Ngaruiya & 22 others v Child Welfare Society of Kenya (Cause E617 of 2021) [2026] KEELRC 2323 (KLR) (28 July 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT** **AT NAIROBI** **CAUSE NO. E617 OF 2021** *(Before Hon. Justice Abuodha Jorum Nelson)* **KENNETH NGIGI NGARUIYA …………………………….1ST CLAIMANT BENARD OCHIENG OKUMU……………………………..2ND CLAIMANT** **JAMES NJUGUNA KIMANI…………………….…………3RD CLAIMANT** **MARY WAMBUI KAMAU……………………………….... 4TH CLAIMANT** **PETER MWANIKI NJUGUNA ……………………………. 5TH CLAIMANT** **ANN NJERI KANGETHE……………………………….....6TH CLAIMANT** **AGNES NTHENYA NDUNDA…………………………….. 7TH CLAIMANT** **BERNARD LEMISO TIAMPATI…………………………8TH CLAIMANT BROOKE CARRINTON ABUYA OLONDE……………9TH CLAIMANT** **BRIAN NYARIKI OPANDE………………..…………..…10TH CLAIMANT** **JANET ANYANGO OLUOCH………………………..…..11TH CLAIMANT** **JOAB AYOO……………………………………………...…12TH CLAIMANT** **KELVIN KIMULU EYASE …………………..……….….13TH CLAIMANT** **BRIAN ODHIAMBO OPIYO………………………………14TH CLAIMANT** **MAUREEN MARESI MBWANGA………………………..15TH CLAIMANT** **REUBEN KAZEI SALIM………………………………..…16TH CLAIMANT SALLY MKAWURA KILILO……..……...................…17TH CLAIMANT** **ALBERT ANYWENYI ALOYS…………………………...18TH CLAIMANT GRACE NJOKI NG'ANG'A………………………………..19TH CLAIMANT SUSAN NDEDE BUZUEI ………………………………..20TH CLAIMANT MARY WAIRIMU NJUGUNA………………….……...…21ST CLAIMANT** **PETER MUHIA WAMBUGU………………………….... 22ND CLAIMANT** **ROSE KUBNO CHANDIKU…………………..………….23RD CLAIMANT** **VERSUS** **CHILD WELFARE SOCIETY OF KENYA……….……. RESPONDENT** **JUDGMENT** 1. The Claimants through their Memorandum of Claim dated 30th July, 2021 pleaded *inter alia*: - * 1. *At all material times the Claimants were expressly and impliedly employees of the Respondent vide employment contracts, renewable after every one-year, which contracts were normally signed at random at the whims of the Chief Executive Officer one, Irene Muriithi toward the end of every financial year.* 2. *The employment of the Claimants was subject to salaries, allowances and other benefits and the Claimants contract of employment stipulated amongst other things that the Claimants were to be paid a net salary per month subject to applicable legal statutory deductions ranging from Kshs 20,000/= to Kshs 145,200/=* 3. *The Claimants diligently and with all due honesty served the Respondent throughout their employment until sometimes on 19/12/2019 when the Claimants were orally sent on compulsory leave and further barred from accessing their offices and or taking their personal belongings, effects and items and to date they have never been allowed to resume work and are ready, willing, energetic and able to continue with such service.* 4. *That on January 2020 the Respondent reopened the office with few selected employees discriminating the Claimants and leaving the other employees outside without any form of communication regarding their employment status despite all the employees including the Claimants continuing to receive their salaries until month of June 2020.* 5. *That the Respondent further discriminated them by refusing to pay them their monthly salaries starting from the month of July 2020 while the rest of employees continued earning their salaries without fail despite being still in the forced compulsory leave and out of their working stations like the Claimants herein.* 6. *That they remain employees of the Respondent for all purpose and intent and pursuant to order no.11 of the consent order adopted an order of the court in H.C. COMM NO. E386 OF 2019 which stated "that all members of staff of the Child Welfare Society of Kenya during the impasse and up to 07/10/2019 to remain in employment of the society subject to their prevailing terms and conditions of employment” which order has not been set aside and is still in force.* 7. *That they have on several occasion contacted the Respondent's CEO explaining the hardships they were going through due to continuous holding of the salary and who always advised and promised the Claimants to be patience and that their salaries would be paid in arrears and the Respondent was working on their return-to-work formula due to the COVID-19 pandemic.* 8. *That the Claimants were apprehensive that inhumane and unfair labour practices by the Respondent of deliberately continuing withholding their monthly salary and continued compulsory leave were geared to constructively dismiss them from employment.* 9. *That failure by the Respondent to pay their due wages and failure to communicate their employment status, which matter has been brought to the attention of the CEO, board of directors, trustees of the Respondent and the ministry of labour and other social protection and all other necessary government offices amount to inhumane and unfair treatment amounting to unfair labour practices and cannot find justification whatsoever.* 10. *That the conduct of the Respondent especially of barring the Claimants from resuming their work at their various duty stations; and unlawfully withholding their salaries for no lawful cause; barring them from accessing their offices to take their personal effects, non-remittance of statutory deduction especially NHIF medical cover thereby infringing their right to access of good health care and medication especially during the covid 19 pandemic amounted to unfair labour practices and it was in violation of the Claimants constitutional rights among others.* 11. *That the Respondent has since resulted to intimidation, repulsion by the police, indefinite leave and victimization which has left the Claimants in distress as to means of survival among other challenges.* 12. *That owing to the aforesaid matters the Claimants suffered loss and the damage.* 13. *The Respondent actions were unfair, unreasonable and in breach of the Claimants labour rights as enshrined in Article 41 of the Constitution of Kenya, 2010 thus grossly denting the Claimants legitimate expectation to continue in the service of the Respondent.* 14. *Despite the demands from the Claimants the Respondents have failed and or neglected to address their grievances. The Claimants are parents and sole bread winners to their families hence have suffered trying to fend for their families, pay school fees, seek medical attention and also pay bank loans among other bills.* 2. The Claimants in the upshot prayed for the following against the Respondent: - 3. A declaration that the general conduct of the Respondent towards the Claimants' amount to unfair labour practice; 4. A declaration that the Respondent discriminated the Claimants on account of resuming to work, payment of the salary, fair treatment and is in breached their constitutional rights especially in article 27(1) & (2), 28, 41, 43, 47(1), and 236 of the constitution; 5. An Order compelling the Respondent herein to facilitate the Claimants to resume their respective duties and work place with full pay and without loss of any benefits and seniority, responsibilities or physical office space occupied prior to the compulsory leave; 6. An order restraining the Respondent from continuing withholding of the salary for the month of July 2020 and all subsequent monthly pay and all associated benefits and to remits all the statutory deductions, and Sacco's reductions. 7. In the alternative payment of terminal dues and benefits as stipulated in the employment Act 2007 and compensation for loss of job unfairly vide unfair labour practice by the Respondent as calculated below: - 1. Six (6) month salary in lieu of Notices; 2. Gratituity and service pay for years worked; 3. Unpaid leave days worked for and Leave allowances not paid; 4. Public holidays; 5. Withheld Salary arrears from the months of July 2020 to date of judgment; 6. Twelve (12) months compensation for unfair and Unprocedural termination. 