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Court of AppealDismissedCivil Appeal No 101 of 2019· [2021] KECA 352 (KLR)

Keen Kleeners Limited v Kenya Plantation and Agricultural workers’ Union (Civil Appeal 101 of 2019) [2021] KECA 352 (KLR)

Court of Appeal of Kenya
17 December 2021
SKS. Gatembu KairuAMA. Mbogholi MsaghaPNP. Nyamweya
5,894 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed that repeatedly renewed fixed-term contracts can create a legitimate expectation of renewal, making non-renewal unfair termination unless the employer proves valid reasons.

What this practically means

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Executive summary

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This Court of Appeal at Mombasa (Kairu, Msagha and Nyamweya, JJA) heard a first appeal against an Industrial Court award in a claim brought by a union on behalf of 43 grievants who alleged their employment by the appellant, a labour supplier to Bamburi Cement's Diani biofuel project, was unlawfully terminated after they joined the union. The trial Court had directed the appellant to sign a corrected recognition agreement, held the grievants were not casual but regular employees entitled to statutory protections, found a legitimate expectation of renewal of their fixed-term contracts, and awarded four months' salary compensation for unfair termination, one month's pay in lieu of notice, outstanding salary and annual leave pay, while declining severance and overtime claims. On appeal, the Court restated its mandate under Selle v Associated Motor Boat Company to re-evaluate the evidence. It held the trial Court could determine unfair termination despite it not being expressly pleaded, as the issue was canvassed at trial, but erred in adjudicating the appellant-Bamburi Cement relationship, which was never an issue. The reference to the grievants as 'regular' workers was a semantic point; they were fixed-term employees. Critically, the Court held that a long-standing, uninterrupted practice of contract renewal from 2007, absent notice of non-renewal, created a legitimate expectation of renewal. That expectation shifted the burden to the appellant to justify non-renewal, which it failed to do given evidence of increased man-hours and further recruitment after July 2011. The finding of unfair termination under Sections 43 and 45 of the Employment Act was affirmed, and the appeal was dismissed with costs.

Key legal issues

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01

Pleadings and unpleaded issues

Holding

The trial Court could properly determine unfair termination and expectation of renewal because those issues were canvassed at trial, but it erred in making findings on the contractual relationship between the appellant and Bamburi Cement, which was not an issue for determination.

Reasoning

Parties are bound by their pleadings, but an issue fully canvassed at trial and left to the court may be determined even if unpleaded. The grievants' lock-out, termination and expectation of renewal were canvassed at trial. However, whether the appellant-Bamburi relationship amounted to unfair trade practice was never in issue at any stage, and the trial Court ought not to have weighed in on it.

p. 8
02

Employment status of the grievants

Holding

The grievants were fixed-term contract employees, not casuals; the trial Court's reference to them as 'regular' workers was a matter of semantics and did not vitiate its findings.

Reasoning

The evidence showed the grievants worked on fixed-term contracts of not less than three months and were paid monthly, inconsistent with the statutory definition of a casual employee. The trial Court's judgment read as a whole showed it was alive to the fixed-term nature of the contracts, so the label 'regular' did not amount to an error of substance.

p. 7
03

Legitimate expectation of renewal of fixed-term contracts

Holding

The long-standing, uninterrupted and consistent practice of renewing the grievants' contracts created a legitimate expectation of renewal, absent reasonable notice to the contrary.

Reasoning

Although the general rule is that a fixed-term contract ends by effluxion of time without the employer needing to justify non-renewal, repeated renewals of contracts running from 2007, together with the absence of notice of non-renewal, gave the grievants a legitimate expectation of renewal. The burden lies on the employee to prove such expectation, and it was discharged here on the evidence.

p. 10
04

Unfair termination

Holding

Non-renewal despite the legitimate expectation amounted to unfair termination; the appellant failed to prove a valid and fair reason since the evidence showed more, not fewer, workers would be required after July 2011.

Reasoning

Once legitimate expectation was established, the appellant had to justify non-renewal. Its defence — that work availability was determined by Bamburi Cement — was contradicted by evidence of increased man-hours and recruitment after July 2011. There was therefore no reason to interfere with the trial Court's finding of unfair termination under Sections 43 and 45 of the Employment Act.

p. 10

Legal principles established

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  • While a fixed-term contract ordinarily ends by effluxion of time without the employer needing to justify non-renewal, unique circumstances of the employment relationship — such as a long-standing, uninterrupted practice of renewal — may create a legitimate expectation of renewal, shifting the burden to the employer to justify termination.
  • Where a legitimate expectation of renewal exists, non-renewal amounts to termination and the employer bears the burden of proving valid and fair reasons under Sections 43 and 45 of the Employment Act.
  • A court may determine an unpleaded issue where the parties fully canvassed it and left it to the court.

Court orders

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  1. 1.The appeal is dismissed with costs
  2. 2.Orders accordingly

Authorities

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Legislation

  • Employment ActSection 40
  • Employment ActSections 28 and 27(2)
  • Employment ActSections 30 and 34
  • Employment ActSection 37
  • Employment ActSection 35(1)(c)
  • Employment ActSection 36
  • Employment ActSection 43
  • Employment ActSection 45
  • Labour Relations Act (South Africa)Section 186(b)

Cases cited (17)

  • Kenya Airways Limited v Aviation and Allied Workers Union and 3 others
    [2014] eKLR
  • Amatsi Water Services Company v Francis Shire Chachi
    [2018] eKLR
  • George Onyango v The Board of Directors of Numerical Machining Limited and others
    [2014] eKLR
  • Oshwal Academy (Nrb) & another v Indu Vishwanath
    Civil Appeal No. 125 of 2011; [2015] eKLR
  • Murang'a County Public Service Board v Grace N. Makori & 178 others
    Civil Appeal No. 37 of 2015
  • Selle and Another v Associated Motor Boat Company Limited and others
    [1968] 1 EA 123
  • Galaxy Paints Co. Ltd v Falcon Guards Ltd
    [2000] EA 885
  • Independent Electoral and Boundaries Commission & Another v Stephen Mutinda Mule & 3 others
    [2014] eKLR
  • Kinyanjui Kamau v George Kamau Njoroge
    [2015] eKLR
  • Odd Jobs v Mubia
    [1970] EA 476
  • Trocaire v Catherine Wambui Karuno
    [2018] eKLR
  • Bernard Wanjohi Muriuki vs. Kirinyaga Water And Sanitation Company Limited & another
    [2012] eKLR
  • Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho-Kariuki
    [2017] eKLR
  • Teresa Carlo Omondi v Transparency International- Kenya
    [2017] eKLR
  • Dierks v University of South Africa
    (J399/98) [1998] ZALC 126
  • Mediterranean Woollen Mills (Pty) Ltd. v South African Clothing and Textile Workers' Union
    (143/96) [1998] ZASCA 11
  • South African Clothing and Textile Worker's Union and Another v CADEMA Industries (Pty) Ltd
    (C 277/05) [2008] ZALC 5
On appeal from
Industrial Court (Employment and Labour Relations Court)
Not stated in the judgment
Jurisdiction invoked
First appeal to the Court of Appeal under its appellate mandate (expressly framed by the Selle v Associated Motor Boat Company principle); no specific constitutional or statutory provision is cited in the judgment.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Keen Kleeners Limited v Kenya Plantation and Agricultural workers’ Union (Civil Appeal 101 of 2019) [2021] KECA 352 (KLR)", Case Analysis (2021). Civil Appeal No 101 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/352/eng@2021-12-17

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.