawed, as no one‑month notice was issued to either the Labour Officer or the employee, nor were consultations or fair selection criteria undertaken as required under section 40(1)(c) of the Employment Act. Although the termination letter cited reduced workload, implying that other employees remained, the Appellant failed to demonstrate objective selection or pay severance dues. In Francis Maina Kamau v Lee Construction [2014] KEELRC 788 (KLR), the court stated that such failure to comply with statutory redundancy procedures rendered the termination unfair under section 45 of the Employment Act. 17.In Lucky Mwendwa Mutuse v Proto Energy Limited [2025] KEELRC 1712 (KLR) the court found that the employer failed to comply with redundancy procedures under section 40(1)(b) of the Employment Act, which requires concurrent notice to both the employee and the labour officer. The court held that the redundancy was used unlawfully to dismiss the Claimant, noting the lack of consultation, failure to release disciplinary outcomes, and backdating of the termination letter. Testimony suggesting multiple staff were affected was contradicted by evidence showing only one redundancy was notified. The Respondent submitted that applying sections 43 and 45(2) of the Employment Act, the court emphasized that employers must demonstrate both valid reasons and fair procedure, and concluded that the appellant’s failure to follow statutory requirements rendered the termination procedurally and substantively unfair. 18.The Respondent argued that the trial magistrate’s award was fair, reasonable, and consistent with the Employment Act. It emphasizes that the redundancy was properly deemed unfair because the appellant failed to comply with statutory requirements, particularly the obligations of consultation and notice under the Act. The Respondent also argued that the Appellant’s redundancy decision was arbitrary and discriminatory, as no clear criteria were shown for selecting the respondent’s position for termination. 19.The Respondent submitted that he sought for severance pay and compensation for unfair redundancy, which the trial magistrate granted in line with section 40 of the Employment Act, entitling employees to at least 15 days’ pay per year of service. The magistrate found that the Appellant failed to meet statutory obligations under sections 42 and 45, including proper notice, consultation, and exploring alternatives, making the termination unfair. After considering evidence such as contracts and testimony, the magistrate’s award was deemed procedurally and substantively sound, and the respondent now urges the appellate court to uphold the severance and compensation award, along with costs. 20.The Respondent therefore urged the appellate court to uphold the trial court’s award and dismiss the appeal with costs. Analysis and determination 21.Being the first appeal, it is the court’s duty to reassess the evidence presented, conduct its own analysis, and reach independent conclusions in order to determine whether the trial court’s findings align with both the evidence and the applicable law. The court should, however, bear in mind that it did not see the witnesses as they testified and give due allowance. (See Selle v Associated Motor Boat Co Ltd & Others [1968] EA 123 and Peters vs Sunday Post Limited (1968) EA 123) 22.Having considered the Memorandum of Appeal, the Record of Appeal and the submissions of the parties the issues for determination are as follows:a.Whether the Respondent’s employment converted from a fixed contract to continuous employment until his termination;b.Whether the Appellant followed the procedure set out in section 40 of the Employment Act; in terminating the Respondent’s contract through redundancy.c.Who should bear the costs of the appeal. 23.Section 37(1) of the Employment Act provides as follows:“Notwithstanding any provisions of this Act, where a casual employee—(a)works for a period or a number of continuous working days which amount in the aggregate to the equivalent of not less than one month; or(b)performs work which cannot reasonably be expected to be completed within a period, or a number of working days amounting in the aggregate to the equivalent of three months or more, the contract of service of the casual employee shall be deemed to be one where wages are paid monthly and section 35(1)(c) shall apply to that contract of service.” 24.In Nanyuki Water & Sewage Company Limited v Benson Mwiti Ntiritu & 4 others [2018] KECA 196 (KLR) the Court of Appeal held as follows:“The manouvre adopted by the appellant in declining to testify served only to give credence to the respondents' version of events, and we do not blame the trial court for its summary conclusion that the respondents were engaged as casual employees and that they had worked for a period of continuous days equivalent in aggregate to not less than a month and the job they performed could not reasonably be completed in less than three months or more. Consequently, we find and hold, as the trial court did, that the contracts of service of the respondents assumed permanency and were "deemed to be ones where wages are paid monthly and section 35 (1) (c) shall apply to that contract of service" in terms of section 37.” 25.In this instant appeal, the Respondent averred that he had rendered service to the Appellant for a period of eighteen (18) years from 2004 to July 2022 whereas the Appellant contended that the Respondent was engaged under a fixed-term contract. Upon consideration of the evidence and the applicable law, the court is of the view that the Respondent’s employment was converted from casual to permanent status pursuant to section 37(1) of the Employment Act. The letter of employment produced in court as part of Respondent’s documents show the letter was issued on 26th February 2015. It is not clear from the letter the duration of the contract. The certificate of service issued by the Appellant indicates Respondent was employed from 2nd June 2020 to 21st July 2022. It refers to date of leaving but does not indicate it is the date of expiry of the contract. 26.On the issue of redundancy, this court reiterates the provisions of section 40 of the Employment Act, noting that the Appellant failed to adhere to the mandatory procedure of notifying both the Respondent and the Labour Office of their decision to declare the Appellant’s contract redundant. Further, the Appellant did not discharge its burden under section 47(5) of the Employment Act to justify the termination, nor did it comply with the requirements of procedural fairness and substantive justification as set out under sections 41, 43, and 45(2) of the Employment Act. In reaffirming the principles established in Isindu v Lavington Security Guards Ltd (supra) and Lucky Mwendwa Mutuse v Proto Energy Limited (supra), the courts underscore that redundancy must be conducted in strict compliance with statutory provisions, ensuring both procedural fairness and substantive justification. Accordingly, the Appellant’s actions fell short of the law, rendering the termination unfair and unlawful. 27.The court is aware the Appellant has not provided the fixed contract and so cannot be expected to presume there was a fixed contract in absence of any documents to prove so.The termination letter issued on 21st July 2022 state that the Respondent’s employment was terminated due to reduced workload. At no point did the Appellant allude to afluxion of time. If at all the Respondent and Appellant had signed a fixed contract it would have been produced and would have been straightforward. 28.Infact, there is no clear Employment documents to show the period the Respondent worked for the Appellant except that letter dated February 2015. In the Appellant’s pleadings in the lower court however, they admitted the Respondent was employed by the Appellant in the year 2004, but not continuously.The court holds that he who alleges must prove (Evidence Act Section 107-109).The Appellant should have provided the various fixed contracts if at all there were such contracts. In the absence of the same, the court will give the Respondent the benefit of doubt and hold that he was employed on permanent basis from 2004 until the time of termination. 29.Flowing from the foregoing, the court upholds the decision of the trial court and finds that the appeal lacks merit thus it is therefore dismissed in its entirety. 30.The award given by the trial court is sport on and this court will uphold the same. 31.Each party to bear its own costs of this appeal but the costs of the lower court trial will be borne by the Appellant.Orders accordingly. Dated, Signed and Delivered virtually at Nakuru this 19th Day of June, 2026.ANNA NGIBUINI MWAUREJUDGEORDERIn view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open Court. In permitting this course, this Court has been guided by Article 159(2)(d) of the Constitution which requires the Court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this Court the duty of the Court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.A signed copy will be availed to each party upon payment of Court fees.ANNA NGIBUINI MWAUREJUDGE