7. House allowance 8. Appropriate general and exemplary damages for unfair labour treatments, breach of their constitutional rights, associated mental anguish and suffering due to hardship of earning a livelihood. 9. Interest on the said damages at such rate and for such a period, as the court deems fit. 10. Costs of this suit. 11. The Respondent filed its Statement of Response dated 20th November,2021 and averred inter alia as follows: - 12. *That the Claimants were its employees under written fixed term contracts for the period 1st July ,2019 and 30th June 2020 under the terms and conditions set out in those contracts including the remuneration thereof; that the terms and conditions of employment of the Claimants by the Respondent were contained in the written fixed term contracts dated 1st July 2009.* 13. *That the contracts between the Claimants and the Respondent were entered into by the parties and performed voluntarily, mutually and without any coercion or influence.* 14. *The Respondent denied that the contracts of employment between the Claimants and the Respondent dated 1st July, 2019 were randomly signed at the whims as alleged in paragraph 3 of the Statement of Claim.* 15. *Save that the Respondent paid its employees' salaries for the period January 2020 and June 2020.* 16. *The Claimants served the Respondent for the one (1) year term set out in their respective contracts of service dated 1st July 2019 and it was denied that the Claimants employment was interfered with or that access to the place of work denied as alleged.* 17. *That at the advent of the COVID-19 pandemic and its effects the Government issued measures regulating the access to workplaces. As a result, the Respondent scaled down its operations and all employees were asked to either stay or work from home as directed by the Ministry of Health.* 18. *That the Respondent being an organization that handles vulnerable children, their health and safety is paramount and access to its premises was restricted to authorized individuals and in compliance with the COVID-19 safety guidelines.* 19. *The Respondent informed all its employees of the measures that had been taken to protect them and the vulnerable children under its care from the effects of COVID-19.* 20. *The Respondent averred that each of the Claimants' contracts of employment provided at the recital clause that they had been offered their respective employment positions for a specific period of time.* 21. *That the term of the Claimants contracts of employment terminated/expired and or lapsed by effluxion of time on 30th June, 2020 as envisaged in clause 2 of the individual employment contracts. That there was no obligation to pay the Claimants salaries upon the termination of the employment relationship on 30th June 2020.* 22. *In denying paragraph 8 of the Statement of Claim the Respondent stated that an impasse arose in the management of its affairs following the promulgation of Legal Notice No. 58 of 23rd May, 2014, Child Welfare Society Order, 2014 by the Government that purported to establish it as a state corporation. The gazette notice was in conflict with the Respondent's Trust Deed and its written Constitution as set out in paragraph 2 of this response.* 23. *That the suspension/quashing of Legal Notice No. 58 of 23rd May, 2014. Child Welfare Society Order, 2014 by the Environment and Land Court in Kisumu in Petition No. 16 of 2019 did not resolve the impasse.* 24. *That the Respondent filed Nairobi High Court Civil Case No. E386 of 2019 - Child Welfare Society of Kenya v Equity Bank (Kenya) Limited which was comprised by a consent order dated 13th January, 2020. Clause 16 of the consent order provided that: -"That all member, of staff on the payroll of the Child Welfare Society of Kenya during the impasse and up to and after 7th October 2019 to remain in employment of the Society, subject to their prevailing terms and conditions of employment. "* 25. *Further and in answer to paragraph 8, the Respondent stated that the consent order referred to above did not vary, extinguish or change the Claimants' contracts of employment. The Consent recognized the prevailing terms and conditions of employment which for the Claimants were set out in the one -year fixed term contracts of employment dated 1st July, 2019.* 26. *That the claims for alleged discrimination, inhuman treatment or unfair labour practices at the workplace or payment of salaries and statutory deductions were without basis. That the employment relationship between the Claimants and the Respondents came to an end on 30th June 2020 when all their salaries had been paid.* 27. *That the contracts of employment between the Claimants and the Respondent was self-terminating effective 30th June, 2020. There was no basis for the claim of a legitimate expectation for continued employment as alleged.* 28. *That the Claimants were not entitled to any of the reliefs set out in the Claim and prays that the statement of claim dated 30th July, 2021 be dismissed with costs*. **EVIDENCE** 1. The Claimant’s case was heard on 21st May, 2025 and 2nd October, 2025 where the first witness was Peter Njuguna CW1 herein. He stated that he was one of the Claimants hence was giving evidence on behalf of the rest. He stated that he sought compensation for unfair termination and discrimination. 2. In cross examination he stated that he was first engaged in 2007 and he signed a contract. That the contract was for one year dated 1st July, 2019. That it was negotiated mutually without any coercion. That the contract was to end on 30th June, 2020. 3. He stated that he was not paid all his contract dues although he stated he was paid his salary up to July, 2020. That the Respondent did not communicate their employment status after June, 2020. That the contract had an end date. 4. He stated that in November, 2020 he received some money in his account and he was not able to get clarification on what the payment was for because HR told him he could not also access Respondent’s offices. That he could not recall the amount although it was not long ago. 5. He stated that some of the statutory deductions were never remitted even during the currency of the contracts. That he had the access to the office during the currency of the contract. That he received his salary during this period. That he signed his contract on 27th March, 2020 which contracts were signed for compliance with audit and government procedures. 6. He stated that one would start working before signing the contract. That they understood they were permanent and pensionable because it was a government agency. That the signing was through coercion although he had no place to vent his concerns. That they were told the signing was for formality. That he had no evidence of protest when signing the contract. 7. In re-examination he stated that he had no control when to sign the contract because they were just brought to them. That they were not worried working without signed contracts. That they were receiving their salaries. That they were denied entry in their offices in December, 2019 as the offices were locked because there was a dispute between the CEO and board of Management. 8. He stated that their personal belongings were still there as they had not yet handed over. That the last salary was past July, 2020 and there were delays in salaries during that time. That there was no termination notice issued. That they were denied entrance but some were allowed entrance. 