[2025] KEELRC 12 (KLR)

Nduva v Halar Industries Limited (Appeal E037 of 2023) [2025] KEELRC 12 (KLR) (14 January 2025) (Judgment)

Neutral citation: [2025] KEELRC 12 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Appeal E037 of 2023

JW Keli, J

January 14, 2025

Between

Joseph Mutua Nduva

Appellant

and

Halar Industries Limited

Respondent

(An appeal from the Judgment of Honourable Kagoni E.M.(PM) delivered on 27th February 2023 in Milimani Commercial Courts CMELRC No. E854 OF 2021 Joseph Mutua Nduva v Halar Industries LimitedAn appeal from the Judgment of Honourable Kagoni E.M.(PM) delivered on 27th February 2023 in Milimani Commercial Courts CMELRC No. E854 OF 2021 Joseph Mutua Nduva v Halar Industries Limited)

Judgment

1. The Appellant being dissatisfied with the entire Judgment of the Hon. E.M. Kagoni (PM) delivered on 27th February 2023 in Milimani Commercial Courts MCELRC E854 of 2021 between Joseph Mutua Nduva V Halar Industries Limited filed the Memorandum of Appeal dated 27th March 2023 and record of appeal received in court on 28th October 2024 seeking the following Orders:-a)That this honourable court upholds this appeal.b)This honourable court proceeds to consider the facts and award the appellant remedies as pleaded in the trial court.c)The respondent bears the costs in this appeal and in the trial court.

2. The Appeal was premised on the following grounds:a)That the learned trial magistrate erred in law and in fact by holding that the Appellant's claim lacked merit.b)The learned trial magistrate erred in law and in fact by failing to consider the appellant's pleadings, evidence and submissions.c)The learned trial magistrate erred by dismissing the Appellant's claim with costs.

Background to the appeal 3. The Appellant filed a memorandum of claim before the Trial Magistrate Court stating to have been employed as casual labourer by the Respondent from April 2010. He stated that on the 28th June 2029 his services were casually terminated without notice or reason. He sought for compensation for wrongful termination as well as other reliefs (at pages 6-19 of record of appeal (of RoA) was the memorandum of claim and witness statement and documents of the appellant). The claim was opposed (at pages 20-91 of RoA was the response pleadings and documents). The appellant filed reply to the response (page 92 of RoA)

4. The Appellant testified on oath in his case and was cross-examined (page 144 of RoA). The Respondent called as defence witness Geoffrey Matunda (RW) who testified on oath and was cross-examined (pages 145-146 of RoA).

5. The parties filed written submissions. The trial court on the 27th of February 2023 delivered judgment and held that the claim lacked merit and dismissed it with costs to the Respondent(Page 151 of RoA).

Written Submissions in Appeal 6. The appeal was canvassed by way of written submissions. The appellant’s written submissions drawn by Situma Nyongesa & Company Advocates were dated 18th November 2024. The respondent’s written submissions drawn by Timothy Got Ondego Advocates were dated 16th December 2024.

Determination 7. The Court was sitting on the first appeal. The duty of the court sitting as the first appellate court is as stated in Abok James Odera T/A A.J Odera & Associates v John Patrick Machira T/A Machira & Co. Advocates [2013] KECA 208 (KLR) thus,‘’ This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and re-analyze the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way. ‘

Issues for determination 8. The Appellants in written submissions identified the following issues for determination: -a.Were there valid employment contracts between the parties?b.Did the appellant’s employment convert by virtue of section 37 of the Employment Act?c.Was the appellant’s employment terminated unlawful and/ unfairlyd.Is the appellant entitled to remedies sought

9. The Respondent in written submissions identified the following issues for determination: -a.Was the appellant employed on fixed term basisb.Was the appellant a casual employeec.Was their conversion of the appellant’s employment status to permanent and pensionable.d.Was the appellant wrongly terminated from employmente.Is the appellant entitled to compensation?f.Costs.

