Violah v Inkomoko Ltd (Cause E012 of 2025) [2026] KEELRC 2118 (KLR) (21 May 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT OF KENYA AT KITALE** **CAUSE NO. E012 OF 2025** *(Before Hon. Lady Justice Maureen Onyango)* **CHEBET VIOLAH …………………..……………………. CLAIMANT** **VERSUS** **INKOMOKO LTD ………………….….…………….… RESPONDENT** **JUDGMENT** 1. The Claimant is a female adult residing and working for gain in Nairobi. The Respondent is a private limited liability company incorporated under the laws of Kenya with operations in Nairobi and other parts of Kenya. 2. By a written contract dated 23rd July, 2024, the Claimant was engaged by the Respondent as Client Relationship Officer stationed at its office in Kakuma. The date of commencement of the contract was 19th August, 2024. The contract duration was a fixed term of one year, ending 18th August, 2025. 3. The contract provided that the Claimant would initially be on probation for 3 months. The Claimant’s probation was extended by three months following which she was confirmed. 4. The contract provided that it was renewable subject to availability of funding and performance. The Claimant’s starting salary was Kshs. 107,496 and was increased to Kshs. 125,43 to cater for rise in the cost of living. 5. On 14th August, 2025 the Claimant was issued with a letter of non-renewal of contract. The Claimant avers that the non-renewal letter did not provide for reasons for non-renewal. It is further the Claimant’s case that the non-renewal letter did not make any reference to funding constraints or poor performance. 6. It is the Claimant’s case that barely two weeks after the end of her contract the Respondent advertised the same position, which according to the Claimant implied that the role was still available and there was no funding constraint. 7. It is further the Claimant’s case that her contract did not provide for housing allowance and that she was not provided with housing by the Respondent contrary to the provisions of section 31 of the Employment Act. 8. It is the Claimant’s averment that the failure to renew her contract notwithstanding her satisfactory performance constituted a violation of her statutory and constitutional protections and is cognizable unfair labour practice. That the same further violated sections 43 and 45 of the Employment Act as the Respondent neither communicated a valid and fair reason nor did it follow due process, rendering the non-renewal unfair. 9. The Claimant further avers that she had legitimate expectation of the renewal of her contract subject only to funding and performance. That the Respondent thus violated her rights under Article 41 of the Constitution. 10. The Claimant averred that between September, 2024 and May, 2025 she received and documented several client complaints and reports of irregular handling of client loans, extortion and verbal mistreatment at the Respondent’s Kakuma Office. That these reports were made using the Respondent’s standard client-interaction template and regularly shared with the Claimant’s immediate supervisor, the Location Manager and other senior officers. 11. The Claimant averred that during August, 2025 performance review session, her Line Manager verbally cautioned her against continuing to record client complaints touching on fraud and client mistreatment, citing potential reputational risk and donor scrutiny. 12. The Claimant aver that after these disclosures she experienced a marked change in her working environment. That the Location Manager began excluding her from weekly planning meetings and withholding task assignments, which she raised through emails but was not given written explanation or corrective measures taken by the Location Manager. 13. The Claimant avers that this marginalization, exclusion and hostile work environment was deliberate and intended to isolate her to lay ground for a negative renewal recommendation. She avers that this treatment amounts to victimization and retaliation contrary to section 46 of the Employment Act. 14. As a consequence of the averments above, the Claimant avers that she suffered loss of continued employment and salary, statutory housing allowance and emotional distress, reputational injury and prejudice to her professional standing and employability flowing from abrupt non-renewal despite satisfactory service. 15. The Claimant thus seeks the following remedies against the Respondent in her Statement of Claim dated 25th September, 2025: 1. A declaration that the Respondent’s termination of the Claimant’s employment was unfair and unlawful. 2. Payment of arrears of housing allowance for the entire period of employment, calculated at 15% of monthly salary – 15% of 125,430.48 = Ksh. 18,814.57 per month 18,814.57 x 12 = Ksh. 225,774.84 3. Compensation for unfair and unlawful termination assessed at 12 months’ gross salary (12x Kes 125,430.48 4. Compensation for unfair and unlawful termination assessed at 12 months’ gross salary (12 x K125,430.48) = 1,505,165.76 5. Costs of the suit. 6. Interest on all monetary sums at court rates from the date of filing until payment in full. 7. Any other relief that this Honourable Court may deem just and expedient to grant in the circumstance. **Respondent’s Case** 1. The Respondent filed a Statement of Response dated 18th November, 2025 in which it denies the averments of the Claimant and states that: 2. The Claimant’s employment contract dated 23rd July 2024 did not contain any provision or undertaking promising renewal, and any insinuation or allegation to the contrary made by the Claimant is denied. 