9. He stated that they received payment in the month of November, 2020 but he could not remember what the payment was for. That he considered the payment was for salary from July, 2020 onwards. 10. The second Claimant’s witness one Kenneth Ngigi Ngaruiya CW2 herein was heard on 2nd October, 2025. He relied on the witness statement dated dated 30th July, 2021, further witness statement dated 7th November, 2022 and the documents filed in support of the claim as his evidence in chief. 11. In cross examination he stated that he was engaged in 2012 and was initially given an open contract but later on asked to sign a five-year contract. That after the expiry of the five-year contract he was asked to sign a one-year contract. He further stated that he was paid his salary for June, 2020 and nothing else but his salary from July 2020 was withheld. That he had lost the status of employee in June, 2020 after the expiry of the contract. 12. He stated that he did not sign a new contract thereafter. He sought to be paid 5 months’ salary in lieu of notice because he was terminated. That the contract was to be terminated by one month’s notice or pay in lieu. 13. In re-examination CW2 stated that he signed the contract in July 2019 after it expired. That it was through coercion. That he was engaged in 2012 through an open contract. That retirement age was 60 years. 14. He stated that the management introduced one-year contracts stating they were for auditing purposes. That there was no notice of non-renewal. That it was automatic 6 months’ notice or pay in lieu of notice as the practice in the organization. That he had examples of those who left earlier and were paid the claims they were making. That they received none of them. 15. The Respondent’s case on the other hand was heard on 2nd October, 2025 where one Mercella Kemunto Obaga herein RW1 testified that she was the Respondent’s HRM. She stated that she joined the Respondent in 2020 and that she relied on her witness statement recorded on 28th September, 2022, the statement of response and the documents filed as her evidence in chief. 16. She stated that the dispute was over the contracts issued to the Claimants and the compensation. That they were one-year contracts and the Claimants were paid salaries during the contract period. That there were management challenges during the period in issue and that the offices were locked for all staff during that period. That the offices were locked pursuant to court order. 17. In cross examination she stated that in December 2019 the offices were locked and there were police officers. She could not confirm if the Claimants collected their personal belongings. That the contract was up to 2020. That she was aware of the end of contract but any other communication she was not aware of. 18. She stated that she came in during the crisis and Mr. Ngaruiya was still the HR as they signed the contracts in March 2020 during the Covid-19. That everyone was out of office but still receiving their salaries. That the board of Trustees closed the offices as a result staff were advised to remove all their personal staff and await communication from the office. 19. RW1 stated that a memo to that effect was issued although it was not before the court. That Covid19 came in after the court order. That most staff and the entire country’s workforce were asked to work from home. 20. She stated that the payments done in November 2020 was for service pay for those whose contracts had ended which amount depended on duration of service. That there was no automatic renewal. That there was no rolling and there was compensation in lieu of notice. 21. She stated that the contracts were not done in time due to dispute affecting the Respondent’s operations. That she was not there in December 2019 but there was a dispute between the CEO and board of Management. 22. She stated that the HR the 2nd Claimant herein, was to advice the CEO on signing of contracts and when she joined she raised the issue on why the contracts had not been signed. That from the time she joined she was not aware of any salary delays unless it was before she joined. 23. In re-examination RW1 stated that the board of Trustees closed the office until the crisis was resolved. That Covid-19 also delayed reopening. **CLAIMANTS’ SUBMISSIONS** 1. The Claimants through their Advocates Mugo & Associates Advocates filed written submissions dated 14th October, 2025 and on the issue of whether there was a legitimate expectation that the Respondent would renew the Claimants’ contract counsel relied on the Black’s Law Dictionary Tenth Edition on definition of legitimate expectation and the case of **Teresa Carlo Omondi vs Transparency International – Kenya [2017] eKLR** on when there exists a legitimate expectation for renewal of a fixed contract. 2. Counsel submitted that clause (3) of the contracts of employment addressed Notification and Application. It stated that parties agreed that:\_ “…Should you be interested in renewing your contract, the availability of funds will determine such a contract, your performance, your conduct, your productivity to this organization, and the prevailing human resource needs...” 1. Counsel submitted that by virtue and in consideration of the evidence adduced by the Claimant’s witness 2 who were employed in 2007 that their contract with the Respondent would only roll over and there was no criteria used by the Respondent to renew its employees’ contracts, it was clear and evident that the witnesses and the Claimants herein had a legitimate expectation for their contracts to roll over. 2. Counsel submitted that the Respondent never issued any form of communication or notification to the Claimants, which notice would have helped them reorganize their daily expenditure as well as start sourcing for new employment thus emphasizing on the fact that the Claimants herein were neither prepared nor expecting to be barred from work by the Respondent herein. 3. Counsel submitted that while the Claimants had fixed financial contracts of employment the Respondent had a corresponding duty to renew the employment contracts upon a demonstration of interest in the renewal of the contract and an assessment of the availability of funds, performance, conduct and productivity, primarily based on prevailing human resource needs. 4. Counsel relied on among others the case of **Oshwal Academy Nairobi & Another v. Indu Vishwanath [2015] e-KLR** on the instances where unique circumstances of the employment relationship, may create legitimate expectation that fixed term contract would be renewed. Counsel also relied on the court of appeal in **Keen Kleener Limited vs Kenya Plantation and Agricultural Workers Union (20210 eKLR 352** on when there is legitimate expectation where the employer by representation or past practice has aroused an expectation in the employee that an expiring contract would be renewed. 5. It was submitted that some employees had been advanced internal and organizational loans by the Respondent which repayment schedule were not payable within 1-year contract as some extended up to 5 years. That they therefore legitimately expected their contracts to be renewed to continue paying their loans. These loans were endorsed and repayments effected by the organization. As a result of the Respondent’s actions, some employees had their shares deducted to pay their colleagues loans that they had guaranteed them but defaulted. 