10. Having perused the issues identified by the parties the court was of the considered opinion that the issues placed by the parties for determination in the appeal were as follows: -a.Whether the Appellant was a casual employee or on a fixed term contractb.Whether the termination of the appellant’s employment was lawful and fairc.Whether the appellant was entitled to the reliefs sought.d.Costs

Whether the Appellant was a casual employee or on a term contract 11. The appellant pleaded in his memorandum of the claim that he was engaged for 9 years as a casual labourer (page 6 of RoA). The appellant in his witness statement dated 30th April 2021 and adopted as his evidence in chief during the trial, stated as follows with respect to the employment: - He started working for the respondent in April 2010 as a general causal labourer and was paid weekly. In May 2010 he started getting a monthly salary and working as a general worker. In the year 2018, he was a machine operator. That he remained an employee of the respondent working and receiving salary continuously from 2010 to June 2019 when his employment was terminated without notice. The appellant further stated that the respondent used to ask them to sign documents every 3 months and that they were never allowed to read or keep copies. That sometimes they could continue working before signing the documents but still received monthly salary whether or not they signed the documents (Paragraphs 2-4 of the statement at page 10 of RoA).

12. During cross-examination the Appellant told the court that he was a casual and later permanent employee. In re-examination, he told the Trial Magistrate Court that they were not shown the documents they signed (Page 144 of RoA).

13. The Respondent pleaded in paragraph 19 of its statement of defence that it had engaged the Appellant on fixed-term contracts of three months (pages 33 -71 of RoA were copies of contracts issued to the appellant. The payslips and clearance certificates were also produced).

14. During the cross-examination of the respondent’s witness (RW), the witness stated that the appellant had been engaged in April 2010 as a casual worker. That the contract forms produced in court had been signed but had no name of the person signing. That the appellant was issued with the contracts which he read and understood before signing. During re-examination, RW told the trial court that the contracts were signed every three months (page 145 of RoA).

15. In its judgment the Trial Magistrate Court held that the Appellant had pleaded in paragraph 4 of his witness statement that he was issued with contracts every three months and the only issue was that he was not allowed to read before signing. The Trial Magistrate Court held that the issue was not raised during the entire period of employment and was thus an afterthought following the non –renewal of contract. The Trial Magistrate Court cited as authorities of the court Nancy Samba Matunda & James Chiro Tunje v Lightex Limited (2017)e KLR and in Wachie Richard Sindani & 10 others V Builders Depot Limited (2019)e KLR to effect that the said contracts were valid as no complaint was raised during renewal and that the complaint after non-renewal was afterthought.

16. The appellant submitted that the trial court held that the contract dated 2nd January 2019 was not signed by the appellant. He submitted that the contracts were in English and the appellant was not explained and was not allowed to retain copies. That there were no witnesses though signed but without names of the alleged witnesses. The appellant further submitted that The “Notice” And “confirmation” parts of the contracts were always signed at the same time, however, the date on the “Confirmation” part was always post-dated to 2 or 3 months ahead. That this was highly irregular and constituted unfair labour practice because an employee cannot purport to confirm, 3 months in advance, to having received full dues at the end of his contract, unless the employee was coerced to sign or he did not understand what he was signing. That this kind of practice should not be entertained by this court. That the said fixed term contracts produced and relied on by the respondent did not meet mandatory requirements of sections 9(3) and 4 of the Employments Act and the same were null and void. The appellant submitted there was no contract between the parties.

Respondent’s submissions 17. The Respondent relied on the decision of the Court of Appeal in the case of Krystalline Salt Limited v Kwekwe Mwakele & 67 others (2017) e KLR on types of employment, thus : “The Employment Act recognizes four main types of contracts of service: contract for an unspecified period of time, for a specified period of time, for a specific task (piece work) and for casual employment.” The Respondent submitted that it did engage the Appellant on fixed term contract basis and the contract period was clearly captured in the Appellant’s respective fixed term contracts. (The contracts were at pages 33 - 72 of RoA ). The Respondent relied on the decision of the Court of Appeal, in a judgment delivered on the 17th February 2023, in Civil Appeal 81 of 2018, Transparency International Kenya vs Teresa Carlo Omondi at paragraph 20 where it was held that: “There is no dispute that the appellant employed the respondent on a two-year fixed term contract from 1st October 2010 to 30th September 2012. It is trite law that a fixed term contract of employment is a lawful mode of employment with a start and end date.”