3. The Claimant's employment contract expired on 18th August 2025. At the time of the expiry of the said employment contract, the Claimant's gross consolidated salary had been increased after a cost-of-living adjustment that was applied to all staff in the country, which included a consideration of the cost of housing/rent. The consolidated salary was inclusive of house allowance, a fact known to the Claimant, who, contrary to her averments at clause 5, had not raised any issue on the house allowance being part of her consolidated salary. 4. The Respondent further avers that 5. The Claimant's duties were well articulated in her employment contract and included responding to client queries, resolving issues, escalating and following up on the resolution of escalated issues. Thus, the insinuation that her designated duties caused any negative impact is contradictory and denied. 6. The Claimant was not excluded in the manner she alleges or at all, she had assignments and duties throughout her employment and if she found her duties not meaningful, then this is an issue for the Claimant, not the Respondent. 7. The Claimant's attempts to create a narrative of alleged isolation, hostility or insinuated conspiracy are misleading and untruthful, and all such allegations are denied, in toto. 8. The Respondent further avers that the Claimant had demonstratively remained unable to accommodate feedback and had been assured numerously that departmental feedback is not personal but rather given with the desire for the Claimant's growth. 9. The Respondent averred that the Claimant never requested nor claimed to have requested the Respondent or applied for the extension of her employment contract prior to its expiry or at all. 10. The Respondent reiterated that the Claimant's employment terminated automatically by effluxion of time upon expiry of the employment contract. That the Respondent was under no legal or contractual obligation to renew the fixed-term employment contract with the Claimant and/or offer the Claimant reasons for non-renewal of the employment contract and that the Respondent's decision to renew the Claimant's employment contract was discretionary. That neither the Claimant's performance in the role, which was wanting, nor the availability of funding, imposed any legal and/or contractual obligation upon the Respondent to renew the Claimant's employment contract, and in the absence of an actual written promise to renew, which was never given, the Claimant cannot claim an entitlement at all. 11. Additionally, the Respondent averred that the non-renewal of the Claimant's employment contract did not bar the Respondent from inviting suitable candidates to apply for the role following its vacancy. 12. The Respondent therefore denied the particulars of non-renewal set out in the Statement of Claim. and puts the Claimant to strict proof of the same. The Respondent specifically denied the assertion that the non-renewal of the Claimant’s contract was retaliatory, as the end of a contract cannot be considered an act of retaliation. 13. The Respondent averred that it was under no contractual obligation to share the Respondent's financial status, and the Claimant cannot argue that such communication should have been made in the absence of any such obligation. 14. The Respondent averred that the allegations of legitimate expectation was misplaced, unjustified, and unfounded and seemed to be based on the sole assumptions or beliefs of the Claimant as no promise, assurance, or undertaking, written or otherwise, to renew the Claimant's contract was ever made by the Respondent, and none had been alleged to have been made, and therefore no legitimate expectation could arise. Further, the allegations that any actions of the Respondent offend Article 41 of the Constitution or any alleged statutory duty were denied by the Respondent. 15. Each and every allegation of retaliation, victimisation, side-lining, bad faith, arbitrariness and malafides alleged in the Statement of Claim was denied. The Respondent averred that it did not offended the provisions of Article 41 of the Constitution or Section 46 of the Employment Act or any other provision of the law as alleged or at all. 16. Accordingly, the Respondent denied that the Claimant suffered loss and damage as particularized in the Statement of Claim and further denied that the Claimant is entitled to any of the reliefs and/or remedies as prayed in the Statement of Claim or at all. **Claimant’s Rejoinder** 1. The Claimant filed a Reply to Statement of Response dated 22nd January, 2026 in which she reiterated the averments in her Statement of Claim and joined issues with the Respondent. **Evidence** 1. At the hearing the Claimant testified on her own behalf as CW1 while the Respondent called Mercy Musyimi who testified as CW1. Both witnesses adopted their respective witness statements and the bundles and documents filed on behalf of the respective parties. They were cross examined as reflected in the record. By and large the witnesses reiterated the evidence as summarized above. The parties thereafter filed written submissions. **Determination** 1. I have considered the pleadings, evidence and submissions before the court. I have further considered the authorities cited and relied upon by the parties. The issues that arise for consideration in my view are: 2. Whether the non-renewal of the Claimant’s contract amounted to an unfair termination of her contract and to unfair labour practice; 3. Whether the Claimant is entitled to house allowance; and 4. If the Claimant is entitled to reliefs sought in her claim. 