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Court of AppealPartially AllowedCivil Appeal 41 of 2019· [2022] KECA 532 (KLR)

Kenya Red Cross Society v Omar

Court of Appeal
6 May 2022
SKS. Gatembu KairuPNP. NyamweyaJLJ. Lesiit
3,541 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 employers can let fixed-term contracts expire without renewal, provided they give proper notice of non-renewal.

What this practically means

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Executive summary

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The Court of Appeal at Mombasa (Kairu, Nyamweya and Lesiit, JJA) allowed an appeal by the Kenya Red Cross Society against a judgment of the Employment and Labour Relations Court (Rika, J.) which had found that the Society unfairly terminated the respondent Abdulrahman Omar's employment and awarded him Kshs. 480,000.00, being 12 months' salary in compensation. The respondent, a driver engaged on successive short-term renewable contracts between 2008 and 2013, was injured on duty in April 2012 while changing a tyre. By letter dated 27th November 2013 the Society notified him that his contract, expiring on 31st December 2013, would not be renewed. The trial Judge inferred that the non-renewal was improperly motivated by the respondent's injury and diminished productivity. The appellate court, applying the principle that it will not disturb findings of fact unless based on no evidence, misapprehension of the evidence or wrong principles, held that this inference was speculative and unsupported: the Society had extended the respondent's contracts twice after the injury, and due notice of non-renewal was given. Relying on Keen Kleeners, Trocaire, De La Salle, Emmanuel Mutembi Nthambi, Bernard Wanjohi Muriuki and Margaret A. Ochieng, the Court reaffirmed that an employer has no obligation to renew a fixed term contract upon expiry and no obligation to justify non-renewal beyond the lapse of the fixed period, and that no legitimate expectation of renewal arose given the interruptions between contracts and the notice given. The ELC judgment was set aside and the respondent's claim dismissed, with each party bearing its own costs before the ELC and on appeal.

Key legal issues

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01

Whether non-renewal of a fixed term contract on its expiry constitutes unfair termination

Holding

No. The employer has no obligation to renew a fixed term contract upon expiry and no obligation to justify non-renewal beyond the lapse of the fixed period.

Reasoning

The Court reviewed the contract history showing the respondent was engaged on successive short-term renewable contracts in different locations with breaks in between. Citing Keen Kleeners, De La Salle, Emmanuel Mutembi Nthambi and Trocaire, it held that fixed term contracts carry no rights beyond the expiry date and the employer has a discretion to renew or not. The trial Judge's contrary conclusion rested on speculation.

p. 5
02

Whether the trial Judge's finding that non-renewal was motivated by the respondent's injury and diminished productivity was supported by the evidence

Holding

No. The finding was speculative and unsupported, since the appellant extended the respondent's contracts twice after the injury.

Reasoning

The injury occurred on 3rd April 2012 during a contract that was subsequently extended on 22nd June 2012, and a further renewal letter of 10th May 2013 covered the respondent to 31st December 2013. Had injury and diminished productivity motivated the appellant, these post-injury extensions would not have been expected. The Judge also failed to consider breaks in employment and the due notice of non-renewal.

p. 5
03

Whether the respondent had a legitimate expectation of continued employment and renewal

Holding

No. Notice was duly given that the contract would not be renewed, and there were interruptions between contracts, so no legitimate expectation of renewal was created.

Reasoning

While Keen Kleeners recognises that unique circumstances may create a legitimate expectation of renewal, that case turned on a long standing, uninterrupted practice of renewal without notice. Here, the respondent's employment history was interrupted between contracts, and the appellant gave notice by letter dated 27th November 2013 that the contract expiring on 31st December 2013 would not be renewed.

p. 6

Legal principles established

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  • Once a fixed term contract ends, the employer has no obligation to justify termination on grounds beyond the lapse of the fixed period, and fixed term contracts carry no rights or obligations beyond the expiry date.
  • An appellate court will not normally interfere with a finding of fact by the trial court unless it is based on no evidence, on a misapprehension of the evidence, or on demonstrably wrong principles.
  • A court must enforce a contract as agreed by the parties and should not imply terms merely because it deems them reasonable.
  • Legitimate expectation of renewal of a fixed term contract may arise from a long standing, uninterrupted and consistent practice of renewal, absent reasonable notice to the contrary.

Court orders

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  1. 1.Appeal allowed
  2. 2.Judgment of the ELC set aside and substituted with an order dismissing the respondent's claim
  3. 3.Each party to bear the costs of the proceedings before the ELC and of this appeal

Authorities

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Cases cited (7)

  • Makube vs Nyamuro
    [1983] eKLR

    Principle that an appellate court will not normally interfere with a trial court's finding of fact unless based on no evidence, misapprehension of evidence, or wrong principles.

  • Bernard Wanjohi Muriuki vs Kirinyaga Water & Sanitation Company & another
    [2012] eKLR

    That an employer has no obligation to renew an employment contract upon expiry; fixed term contracts carry no rights beyond the expiry date.

  • Margaret A. Ochieng vs National Water & Pipeline Corporation
    [2014] eKLR

    Same propositions on non-obligation to renew fixed term contracts and employer's discretion to renew or not.

  • Keen Kleeners Limited vs. Kenya Plantation and Agricultural Workers Union
    (Civil Appeal No. 101 of 2019) [2021] KECA 352

    General position on expiry of fixed term contracts; also that unique circumstances may create a legitimate expectation of renewal.

  • Trocaire v Catherine Wambui Karuno
    [2018] eKLR

    That once a fixed term contract ends, the employer need not justify termination beyond lapse of the fixed period; courts enforce contracts as agreed.

  • The Registered Trustees De La Salle Christian Brothers t/a St. Mary's Boys Secondary School vs. Julius D. M. Baini
    [2017] eKLR

    No obligation to give notice of expiry or non-renewal of a fixed term contract; no unfair termination arises from mere expiry.

  • Emmanuel Mutembi Nthambi vs. Tarmal Wire Products Ltd
    [2019] eKLR

    Employer's contractual right to exercise discretion not to renew a fixed term contract; termination unfair or otherwise not an issue on expiry.

On appeal from
Employment and Labour Relations Court at Mombasa
ELRC Cause 30 of 2016
Jurisdiction invoked
First appellate jurisdiction over the Employment and Labour Relations Court (no specific constitutional/statutory provision 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 (1)

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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, "Kenya Red Cross Society v Omar", Case Analysis (2022). Civil Appeal 41 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/532/eng@2022-05-06

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