18. The Respondent submitted that Honourable E. M. Kagoni (PM), in his judgment delivered on the 27th of February 2023, further acknowledged that the Appellant had indeed been engaged on various fixed-term contracts as brought out by the Appellant’s witness and confirmed by the Appellant during his examination. This was captured in paragraphs 1 and 2 on page 148 of the Record of Appeal. The Judgment is at pages 147 – 152. The Respondnet relied on the decision of Honourable Justice M. Mbaru in the case of Samuel Chacha Mwita v Medical Research Institute (2015) eKLR at paragraph 26 who held that: “Where parties enter into an employment contract, such a contract by mutual agreement can be for permanent employment, for a fixed period or and or term, seasonal, or as the case may be. Such time fixing is for the parties to agree upon or based on the needs of each party. Such a contract is then executed by the parties and becomes enforceable. The court cannot interfere with its terms unless any term is contrary to the law. Therefore, where parties agree to end the contract at a fixed date, the other cannot allege breach. To do so would be to defeat the very essence of having agreed on the fixed term of the contract in the first instance.”

19. The Respondent contended that the Appellant had been voluntarily signing and entering into his various fixed-term contracts and at no point in time intimated to the Respondent company that he did not understand the terms of his fixed-term contract. The Appellant was engaged on a fixed term basis from the first time he was employed by the Respondent company, a fact which he accepted when he claimed that when being employed, he was given a document to sign and which contained his employment terms and conditions. This was captured in the typed proceedings on page 144 of our Record of Appeal.

20. The Respondent further submitted that the appellant confirmed the validity of each fixed-term contract he was engaged under by claiming the salary and other benefits for the period of each fixed-term contract up to the last fixed-term contract which expired on the 30th June 2019. That the Appellant cannot therefore approbate and reprobate at the same time. That from the Appellant’s contracts it was evident that he was employed for a fixed period and of which employment term expired on the 30th June 2019 (The last fixed term contract was at pages 33 – 36 of RoA). That Justice M. Mbaru in the case of Samuel Chacha Mwita v Medical Research Institute (2015) eKLR at paragraph 32 held that: “…. The employment contract governing the terms and conditions of service was by mutual agreement to the extent that the time period to end the same was settled. This is not in violation of any law or of the constitution.” That the Court of Appeal in the case of Emmanuel Musembi Nthambi v Tarmal Wire Products Ltd (2019) eKLR at paragraph 15 held that: “The learned Judge found that the appellant’s employment was based on contract and not otherwise. The contract was for a fixed term and upon expiry, the respondent exercised its discretion not to renew it.”

Decision 21. The court having perused the pleadings before the trial magistrate court and the proceedings finds that the parties were in agreement that the appellant was initially engaged as casual and thereafter signed fixed-term contracts every 3 months. The court agreed with the Trial Magistrate Court that the Appellant did not plead coercion to vitiate the said contracts. On the issue of the signature of the contract document of 2nd January 2019, the Court holds that the Trial Magistrate Court did not decide on the signature validity save to state the appellant denied that was his signature. The court finds that the submissions by the appellant challenging the validity of the contracts with the respondent were not pleaded before the Trial Magistrate Court. It is trite that parties are bound by their pleadings. The appellant pleaded in paragraph 4 of his witness statement that he was on three months’ contracts with the Respondent.

22. The appellant in paragraph 7 of his witness statement stated that as at the time of termination of his employment on 28th June 2019, his basic monthly salary was Kshs. 15,382. Casual work is as defined under the Employment Act section 2 thus:- "casual employee" means a person the terms of whose engagement provide for his payment at the end of each day and who is not engaged for a longer period than twenty-four hours at a time’’. The court finds that from the pleadings of the appellant, he was not a casual employee as defined under the Employment Act. The issue of being a casual employee could therefore not arise and consequently, section 37 of the Employment Act on conversion of casual employment to contractual was inapplicable.

23. The court upholds the Trial Magistrate Court decision that the appellant was on a fixed term contract of employment.

Whether the termination of the appellant’s employment was lawful and fair 24. On perusal of the record the court found no evidence was produced by the appellant on the termination. The appellant pleaded in paragraph 5 of witness statement that on 28th June 2019 he reported to work for his shift of 1pm. That around 2. 30 pm everything was shut down and an urgent meeting of employees was called and they were informed they would no longer continue working there. They were instructed to vacate the premises, and the police were called to enforce the non-entry to the premises by the employees. The appellant submits that he was not notified that his contract had been terminated and or given reasons for the termination in accordance with the provisions of sections 35(1), 43 and 45 of the Employment Act.