6. Counsel submitted that the Respondent's practice was not merely one of renewal, but of automatic and systemic renewal, encompassing all employees without exception. This created a *de facto* permanent employment relationship in the form of a series of fixed-term contracts. The organization itself operated on the assumption of continuity, as evidenced by its endorsement of long-term financial commitments for employees, such as Sacco loans with repayment schedules extending beyond a single contract year. 7. It was submitted that if at all the Respondent claimed that it never renewed the contracts of the Claimants herein then it would have amounted to unfair termination as no communication was issued nor due process followed for termination. That the clause in the contract requiring an assessment of "availability of funds, performance, conduct and productivity" was rendered a mere formality by the Respondent's own uniform practice. The Respondent could not, in hindsight, invoke the clause to justify non-renewal when it systematically ignored these very factors for years in its renewal practice. The failure to conduct any such assessment or communicate any performance issues to the Claimants prior to the non-renewal further underscored the unfairness of their actions. 8. Counsel submitted that where an employee on fixed financial contract had a legitimate expectation of renewal, the termination at the expiry of the contract was not a simple expiration but a dismissal, and the employer must prove the reasons for it. The Respondent in this case failed to discharge this burden under Section 43 of the Employment Act.That the Claimants’ contractual relationship with the Respondent existed from 2012, with contracts consistently renewed despite terminating by effluxion of time. These consistent renewals created a legitimate expectation that their employment contracts would be renewed by the Respondent, which the Court must protect under Section 45(5) (d) of the Employment Act. 9. On the issue of whether the Claimants were subjected to discrimination by the Respondent when they reopened the office with few selected employees and leaving the Claimants outside without any form of communication counsel submitted that natural justice and common law labour practices dictated that an individual employee is treated fairly, equally and equitably in this respect, counsel relied on section 5 of the Employment Act which prohibited discrimination in employment. 10. It was submitted that the Chairman Board of Trustees wrote a memo to all employees advising them to wait at home due to Covid-19 restrictions but did not single out any employee not to continue working or earning. However, the Respondent reopened their offices in January 2020 with few selected employees discriminating the Claimants and leaving the Claimants outside without any form of communication regarding their employment status. 11. It was submitted that the Claimants failed to understand why there was no communication of the reasons why some employees contract would be stopped or not renewed while they did not have any disciplinary cases or performance issues while for others the contract were deemed to have automatically rolled over. That they were discriminated by the Respondent by virtue that some employees were paid their salaries while they were left out and not issued the salaries due to them. 12. Counsel relied on the case of **Okhonjo & Another vs Kenya Ports Authority** to submit that employer cannot plead discretion in order to perpetuate discrimination in employment, and neither can an employer hide behind its human resource manual or operational manual; or even Scheme of Service, with a view to defeating the statute outlawing discrimination in employment**.** 13. It was submitted that this discriminatory conduct violated not only Section 5 of the Employment Act but also the Claimants’ fundamental rights to equality and freedom from discrimination guaranteed under Article 27 of the Constitution of Kenya as the Respondent provided no objective or justifiable criteria for this differentiation, rendering its actions arbitrary, discriminatory and unlawful. 14. On the issue of whether failure to renew the Claimants contracts amounted to unfair termination and unfair labour practices counsel relied on section 43 of Employment Act on proof of reasons for termination which amounted to unfair termination under section 45 of the Employment Act. Counsel further relied on the above-cited court of appeal case of **Keen Kleener Limited vs Kenya Plantation and Agricultural Workers Union** on proof of reasons for termination after finding the employees had a legitimate expectation of renewal of their contracts.Thatit was a custom that in case there was an employee whose contract was not to be renewed he/she got a letter informing him/her that his/her contract would not be renewed. However, the Claimants never got any such letter communicating nonrenewal. 15. Counsel submitted that the Respondent’s failure to renew the employment contracts when such legitimate expectation for renewal had been established amounted to unfair termination and the Respondent must prove the reasons for terminating the employment relationship under Section 43 as read with Section 45 of the Employment Act. Counsel further submitted that the Respondent herein withheld the Claimants’ salaries as they were due and the same amounted to unfair labour practice by the Respondent. It would be unreasonable for the Respondent to rely on the consent of 13th January, 2020 as a justification while the same was clear that the orders of 24th December 2019 had lapsed in view of the same consent and it was not justifiable for the Respondent to withhold the Claimants salaries illegally. 16. Counsel submitted that the actions of the Respondent of sending the Claimants on compulsory leave, barring them from the premises, and then reopening without them effectively constituted a constructive dismissal as the Respondent created an intolerable work environment and made it impossible for the Claimants to perform their duties or even to know their employment status. Further the failure by the Respondent to provide any form of communication, let alone a hearing or notice, as required by Section 41 of the Employment Act, was a gross procedural violation. 17. On the issue of whether the Claimants were entitled to the prayers sought counsel submitted that the Claimants prayed fora declaration that the general conduct of the Respondent towards the Claimants amounted to unfair labour practice; they were discriminated against and payment of terminal dues and benefits among others. Counsel submitted that from the Child Welfare Society of Kenya Human Resource Manual Section 4.1 Gratuity/service Pay**;** it was clearly stated that employees were entitled to gratuity or service pay for every completed year of service payable at the end of the contract period or end of the financial year. 18. Counsel Further, submitted that at Section 4.7 Severance Pay; of the same manual it stated that where an employee was declared redundant or his or her contract was terminated for reasons other than fault on the part of the employee, such employee was entitled to severance pay at the rate of not less than 15 days’ pay for each completed year of service as severance pay. That a further look into the same manual at Section 10.1 Termination of Employment; it stated that the guideline for addressing involuntary terminations initiated by the organization like redundancies among others. 