5. On the first issue the Claimant submitted at length and in great detail why the court should find in her favour relying on legitimate expectation, sections 43, 45 and 47(5) of the employment Act on valid and fair reason for termination unfair labour practice. 6. The general rule in fixed term contracts has been restated by courts in numerous decisions including **Keen Cleaners Limited v Kenya Plantation and Agricultural Workers Union; Bernard Wanjohi Muriuki v Kirinyaga Water and Sanitation Company Limited & another; Transparency International - Kenya v Teresa Carlo Omondi;** and **Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho-Kariuki** – to the effect that a fixed term contract does not carry any expectation of renewal and comes to an end upon its expiry, and that the employer has no obligation to give reasons for non-renewal to the employee. 7. There are however, exceptions to this general rule as were set out in several of the cases cited. These include where the employer has expressly or impliedly created a legitimate expectation that the contract will be renewed. This was very aptly explained by Rika J. in the case of **Keen Cleaners Limited v Kenya Plantation and Agricultural Workers Union.** 8. In the instant case the Claimant relies on the provision in her contract that *“The contract is renewable, based on funding and performance”*. To my mind, this does not fit within the exceptions to the doctrine that fixed term contracts do not carry any expectation of renewal. The words *“the contract is renewable”* in my opinion, mean that there is a possibility of renewal of the contract if the circumstances referred to prevail. It is not the same as, for example, the words *“the contract shall be renewed …”* which would entail a more binding promise. 9. The reference to sections 43, 45 and 47(5) by the Claimant are in my view misplaced. These sections only apply where there is a termination of an existing contract which is terminated for grounds of *misconduct, poor performance or physical incapacity*, as set out in section 41 of the Employment Act, and not where there is no contract because the contract has since expired. 10. For these reasons I find that the Claimant’s contract lapsed and the Respondent was under no obligation to renew the same or give reasons for non-renewal. 11. On the prayer for house allowance, the Claimant’s contract provided as follows: *“****Compensation*** *Your gross salary is KES 107,496 per month. Inkomoko will remit all statutory employment taxes as required under Kenyan laws. Your estimated net compensation based on the current employment tax is KES 78,537 per month. Your salary will be prorated the first month for actual days worked. Future changes in employment tax rates may affect your net pay.* *Inkomoko will also pay for private medical insurance. Reimbursement for other pre-authorized expenses incurred from travel and other business-related expenses may be issued from the supervisor.* *Inkomoko will contribute up to 3.5% of your gross monthly salary to the provident fund through a selected fund manager. The employee will make a personal contribution of a minimum of 3.5% and a maximum of 5% of the gross salary. Fund membership is optional and cannot be exchanged for cash.”* 1. The provision for compensation makes reference to gross pay and net pay. These terms are not defined in the Employment Act which only defines “remuneration” to mean *“the total value of all payments in money or in kind, made or owing to an employee arising from the employment of that employee”.* 2. Section 31 provides: 31. *Housing* *(1) An employer shall at all times, at his own expense, provide reasonable housing accommodation for each of his employees either at or near to the place of employment, or shall pay to the employee such sufficient sum, as rent, in addition to the wages or salary of the employee, as will enable the employee to obtain reasonable accommodation.* *(2) This section shall not apply to an employee whose contract of service—* *(a) contains a provision which consolidates as part of the basic wage or salary of the employee, an element intended to be used by the employee as rent or which is otherwise intended to enable the employee to provide himself with housing accommodation; or* *(b) is the subject matter of or is otherwise covered by a collective agreement which provides consolidation of wages as provided in paragraph (a).* *(2) The Minister may, on the recommendation of the Board by notice in the Gazette, exclude the application of this section to a category of employees and such category of employees shall be dealt with as shall be specified in the notice.* 1. The words used in the Act are “…*contains a provision which consolidates as part of the basic wage or salary of the employee, an element intended to be used by the employee as rent or which is otherwise intended to enable the employee to provide himself with housing accommodation …”.