25. In defence the respondent stated that on the 30th June 2019, the fixed contract of employment of the appellant came to an end releasing it from any further contractual obligations. That they had pending bills with Kenya Power which disconnected power leading to an outage. That they honoured the obligations of the claimant for the contract period. The Respondent relied on the contract of three months dated 1st April 2019 (page 33 of RoA).

Decision 26. The Trial Magistrate Court on the issue stated: - ‘’ I have considered the contract dated 01. 04 2019 which the claimant admitted to have signed, under cross-examination, save for the signature at 02. 01. 2019. I have also taken note that the contract was set to expire on 30. 06. 2019. Even if the contract was terminated on 28. 06. 2019 the claimant was entitled to reliefs as per the contract and which contract does not provide any reliefs for the claimant in the event it is terminated early by the Respondent. ‘’ The court then dismissed the claim with costs.

27. The appellant stated in his witness statement that on 28th June 2019 everything was shut down and the employees were called to a meeting and informed that they would no longer work there. They were informed to vacate the premises and police called to reinforce the order. That he was paid upto June 2019 including NSSF dues.

28. The last employment contract was for three months effective from 1st April 2019. The appellant states his employment was stopped on 28th June 2019 and his salary and NSSF were paid. The court finds that the obligations under the contract of three months were met. The Court holds that the Appellant held a fixed contract of three months and stoppage of work two days before expiry could not reasonably amount to unfair termination when the full salary for the contract period and benefits were paid.

29. The appellant submits that the termination did not comply with provisions of sections 35(1), 43 and 45 of the Employment Act. Section 35(1) states:- ‘’ A contract of service not being a contract to perform specific work, without reference to time or to undertake a journey shall, if made to be performed in Kenya, be deemed to be—(a)where the contract is to pay wages daily, a contract terminable by either party at the close of any day without notice;(b)where the contract is to pay wages periodically at intervals of less than one month, a contract terminable by either party at the end of the period next following the giving of notice in writing; or(c)where the contract is to pay wages or salary periodically at intervals of or exceeding one month, a contract terminable by either party at the end of the period of twenty-eight days next following the giving of notice in writing.’’Section 43 of the Employment Act states:-(1)In any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45. (2)The reason or reasons for termination of a contract are the matters that the employer at the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee.Section 45 of the employment Act states:-‘’1)No employer shall terminate the employment of an employee unfairly.(2)A termination of employment by an employer is unfair if the employer fails to prove—(a)that the reason for the termination is valid;(b)that the reason for the termination is a fair reason—(i)related to the employees conduct, capacity or compatibility; or(ii)based on the operational requirements of the employer; and(c)that the employment was terminated in accordance with fair procedure.(3)An employee who has been continuously employed by his employer for a period not less than thirteen months immediately before the date of termination shall have the right to complain that he has been unfairly terminated.’’

30. As stated earlier, the parties did not address the issue of unfair termination during the viva voce proceedings. The court found no evidence of notice or hearing before the termination as outlined in section 45 of the Employment Act (supra). The Respondent’s position was that the Honourable E. M. Kagoni(Trial Magistrate Court) was correct in holding that the Appellant was not wrongfully terminated from his employment as the contract, rightfully expired on the 30. 6.2019. That the Appellant had been engaged on a fixed term basis, of which fixed term contract expired due to effluxion of time when the term stated therein came to an end. That the issue of termination of the Appellant’s employment does not arise in this instance given the fact that his contract was not terminated, but the same expired at the end of its respective term due to effluxion of time, and, in the process releasing the Respondent Company from any and/or all of its obligations in the fixed term employment contract.