19. Counsel submitted that a released employee is eligible to payment of unused annual leave earned and one month’s notice in writing or pay in lieu of notice. That those contracts that were not renewed for subsequent years were paid one month pay in lieu of notice irrespective of whether it was a term contract or not. 20. Counsel submitted that the Respondent argued that the Claimants were not entitled to any service pay/gratuity pursuant to Section 35(6) of the Employment Act, 2007. However, the Claimants were entitled to service pay pursuant to Section 35(6) of the Employment Act, and the CWSK Human Resources policy manual. Thatall those employees who left after 2016/2017 contract which had removed gratuity payment were paid severance pay calculated at 15 days per full year worked irrespective of whether it was a term contract or permanent. Further, all the employees who left after the 2016/2017 contract which removed gratuity payments were also paid service pay calculated at 15% of total salary earned for the years worked irrespective of whether it was a term contract or a permanent contract. 21. Counsel submitted that the Respondent's own past conduct was the best guide to the Claimants' entitlements. The fact that the Respondent paid severance pay and service pay to other employees in identical circumstances, even after the 2016/2017 contract period, established a binding customary practice. The Respondent could not resile from this established practice. The Claimants were therefore entitled to these payments, and the Court ought to order the same based on the Respondent's consistent previous behavior. 22. Counsel submitted that the Respondent's conduct revealed a strategy to exploit the form of the financial term contracts to deny employees the substance of their rights. The HR Manual, the established past practice, and the law all converged to confirm the Claimants' entitlements and benefits. To find otherwise would be to sanction an abuse of the fixed-term contract system and allow employers to evade their legal and contractual obligations. **RESPONDENT’S SUBMISSIONS** 1. On the other hand, the Respondent’s Advocates Lenakio & Associates Advocates filed submissions dated 9th November, 2025 and on the issue of whether the contracts of employment between the Claimants and the Respondent terminated by effluxion of time counsel began by highlighting the words of DKN Marete, J in the case of **Bitutu v Riley Services (Cause 173 of 2018) KEELRC 2757 2023** in which the Judge affirmed that a fixed term contract is a contract *sui generis* and it comes with its terms and expectations. That the same did not offer any legitimate expectation. 2. Counsel submitted that the Claimants herein and the Respondent entered into a contract vide letters of employment for One (1) year period commencing 01/07/2019 and ending 30/6/2020. Clause 2 of the Letter of Employment provided for the timelines above. It was submitted that the Contract between the Claimants and the Respondent had a start date and a specific expiry date. In reference to Clause 2 of the Claimants’ Letters of Employment, it was not contested that the Claimants were paid their dues and the Statement of Claim turned on the non-payment of the Claimants remuneration for the month of July, 2020. It was submitted that the Respondent had no obligation to pay the Claimants for the month of July, 2020 as the contract of employment had lapsed by effluxion of time. That upon expiration of the contract, the Respondent did not offer the Claimants herein another contract, either expressly or impliedly, to form the basis upon which the Statement of Claim dated 30th July, 2021 would be premised. Counsel relied on among others the case of **Anne Theuri v Kadet Limited [2013]** on this assertion and the Court of Appeal case of **Transparency International- Kenya vs Teresa Carlo Omondi [2023] eKLR** where it was stated that the concept of automatic renewal of fixed term contracts was an oxymoron that had no basis in our employment laws. 3. It was further submitted that indeed the Contract of employment between the Claimants and the Respondent contained a provision for termination of the agreement under clause 2. That no such notice was issued by either party during the life of the contract and that the contract terminated by effluxion of time. Counsel relied on the case of **Margaret A Ochien v National Water Conservation & Pipeline Corporation [2014] eKLR** where the court held that there was no need for notice of renewal of a fixed term contract since the contract has an end date. 4. On the issue of whether the claim for legitimate expectation of renewal of the contract robs the Respondent of its discretion among other considerations that informs contract renewal, counsel submitted that fixed term contracts carry no expectancy of renewal. That clause 3 of the Claimants Contract on renewal of the said contracts provided the conditions to be met before the contract was renewed. In this respect, Counsel relied on the case of **Communications Commission of Kenya & 5 others v Royal Media Services Limited & 5 others (Petition 14 ,14A, 14B & 14C of 2014 (Consolidated)) [2014] KESC 53 (K LR)** where the Supreme Court of Kenya summarized the principles governing the doctrine of legitimate expectation and further submitted that it was not in contention that the Claimants herein did not work past the end of the contract. That the assertion by the Claimants that their contracts would automatically roll over was without basis as the Respondent did not hold out to the Claimants that their contracts would be extended after the expiry date. Further, the Claimants, having been engaged on fixed term contracts and there being no inducement by the Respondent that their contracts would be renewed could not legally sustain a claim on the basis of legitimate expectation. 5. Counsel invited the Court to find that the non-renewal of the Claimants contract was not actionable in the circumstances. Reliance was placed on the Court of Appeal case of **National Water Conservation & Pipeline Corporation v Mwanza (Civil Appeal 178 of 2014) [2017]** where the court found that a claim on legitimate expectation should be founded on clear and express promise. 6. Counsel held that the nature of the contract between the Claimants and the Respondent left no room for second-guessing whether the contract would terminate or would roll over as insinuated by the Claimants. The Claimants alleged, amidst wrongly, that it was the tradition of the Respondent to extend contracts of its employees every year despite the contract documents indicating that such contracts would terminate at the end of the year. That Clause 2 of the Claimants letter of employment was emphatic that the contract superseded all previous contracts between the parties. The Respondent could not then be condemned for having executed the contract as negotiated by the parties. 7. On the issue of whether the failure to renew the Claimants contracts amounted to unfair termination and unfair labour practice counsel submitted that the Respondent, having established that the contract terminated by effluxion of time, the Claimants assertion that such a termination was unlawful and unfair was a massive stretch and thus unfounded. That it was an established legal principle that parties to a contract were bound by their terms of contract. It followed therefore that, any ensuing dispute between the parties would be addressed within the parameters of the contract between the parties. Counsel further submitted that having established that the contract of employment between the parties herein was to run for a period of one (1) year and neither party terminated the agreement within this period, whatever termination occurred was within the law. That the court should be guided by clause 2 of the contract as regards termination of the contract. 