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ELRCPartially AllowedCause No 162 of 2017· [2018] KEELRC 2046 (KLR)

Benchard Dendeche v Africa Pearl Hotel Limited [2018] KEELRC 2046 (KLR)

Employment and Labour Relations Court
10 May 2018
LNLINNET NDOLO
1,058 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that working past a fixed-term contract's expiry renews the contract by conduct, so termination requires due process and compensation.

What this practically means

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Executive summary

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The Claimant, employed as an Accountant on 4th January 2015 at a monthly salary of Kshs. 30,000, sued for compensation for unfair termination and final dues. He claimed that on 8th August 2015, while driving the Respondent's motor vehicle in the course of duty, it stalled, and the Respondent instructed him to pay for repairs as a condition of retaining his employment. His employment was terminated by letter dated 1st February 2016. The Respondent filed appearance but no reply, and the matter proceeded ex parte. The Court framed two issues: whether the termination was lawful and fair, and whether the Claimant was entitled to the remedies sought. The Respondent's termination letter asserted that the Claimant's six-month fixed term contract had expired on 1st January 2016 and would not be renewed, citing failure to update books of accounts. The Court held that since the Claimant had worked a full month after the contract's expiry, and the Respondent knowingly retained him, the contract had been renewed by the conduct of the parties. Termination was therefore subject to Sections 41 and 43 of the Employment Act, 2007. As the letter carried undertones of poor performance without any due process, the termination was unlawful and unfair. The Court awarded five months' salary in compensation, one month's salary in lieu of notice, salary for January 2016 and one year's leave pay, totalling Kshs. 231,000 with interest at court rates from the date of judgment. Gratuity and the NSSF/NHIF claims were dismissed. The Claimant was granted a certificate of service and costs.

Key legal issues

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01

Whether the termination of the Claimant's employment was lawful and fair

Holding

The termination was unlawful and unfair because the contract had been renewed by conduct after expiry of the fixed term, and the employer relied on poor performance without subjecting the Claimant to due process under Sections 41 and 43 of the Employment Act

Reasoning

The Respondent's letter dated 1st February 2016 claimed the contract had simply expired, yet the Claimant had worked a full month after the contract expiry date. The Court distinguished the fixed-term jurisprudence, holding the contract had been renewed by conduct. The letter carried undertones of poor performance, which would require due process under Sections 41 and 43 of the Employment Act, which was not followed.

p. 2
02

Whether the Claimant is entitled to the remedies sought

Holding

Compensation of five months' salary, one month's pay in lieu of notice, January 2016 salary, and one year's leave pay were awarded; gratuity and NSSF/NHIF claims were dismissed

Reasoning

In assessing compensation the Court considered the Claimant's length of service and the Respondent's conduct in the termination transaction. Leave pay was awarded as no leave records were produced to the contrary. Gratuity lacked any basis, and statutory dues were held payable to the statutory bodies rather than the employee.

p. 2

Legal principles established

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  • Where an employer knowingly retains an employee after expiry of a fixed term contract, the contract is deemed renewed by conduct, and termination is subject to Sections 41 and 43 of the Employment Act

Court orders

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  1. 1.Judgment for the Claimant of Kshs. 231,000 comprising 5 months' salary in compensation (Kshs. 150,000), 1 month's salary in lieu of notice (Kshs. 30,000), salary for January 2016 (Kshs. 30,000) and leave pay for 1 year (Kshs. 21,000)
  2. 2.Interest on the award at court rates from the date of judgment until payment in full
  3. 3.Claimant entitled to a certificate of service
  4. 4.Costs of the case awarded to the Claimant

Authorities

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Legislation

  • Employment Act, 2007Sections 41 and 43

Cases cited (1)

  • Teresa Carlo Omondi v Transparency International
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and Article 162(2) of the Constitution (not expressly cited; claim brought under the Employment Act, 2007)

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, "Benchard Dendeche v Africa Pearl Hotel Limited [2018] KEELRC 2046 (KLR)", Case Analysis (2018). Cause No 162 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2046/eng@2018-05-10

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