31. The Respondent relied on the decision of the Court of Appeal, in a judgment delivered on the 17th February 2023, in Civil Appeal 81 of 2018, Transparency International Kenya vs Teresa Carlo Omondi where it held at paragraph 24 held that: “…Indeed, the doctrine of legitimate expectation does not arise in the renewal of a fixed term contract and its non-renewal cannot constitute unfair termination or dismissal. Having noted that the respondent was in employment under a fixed-term contract and that the contract came to an end at the appointed time, we are of the view that any relief sought by the respondent on the basis of her assertion that her employment was unfairly terminated was automatically not available to her. The Court of Appeal decision in Registered Trustees of the Presbyterian Church of East Africa & Another vs Ruth Gathoni Ngotho (2017) eKLR lends credence to our holding, where the Court pronounced itself, ‘Bearing the foregoing in mind, we note that fixed term contract carries no rights, obligations, or expectations beyond the date of expiry. Accordingly, any claim based after the expiry of the respondent’s contract ought not to have been maintained. This is in relation to the salary of the months 5th April up to May 2010. Similarly, since the respondent’s contract came to an end by effluxion of time any claim for wrongful termination could not be maintained.’’ In the case of Samuel Chacha Mwita vs Kenya Medical Research Institute (2014) eKLR, Mbaru J. observed that: “…Under these provisions of the law, parties entering into an employment relationship can enter into a written contract that is permanent, fixed term, periodic or seasonal based on the need, purpose or the interests of persons involved…The Court as guided by the provisions of section 10 of Employment Act will give the ordinary meaning to any written agreement between parties unless there is proof that there is ambiguity on the face of the contract…fixed term employment contract is, for example, entered into for a period of six months with a contractual stipulation that the contract will automatically terminate on the expiry date, the fixed term employment contract will naturally terminate on such expiry date, and the termination thereof will not (necessarily) constitute a dismissal, as the termination thereof has not been occasioned by an act of the employer. There is a definite start and a definite end. Thus, the contract terminates automatically when the termination date arrives; otherwise, it is no longer a fixed term contract…’’. The Court of Appeal in the case of The Registered Trustees De la Salle Christian Brothers T/A St. Mary’s Boys Secondary School vs Julius D. M. Baini (2017) eKLR at paragraph 20 held that: “It is our finding that the respondent’s contract ended on 31st December 2014. There was no obligation on the appellant to give notice of expiry or information that it would not be renewed.”

32. Relying on the forgoing decision the Respondent submitted that it had no legal obligation to issue the Appellant with notice of termination of a fixed term contract where there was an ascertained date of expiry and all parties involved were well aware of said date of expiry of the fixed term contract.

33. The court having re- evaluated the evidence before the Trial Magistrate Court finds that the contract of 1st April 2019 was not in dispute and was for three months. The termination vide stoppage of operations was on 28th June 2019 shy of 2 days before the end of contract. The Appellant admitted he was paid as per the contract for the three months. The court upholds the position by the Court of Appeal in The Registered Trustees De la Salle Christian Brothers T/A St. Mary’s Boys Secondary School vs Julius D. M. Baini (2017) eKLR at paragraph 20 where it was held that: “It is our finding that the respondent’s contract ended on 31st December 2014. There was no obligation on the appellant to give notice of expiry or information that it would not be renewed.” The court finds that section 35(1), 43 and 45 of the Employment stand complied with where the contract terminates by effluxion of time as is the case in fixed-term contracts like one held by the appellant. Consequently, the Court finds no basis to disturb the decision of the Trial Magistrate Court that the claim lacked merit and is dismissed with costs.

Conclusion 34. The appeal is held to lack merit and is dismissed. To temper justice with mercy this having been an employment claim, the court exercises discretion on the issue of costs and orders each party to bear own costs in the appeal. This position is guided by the same authority of Court of Appeal in The Registered Trustees De la Salle Christian Brothers T/A St. Mary’s Boys Secondary School vs Julius D. M. Baini (2017) eKLR where the court held:- ‘’This appeal is meritorious and we allow it. We set aside the orders of the lower court and substitute therefor an order dismissing the claim filed on February 10, 2015. We make no orders as to costs here and in the court below, the appellant being a retiree who was acknowledged by the appellant as having generally rendered good services to the school.’’ It is so Ordered.

DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 14THDAY OF JANUARY, 2025. JEMIMAH KELI,JUDGE.In The Presence Of:Court Assistant:- OtienoAppellant : -Situma NyongesaRespondent:-AbsentJudgment Nairobi Appeal No. E037 OF 2023 Page 7 | 7