8. The Respondent submitted that the Claim as framed did not disclose any violation to warrant unfair termination or unfair labour practice on the part of the Respondent. The decision of the Court of Appeal in the case of **Transparency International- Kenya vs Teresa Carlo Omondi [2023] eKLR** illustrated that a party could not be faulted for exercising its rights under a contract. Further, reliance was placed on the case of **Johnstone Luvisia v All pack Industries Limited [2019]** where the court declined to issue a declaration of unfair termination where a fixed term contract had lapsed. That a fixed term contract does not amount to unfair termination placing reliance on the case of **Tarmal Wire Products Limited v Kurwa(Appeal No. E061 of 2023)(2024) KLR.** 9. On the issue of whether the Claimants were discriminated by the Respondent counsel submitted that one of the central claims made by the Claimants was that the Respondent discriminated against them by allowing other employees of the Respondent to resume work when the Respondent’s offices were reopened on January, 2020. That by this assertion, the Claimants proceed, wrongly, on the assumption that all the employees of the Respondent were engaged on a collegial basis; they were employed in the same year and they must leave employment as a team upon retirement. Counsel submitted that the Claimants left employment after their contracts of employment had ended and that the contract of employment between the Claimant and the Respondent had a start and end date and that the issue of discrimination did not arise. Reliance was placed on among others the case of **Kenya Union of Commercial Food & Alli ed Workers v Midal Group (K) Ltd [2022]** on this assertion**.** Counsel urged the Court to dismiss the claim for discrimination as it has no basis in law. 10. On the issue what orders should this Honourable Court issue counsel submitted that it was not contested that at the advent of the Covid-19 pandemic, the Chairman, Board of Trustees of the Respondent, issued a memo to all employees requiring them to work from home during the pandemic. During this period, the Respondent paid the Claimants salaries and attendant dues without fail as per the contract. 11. Counsel submitted that the Claimants made reference to the Respondent’s Human Resource Manual particularly at Section 4.1 to support their claim for gratuity or service pay. That the Claimants were not entitled to service pay or gratuity given that on 2nd December, 2020, the Respondent paid all their outstanding service pay. The payment covered the contract period and the previous contracting periods as captured at page 54-99 of the Respondent’s List and Bundle of Documents. Further and turning to the issue of housing allowance, it was the Respondent’s submission that the contract of employment contained a provision to the effect that the Claimant were paid a consolidated wage. 12. Counsel relied on Section 31 (2) of the Employment Act which exempts employees whose salary is consolidated from being paid housing allowance. Counsel submitted that unfortunately, the Respondent suffered budgetary cuts during the financial year 2020/2021 whereby its approved budget of Kshs. 872,340,000.00 was revised downwards to Kshs. 492,340,000.00 by the Government thus affecting its programmes and operations. In the circumstances, the Respondent was compelled to manage the already existing contracts and to guard against administrative decisions that could bind the society and pose legal challenges occasioned by unavailability of funds to honour such obligations. That the reliefs sought by the Claimants were clearly outside the contract period, had no legal foundation and therefore ripe for dismissal by this Honourable Court. **DETERMINATION** The court has reviewed and considered the pleadings, testimonies and submissions by both counsel in support and opposition to the case. The court has also considered authorities relied on by counsels and come up with three main issues for determination which are: - * + 1. Whether the Claimants had legitimate expectations that their contracts would be renewed and whether the failure to renew amounted to unfair termination. 2. Whether the Claimants were discriminated against by the Respondent. 3. Whether the Claimant are entitled to the reliefs sought. **Whether the Claimants had legitimate expectations that their contracts would be renewed and whether the failure to renew amounted to unfair termination.** 1. It was not in dispute that the Claimants were employed by the Respondent on one-year contracts which would be renewed every year until December, 2019 when they were sent on compulsory leave until their one year contracts expired in June, 2020. The Respondent never engaged them after June 2020 and it paid their salaries up to June 2020. 2. The Claimants alleged that although they signed the one-year contract they were told the same was for a mere formality for auditing purposes, their contracts used to be renewed automatically and they presumed they were permanent and pensionable employees of the Respondent. That their contracts used to roll over the years. That they would continue working even without signing the contracts and receive their salaries. 3. Whereas the Claimants alleged that they were coerced into signing the contracts during hearing they confirmed that they never indicated that they signed under coercion. It came out clearly that they signed the same for formality. They stated that they had a legitimate expectation that their contracts would be renewed since they would be renewed anyway. 4. From the records before the court some Claimants started working for the Respondent as early as, 2007, 2009, 2012 all the way recent ones being in 2018 where they were engaged on one year contracts. The court has perused the contracts which merely contained similar terms all through and the same were renewable on certain conditions under clause 2 and 3 of the said contracts with the conditions being availability of funds coupled with performance, conduct and productivity to the organization and prevailing human resource needs. 5. The court notes that fixed term contracts were allowed in the employment law as was held in the case of **East Africa Sea Food Limited v Mwazito (Appeal E013 of 2020) [2023] KEELRC 1257 (KLR) (20 April 2023) (Judgment)** wherethe court had this to say:- *Whether to issue a fixed term contract or not is regulated under the provisions of Section 10(3) (c) of the Act. An employer is allowed the prerogative to employ an employee under a fixed term contract with a start and end date. the self-executing contract is lawful and valid in employment and labour relations. The Court of Appeal in Civil Appeal No. 18 of 2018*[*Transparency International Kenya v Teresa Carlo Omondi*](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/judgment/keca/2023/174)*[2023] eKLR held that a fixed-term employment contract does not create a legitimate expectation of renewal. Further, the non-renewal of fixed-term employment does not amount to unfair termination of employment warranting compensation. Section 10(3) (c) of the Act then lifts the obligation on an employer to explain reasons for termination of employment in fixed-term contract as the same lapse by effluxion of time without creating a right of legitimate expectation of renewal.