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ELRCDismissedCause No. 4 of 2016· [2018] KEELRC 32 (KLR)

Tom Iganji Luvialuvi v Catholic Diocese of Nakuru [2018] KEELRC 32 (KLR)

Employment and Labour Relations Court of Kenya
30 July 2018
2,893 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed a fixed-term contract ends automatically on its expiry date, so the cook was owed no notice pay, overtime, or extra gratuity.

What this practically means

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Executive summary

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The claimant, a cook employed by the Catholic Diocese of Nakuru from January 2006 to 31 December 2013 under successive fixed term written contracts, claimed underpayments against the applicable Wage Orders, overtime pay for working through lunch hours and extended Saturday hours, gratuity computed on the alleged correct minimum wage, three months' notice pay, and compensation under section 49 of the Employment Act. During his testimony he conceded the unfair termination claim, narrowing the dispute to remedies. The court framed three issues: entitlement to benefits under the various contracts, whether the terms and conditions were unfavourable, and whether the remedies sought were due. The court first limited the suit to claims arising within three years of filing under section 90 of the Employment Act, following the Court of Appeal's holding that a statute-barred cause of action ousts jurisdiction; only claims under the last contract (2011-2013) were addressable. On the merits, the court found the wages paid under the last contract, together with house allowance, exceeded the Nakuru minimum wage under the 2011-2013 Wage Orders, so no underpayments arose. Overtime was excluded by an express contract clause, and the employer having met the contract terms and paid above the minimum wage, no fault was found. Gratuity computations at 25% of the basic wage paid were found correct. Notice pay was held not due because a fixed term contract ends on its own term; the claimant was notified of expiry, did not apply for renewal, and the notice provisions applied only to termination before the stated end date; the notice pay actually paid was treated as extra. The entire claim was dismissed with each party bearing its own costs.

Key legal issues

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01

Whether a fixed term contract requires notice pay on expiry

Holding

Notice pay is not due where a fixed term contract lapses on its end date and the employee does not seek renewal; notice provisions apply only to termination before the stated end date

Reasoning

The court read clause 10 of the contract as governing early termination before the stated period. Since the claimant was informed of the expiry and invited to apply for renewal but did not, the contract ended on its own terms on 31 December 2013. Notice was therefore not due, and the notice pay the respondent paid was treated as an ex gratia extra payment.

p. 4
02

Whether claims outside the three-year limitation period under section 90 of the Employment Act are maintainable

Holding

No; only claims arising within three years of filing are addressable

Reasoning

Relying on section 90 of the Employment Act and the Court of Appeal decision in E. Torgbor v Ladislaus Odongo Ojuok, the court held that where a cause of action is statute barred, the court has no jurisdiction to entertain it. The suit, filed on 11 January 2016, could only reach claims from 10 January 2013 onwards, i.e. those within the last contract.

p. 3
03

Whether the claimant was underpaid relative to the applicable Wage Orders

Holding

No; the wages paid under the last contract exceeded the minimum wage applicable in Nakuru

Reasoning

The court compared the contracted wage of Kshs.5,400 plus house allowance (Kshs.6,400 total) against the 2011 Nakuru Wage Order minimum of Kshs.4,676 plus 15% house allowance (Kshs.5,377.40 total), finding payment above the minimum. For 2012 and 2013 the graduated wages likewise exceeded the minimum, and gratuity was paid as agreed.

p. 4
04

Whether the claimant was entitled to overtime for working over lunch hours and Saturdays

Holding

No; the contract expressly excluded overtime remuneration and the terms were met

Reasoning

Clause 4 of the contract set the working hours and expressly provided that the claimant was not entitled to remuneration for overtime worked due to the nature of the work. The claimant signed the contract in acceptance, and since the employer paid above minimum wage and met the contract terms, no fault could be found.

p. 4
05

Whether gratuity was due based on alleged underpayments

Holding

No; gratuity was calculated on the actual basic wage paid as agreed, and since no underpayment was found, no further gratuity accrued

Reasoning

The gratuity claim was contingent on there being underpayments. The court found the wages paid exceeded the statutory minimum, and the respondent's gratuity computations at 25% of basic wage were correct, leaving nothing unpaid.

p. 4

Legal principles established

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  • A fixed term contract terminates automatically on expiry of its term without the need for notice, unless the parties agree to renew it
  • Claims outside the three-year limitation window under section 90 of the Employment Act are time barred

Court orders

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  1. 1.The claims made by the claimant are dismissed as having no justification
  2. 2.Each party to pay own costs

Authorities

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Legislation

  • Employment Actsections 8, 9, 10(1), 10(3)(c), 49, 90
  • Limitation of Actions Actsection 4(1)
  • Societies Act
  • Wage Orders for Nakuru area (2011, 2012, 2013)

Cases cited (3)

  • Kennedy Ouru Okise versus James Finlays (K) Limited
    [2016] eKLR
  • Anne Theuri versus Kadet Limited
    Cause No.368 (N) of 2009
  • E.Torgbor versus Ladislaus Odongo Ojuok
    [2015] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court; claims grounded in the Employment Act, 2007 (including sections 8, 9, 10, 49 and 90) and applicable Wage Orders

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, "Tom Iganji Luvialuvi v Catholic Diocese of Nakuru [2018] KEELRC 32 (KLR)", Case Analysis (2018). Cause No. 4 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/32/eng@2018-07-30

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