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Court of AppealPartially AllowedCourt of Appeal Appeal (as cited in judgment; memorandum of appeal referenced)· [2023] KECA 1499 (KLR)

Kenya Institute of Curriculum Development v Nyamudhe (Civil Appeal 145 of 2019) [2023] KECA 1499 (KLR)

Court of Appeal of Kenya
8 December 2023
4,032 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that fixed-term contracts expire when they end — employers need not renew them or give notice unless the contract says so.

What this practically means

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Executive summary

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The Court of Appeal (Okwengu, M'inoti and Mativo, JJA) allowed an appeal against the Employment and Labour Relations Court (Wasilwa, J.), which had held that a Government circular raising the mandatory retirement age from 55 to 60 years, together with past contract renewals and an employer-approved loan, gave an employee a legitimate expectation that his fixed-term contract would be renewed automatically until age 60. The Court of Appeal held that the circular of 20 March 2009 did not provide for automatic renewal: contracts expiring before attainment of 60 years were to be renewed only 'in accordance with the provisions of the contracts', and the respondent's last contract (1 September 2008 to 31 December 2010) contained no renewal clause, unlike his earlier contracts. Past renewals therefore could not found a legitimate expectation, and an automatically renewable fixed-term contract was, following the Court's own decision in Transparency International-Kenya v. Teresa Carlo Omondi, a contradiction in terms. The loan, whose repayment exceeded the contract term, had been obtained by the respondent altering his application forms from Kshs 350,000 to Kshs 850,000 - conduct amounting to fraud - and could not ground 'legitimate' expectation. The Court further held that the ELRC conflated unlawful termination with expiry by effluxion of time: a fixed-term contract that runs its full term requires no notice or payment in lieu. However, the award of gratuity was upheld as sufficiently pleaded and proved. The judgment of the ELRC was set aside, the respondent retained only his gratuity upon clearing with the appellant, and the appellant received costs in both courts.

Key legal issues

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01

Interpretation of the Government circular of 20 March 2009

Holding

The circular did not automatically renew the respondent's contract; contracts expiring before attainment of 60 years were to be renewed in accordance with their provisions.

Reasoning

The circular addressed three classes of workers. The respondent fell in the second class - contracts expiring before 60 - which were to be renewed only in accordance with the contract's provisions. The last contract had no renewal clause, unlike earlier contracts. Holding that the circular automatically renewed the contract would make nonsense of the language used in the circular.

p. 5
02

Whether legitimate expectation of renewal arose from the circular, contract, past renewals or the loan

Holding

No legitimate expectation arose from any of these sources; the loan was obtained through manipulated application forms constituting fraud.

Reasoning

Neither the circular nor the contract created expectation of renewal. Previous renewals rested on contracts that expressly provided for renewal, unlike the last one. The loan was obtained by altering application forms from Kshs 350,000 to Kshs 850,000, evidence the ELRC ignored; a party cannot benefit from his own mischief.

p. 7
03

Whether three months' notice of non-renewal was required

Holding

No notice was required; the ELRC conflated unlawful termination with expiry by effluxion of time.

Reasoning

The contract contained no notice-of-non-renewal clause. Notice or payment in lieu was required only for termination before expiry under the contract's termination provisions. The contract ran its full term and simply expired, so the award for unlawful termination was a fundamental misdirection.

p. 7
04

Gratuity

Holding

The award of gratuity was upheld as sufficiently pleaded and proved.

Reasoning

The respondent had prayed for terminal dues and benefits, which include gratuity. The appellant was not taken by surprise and suffered no prejudice, so the ELRC's award of gratuity stands.

p. 7

Legal principles established

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  • Contracts expiring before attainment of 60 years under the 2009 circular were to be renewed only in accordance with the provisions of the contracts, not automatically.
  • An automatically renewable fixed-term contract is a contradiction in terms; whether a contract with a renewal clause will be extended is at the discretion of the employer and cannot create a legal right under legitimate expectation.
  • A fixed-term contract that runs its full term expires by effluxion of time; notice or payment in lieu is required only for termination before expiry where the contract so provides.
  • Legitimate expectation arises only from promise, representation or past practice by a public body; a practice founded on contracts with different provisions cannot create expectation as to a contract with different terms.

Court orders

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  1. 1.Appeal allowed
  2. 2.Judgment of the ELRC set aside
  3. 3.Respondent entitled to his gratuity under the last fixed-term contract upon clearing with the appellant
  4. 4.Appellant to have costs of the claim in the ELRC and costs of this appeal

Authorities

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Legislation

  • Government Circular No. OP/CAB 2/7ACircular dated March 20, 2009 on mandatory retirement age

Cases cited (13)

  • Cleopatra Kama Mugyenyi v. Aidspan
    [2016] eKLR
  • Teresa Carlo Omondi v. Transparency International-Kenya
    [2017] eKLR
  • Registered Trustees of the Presbyterian Church of East Africa & another v. Ruth Gathoni Ngotho-Kariuki
    [2017] eKLR
  • Minie Mburu v. Jamii Board Bank Ltd
    [2017) eKLR
  • SA Rugby Players Association & others v SA (Pty) Ltd & others
    [2008] 29 ILJ 2218
  • Samuel Chacha Mwita v. Kenya Medical Research Foundation
    [2014] eKLR
  • Attorney-General of Hong Kong v Ng Yuen Shiu
    [1971] 1 All ER 1148
  • Njai Mutitu v. University of Nairobi
    [2020] eKLR
  • Ramji Ratna & Co. Ltd v. Wood Products (Kenya) Ltd
    CA. No. 117 of 2001
  • Attorney General of Belize v. Belize Telecom Ltd
    [2009] 2 All ER 1127
  • Communication Commission of Kenya & 5 Others v. Royal Media Services & 5 Others
    [2014] eKLR
  • Transparency International-Kenya v. Teresa Carlo Omondi
    CA No. 81 of 2018
  • Registered Trustees of the Presbyterian Church of East Africa & another v. Ruth Gathoni Ngotho
    [2017] eKLR
On appeal from
Employment and Labour Relations Court
Jurisdiction invoked
First appellate jurisdiction over the Employment and Labour Relations Court (reference to duty of a first appellate court); specific statutory provision not stated in the judgment.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Institute of Curriculum Development v Nyamudhe (Civil Appeal 145 of 2019) [2023] KECA 1499 (KLR)", Case Analysis (2023). Court of Appeal Appeal (as cited in judgment; memorandum of appeal referenced). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1499/eng@2023-12-08

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