* 1. The court concedes that a fixed term contracts are not renewable automatically as was held in the case of **Rajab Barasa & 4 Others v. Kenya Meat Commission 2016] eKLR***.* The court also appreciates that fixed term contracts carry no legitimate expectation of renewal. In the case of **Osoti v Trees for the Future INC (Cause E002 of 2023) [2024] KEELRC 962 (KLR) (2 May 2024) (Judgment)** the court observed as follows: - *The general rule is that a fixed term contract carries no expectation for renewal. It is however settled that a fixed term contracts with a renewal clause may create expectancy of renewal on the part of the employee based on previous contract renewals.* 1. In addition, in the case of [**Margaret A Ochieng v National Water Conservation& Pipeline Corporation [2014] eKLR**](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/judgment/keelrc/2014/328) the court while dealing with the question of whether there is automatic need for notice of renewal of a fixed-term contract held that; *“…Automatic renewal [of a fixed-term contract] would undermine the very purpose of the fixed-term contract, and then revert to indeterminate contracts of employmen… Courts have upheld the principle that fixed-term contracts carry no expectancy of renewal, in a catena of judicial authorities…The Court is persuaded that the Claim has no merit. The fixed term contract had its own in-built termination notice, in that the date of termination was advised to the Claimant on execution of the three-year contract in December 2008. She knew termination would be upon the lapse of the three years in 2011...”* 1. Regarding the considerations to be made when considering whether a legitimate expectation for renewal of a fixed term contract was created, the sentiments of Rika J. in **Teresa Carlo Omondi v Transparency International- Kenya [2017] eKLR** guide this court as follows- “*The burden of proof, in legitimate expectation claims, is always on the Employee. It must be shown that the Employer, through regular practice, or through an express promise, leads the Employee to legitimately expect there would be renewal. The expectation becomes legally protected, and ought not to be ignored by the Employer, when managerial prerogative on the subject is exercised. Legitimate expectation is not the same thing as anticipation, desire or hope. It is a principle based on a right, grounded on the larger principles of reasonableness and fair dealing between Employers and Employees. The Employee must demonstrate some rational and objective reason, for her expectation. The representation underlying the expectation must be clear and unambiguous. The expectation must be induced by the decision maker. The decision maker must have the authority to renew. Repeated renewals, extended service beyond the period provided for in the fixed term contract, and promise of renewal, are some of the elements that would amount to objective reasons underlying expectation of renewal. The presence of these elements however, is not to be taken as conclusive proof of legitimate expectation.”* 1. The court notes that whereas the general rule was that fixed term contracts carried no legitimate expectations of renewal the above case of Teresa Carlo among others brought out the exceptions when the said rule may not apply. In this case the one-year contracts used to be renewed by the Respondent and its witness confirmed that she followed up for the contracts to be signed. That the Claimants assumed permanency since the contracts would be renewed and they would continue working get paid even before the said contracts were renewed. 2. The court therefore takes the position that the conduct of the Respondent of renewing the contracts every year created a legitimate expectation to the Claimants that their contracts would be renewed. In addition, the fact that the Claimants were offered loan facilities running over a year showed that the Respondent had assumed them as permanent employees because of the many years they served the Respondent. 3. In the case of **Otiende v Ligawa & another (Petition E052 of 2022) [2023] KEELRC 3363 (KLR) (13 December 2023) (Judgment)** the court observed as follows: - “…*In the Court’s view, the conduct of the Respondents not only created a legitimate expectation on the Petitioner but also led to an inference that he was still an employee until released formally in terms of clause 1(iv) of the contract*…” 1. In this case the Claimants apart from being paid their salaries they were sent on compulsory leave in December, 2019 and if at all the Respondent was facing any financial issues as alleged the best way they would do is to declare the Claimants redundant. The Respondent only took advantage of the fixed term contracts to terminate the Claimants when the one-year contract ended in June, 2020. 2. The court notes that the act of the Respondent of sending the Claimants’ on compulsory leave and reopening with a few despite the consent of January,2020 that employees of the Respondent were to continue with their employment on same terms, barring the Claimant’s from accessing the offices even before their contract expired was unfair labour practice. The Respondent waited until their contracts expired in June,2020 then hid behind the doctrine of effluxion of time of fixed term contracts. The Claimants were constructively dismissed by the Respondent without their fault at that point. The Claimants therefore had a legitimate expectation that their contracts would be renewed and the failure to renew amounted to unfair termination. ***Whether the Claimants were discriminated against by the Respondent*** 1. On the issue of discrimination, the Claimants alleged that after they were sent on compulsory leave in December 2019 the Respondent reopened in January, 2020 with a few employees and singled out those whose contracts were expiring in June, 2020. The Respondent apart from stating that it was going through financial constraints and the effects of covid 19 it did not illustrate why the Claimants were left out when it reopened. 2. This court notes the letters wrote by the Claimants on their victimization by the CEO and notes that the Respondent waited until their contracts expired and stopped their payment. This was a clear case of discrimination on those Claimants. In the case of **Gichuru v Package Insurance Brokers Ltd (Petition 36 of 2019) [2021] KESC 12 (KLR) (22 October 2021)** Discrimination was explained as follows: *“Discrimination was failure to treat all persons equally when no reasonable distinction could be found between those favoured and those not favoured. Not all cases of distinction amounted to discrimination. Discrimination could be said to have occurred where a person was treated differently from other persons who were in similar positions on the basis of one of the prohibited grounds like race, sex disability or due to unfair practice and without any objective and reasonable justification.”* 1. Equally, in **Francis Njeru Kariuki v Crown Paints Kenya Limited [2022] eKLR** it was held that: *“According to the Court of Appeal in Barclays Bank of Kenya Ltd & another v Gladys Muthoni & 20 others [2018] eKLR –“…Discrimination means affording different treatment to different persons attributable wholly or mainly to their descriptions … whereby persons of one such description are subjected to … restrictions to which persons of another description are not made subject or are accorded privileges or advantages which are not accorded to persons of another such description…”* 1. From the foregoing caselaw and in the instant case, the court finds that the Claimants were discriminated against by the Respondent. ***Whether the Claimants are entitled to the reliefs sought****.