* The Claimant’s contract refers to “gross salary” and not “basic salary” used in section 51 of the Act. 2. The words “consolidated salary” are not used in the Act but are derived from the wording used in section 31(2) of the Act to mean that the provision on payment of housing allowance in addition to basic wage does not apply to a salary which is intended to include an element of housing allowance. 3. Due to the fact that the terminologies “Basic wage”, “gross salary” and “consolidated salary” are not defined, they have been used interchangeably by parties. The meaning is therefore usually that assigned to the words by the parties or is intended by the parties. 4. So what is the difference between the words ***gross salary***, ***basic salary, consolidated salary*** and ***remuneration***? 5. Black’s Law Dictionary, Tenth Edition, defines “Consolidate” to mean “*to combine or unify (separate items) into one mass or body …*” 6. “Gross” is on the other hand defined as “*undiminished by deductions*” and “gross income” is defined as “*total income from all sources before deductions, exemptions, or other tax deductions*. “Remuneration” is defined as “*payment or compensation for a service that someone has performed*”. 7. The term “basic salary” as used in the Regulation of Wages (General) Order under which gazetted statutory minimum wages are set is the legislation which provides for 15% housing allowance with reference to the gazetted statutory minimum wages. 8. “Basic salary” therefore refers to the fixed core pay before any additions or deductions. “Gross salary” on the other hand is used to refer to a broader total that includes the basic salary *plus* any extra earnings like allowances housing, transport, bonuses, or overtime. 9. In [**Joseph Sani Orina v Hiprora Business Solution (EA) Limited [2017] KEELRC 1008 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1008/eng%402017-07-14), the court observed that gross salary, unlike basic salary, includes house allowance and other allowances paid in addition to basic pay. 10. With reference to the term consolidated salary, the court in the case of **Tamarind Restaurant Mombasa v Munga [2026] KEELRC 197 (KLR)**, held that a consolidated salary should be taken to mean a single, all-inclusive fixed amount of pay given to an employee without separate itemization of the usual components of remuneration. 11. In the instant case the Claimant relied on the decision in **Grain Pro Kenya Inc. Ltd v Andrew Waithaka Kiragu [2019] eKLR** where the court held: *“Looking at the letter of appointment which is subject contract against the above provision of the law and while conscious that it is not within the scope of courts to re-write a contract but merely to interpret, we find the contract of employment did not indicate whether the sum of USD 600 included house allowance and specifically provided that the respondent was to be paid “other benefits as required by law “. The Judge interpreted that contract although she did not specifically mention this particular clause to mean that the appellant was liable to pay the respondent house allowance. We cannot fault the Judge for that interpretation because house allowance is a benefit that is required under the Employment Act and the contract did not provide that house allowance was consolidated in the basic wage. Counsel for the appellant invited us to look at the payslip that indicated the sum of USD 600 was the gross salary. We hold the primary document of contract here was the letter of appointment as the pay slip does not constitute a contract. It is merely issued by the employer the employee has no part in its preparation or even a place to sign for it. For avoidance of doubt, we clarify that had the contract expressly stated that the salary of USD 600 was inclusive of house allowance, we would not have used the clause “other benefits as required by law” in the contract to award house allowance. We would have applied Section 31 (2) (a) of the Employment Act to exclude it.”* 1. It is important to note that in the said decision the court looked at the contract and specifically interpreted the said contract. The court even noted that it cannot rewrite the contract for the parties. 2. In the instant case RW1 stated that when she discussed the terms of the contract with the Claimant it was agreed that the sum paid would be inclusive of house allowance. 3. The wording in the contract in the instant case were more specific, making specific reference to gross pay and to net pay, and further providing expressly for the items not included in the gross pay being *private medical insurance, other pre-authorized expenses incurred from travel and other business-related expenses the provident fund*. There is no ambiguity in the contract. All extras in the contract are specifically referred to so as not to leave any doubt as to what the word gross salary in the contract was intended to mean. 4. From the foregoing it is my view that the Claimant was paid a gross salary which was inclusive of house allowance. **Remedies** 1. The court having found that the Claimant’s contract came to an end by effluxion of time and that her gross salary was inclusive of house allowance, the Claimant is not entitled to any of the remedies sought in the Statement of Claim. The result is that the claim is dismissed with an order that each party bears its costs of the suit. **DATED, SIGNED AND DELIVERED VIRTUALLY** **ON THIS 21ST DAY OF MAY, 2026.** **M. ONYANGO** **JUDGE**