* 1. Having established that the Claimants were unfairly terminated the court proceeds to find that they were entitled to the damages for unfair termination under section 49 of the Employment Act. The court is however guided by considerations under section 49(4) of the Act in assessing the quantum of compensation payable to the claimants. It however noted that the Claimant served for periods but were terminated unfairly. The Claimant who joined in 2007 had served for 13 years, those who joined in 2009 had served for 11 years, those who joined in 2011 had served for 9 years, those of 2012 for 8 years, those of 2014 had served for 6 years, 2015 had served for 5 years, 2017 had served for 3 years and 2018 and served for 2 years. The court will therefore apportion the compensation payable as per the years served respectively apart from the 5th claimant who had served from 2007 who will get maximum compensation of 12 months. 2. The Claimants were also entitled to one month notice pay under section 35(5) of the Employment Act since they were terminated without notice. On the claim for severance pay this is not payable as the claimant’s were not declared redundant but were unfairly terminated as the court has already found. 3. On the claim for service pay since there were payments made in November, 2020 which were service pay the Claimants witnesses were reluctant to admit this payment which the Respondent illustrated was service pay the same prayer fails. 4. On the prayer for house allowance the contracts provided for consolidated pay hence the same prayer fails. The prayer for unpaid leave and public holidays was not properly particularized apart from being claimed and the same fails for failure to prove. 5. On the claim for exemplary damages for breach constitutional rights this court finds that the award for compensation for unfair termination would be sufficient as no case has been made to the threshold required to prove violation of constitutional rights. A termination of employment need not be escalated to a finding of breach of constitutional rights since the Act adequately provides for the remedies available in such situations. The court will only venture to award for breach of constitutional rights if such is specifically pleaded and adequately demonstrated which did not happen in this case. 6. **In conclusion the Claimants’ claim is hereby found merited and is hereby allowed with costs as tabulated below: \_** * 1. **1st Claimant Kenneth Ngigi Ngaruiya** 7. **One month Notice pay….Kshs 145,200/=** 8. **8 months salary as compensation for unfair termination….Kshs 1,161,600/=** **Total Kshs 1,306,800/=** * + 1. **2nd Claimant Bernard Ochieng Okumu** **i. One month Notice pay….Kshs 89,000/=** **ii. 6 months salary as compensation for unfair termination….Kshs 534,000/=** **Total Kshs 623,000/=** * + 1. **3rd Claimant James Njuguna Kimani** **i. One month Notice pay….Kshs 58,462/=** **ii. 8 months salary as compensation for unfair termination….Kshs 467,696/=** **Total Kshs 526,158/=** * + 1. **4th Claimant Mary Wambui Kamau** **i. One month Notice pay….Kshs 64,785/=** **ii. 6 months salary as compensation for unfair termination….Kshs 388,710/=** **Total Kshs 453,495/=** * + 1. **5th** **Claimant Peter Mwaniki Njuguna** **i. One month Notice pay….Kshs 140,000/=** **ii. 12 months salary as compensation for unfair termination….Kshs 1,680,000/=** **Total Kshs 1,820,000/=** **6th Claimant Ann Njeri Kangethe** **i. One month Notice pay….Kshs 88,000/=** **ii. 5 months salary as compensation for unfair termination….Kshs 440,000/=** **Total Kshs 528,000/=** **7th Claimant Agnes Nthenya Ndunda** **i. One month Notice pay….Kshs 88,000/=** **ii. 6 months salary as compensation for unfair termination….Kshs 528,000/=** **Total Kshs 616,000/=** **8th Claimant Bernard Lemiso Tiampati** **i. One month Notice pay….Kshs 48,315/=** **ii.11 months salary as compensation for unfair termination….Kshs 531,465/=** **Total Kshs 579,780/=** **9th Claimant Brooke Carrinton Abuya Olonde** **i. One month Notice pay….Kshs 125,400/=** **ii. 8 months salary as compensation for unfair termination….Kshs 1,003,200/=** **Total Kshs 1,128,600/=** **10th Claimant Brian Nyariki Opande** **i. One month Notice pay….Kshs 40,000/=** **ii. 3 months salary as compensation for unfair termination….Kshs 120,000/=** **Total Kshs 160,000/=** **11th Claimant Janet Anyango Oluoch** **i. One month Notice pay….Kshs 55,993/=** **ii. 8 months salary as compensation for unfair termination….Kshs 447,944/=** **Total Kshs 503,934/=** **12th Claimant Joab Ayoo** **i.** **One month Notice pay….Kshs 60,000/=** **ii. 3 months salary as compensation for unfair termination….Kshs 180,000/=** **Total Kshs 240,000/=** **13th Claimant Kelvin Kimulu Eyase** **i. One month Notice pay….Kshs 78,392/=** **ii. 8 months salary as compensation for unfair termination….Kshs 627,136/=** **Total Kshs 705,528/=** **14th Claimant Brian Nyariki Opande** **i. One month Notice pay….Kshs 20,000/=** **ii. 2 months salary as compensation for unfair termination….Kshs 40,000/=** **Total Kshs 60,000/=** **15th Claimant Maureen Maresi Mbwanga** **i. One month Notice pay….Kshs 68,487/=** **ii. 6 months salary as compensation for unfair termination….Kshs 410,922/=** **Total Kshs 479,409/=** **16th Claimant Reuben Kazei salim** **i. One month Notice pay….Kshs 33,750/=** **ii. 5 months salary as compensation for unfair termination….Kshs 168,750/=** **Total Kshs 202,500/=** **17th Claimant Sally Mkawura Kililo** **i. One month Notice pay….Kshs 40,000/=** **ii. 6 months salary as compensation for unfair termination….Kshs 240,000/=** **Total Kshs 280,000/=** **18th Claimant Albert Anywenyi Aloys** **i. One month Notice pay….Kshs 22,500/=** **ii. 5 months salary as compensation for unfair termination….Kshs 112,500/=** **Total Kshs 135,000/=** **19th Claimant Grace Njoki Ng’ang’a** **i. One month Notice pay….Kshs 24,000/=** **ii. 6 months salary as compensation for unfair termination….Kshs 144,000/=** **Total Kshs 168,000/=** **20th Claimant Susan Ndege Buzuei** **i. One month Notice pay….Kshs 24,000/=** **ii. 5 months salary as compensation for unfair termination….Kshs 120,000/=** **Total Kshs 144,000/=** **21st Claimant Mary Wairimu Njuguna** **i. One month Notice pay….Kshs 50,000/=** **ii. 2 months salary as compensation for unfair termination….Kshs 100,000/=** **Total Kshs 150,000/=** **22nd Claimant Peter Muhia Wambungu** **i. One month Notice pay….Kshs 140,000/=** **ii. 2 months salary as compensation for unfair termination….Kshs 280,000/=** **Total Kshs 420,000/=** **23rd Claimant Rose Kubano Chandiku** **i. One month Notice pay….Kshs 25,955/=** **ii. 9 months salary as compensation for unfair termination….Kshs 233,955/=** **Total Kshs 259,910/=** 1. **These awards shall be subject to taxes and applicable statutory deductions but shall attract interest from the date of judgment until payment in full.** 2. **The claimants shall further have costs of the suit** 3. **The Claimants to be issued with certificate of service.** 4. **It is so ordered.** **Dated at Nairobi this 28th day of July, 2026** **Delivered virtually this 28th day of July, 2026** **Abuodha Nelson Jorum** **Presiding Judge-Appeals Division**