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ELRCPartially AllowedCause No. 280 of 2017· [2018] KEELRC 2593 (KLR)

Josephat Kipsanga Biwott v Eastern Produce Kenya Limited (Chemomi Estate) [2018] KEELRC 2593 (KLR)

Employment and Labour Relations Court of Kenya
29 June 2018
MMM. Mbaru
1,716 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 when a fixed term contract simply expires, that is not unfair termination, but employers who lack leave and housing records must still pay up.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a tea plucker, sued for unlawful termination of employment and unpaid dues, seeking two months' notice pay, seven years' accrued leave pay, unpaid housing allowance for seven years, redundancy dues, compensation and costs. He asserted he was unionised but his union was not notified, that he was denied a hearing, and that he was sent away after reporting back following a workplace injury, which he linked to his dismissal. The respondent's case was that the claimant served under successive fixed term contracts from 2010 to 2016, that he voluntarily terminated his last contract by two weeks' notice which was accepted, that accommodation was available on the estate though he opted to live at his nearby home, and that prorated leave was paid on exit. The court framed two issues: whether there was unlawful termination, and whether the remedies sought were due. Relying on section 10(3)(c) of the Employment Act and the Fatuma Abdi authority, the court found fixed term employment lawful and held that the expiry of the last contract did not amount to unfair termination. The defence of voluntary resignation was not materially challenged. Compensation, notice pay and redundancy dues were accordingly refused, redundancy not engaging section 40 of the Act. However, because the employer failed to produce records under section 28 showing how leave was enjoyed, leave pay of Kshs.2,531.75 for the four months of the last contract was awarded, and since no specific housing allocation was identified under section 31, house allowance of Kshs.5,696.40 for the same period was awarded. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether termination of employment was unlawful

Holding

There was no unfair or unlawful termination; the claimant served under fixed term contracts which ended on their own terms

Reasoning

The claimant was engaged on successive fixed term contracts, the last running from 1st January to 30th April 2016. Such contracts are lawful under section 10(3)(c) of the Employment Act. The claimant did not allege non-payment for the term of the last contract, and the defence that he resigned and his notice was accepted was not materially challenged. Expiry of a fixed term contract is not unfair termination.

p. 2
02

Whether accrued leave pay for 7 years was due

Holding

Leave pay due only for the 4 months of the last contract, Kshs.2,531.75

Reasoning

Each contract was served for its terms and lapsed. The respondent was required under section 28 of the Employment Act to keep records showing how the leave entitlement was enjoyed. Having failed to produce such records for the last contract period, leave for the 4 months was awarded.

p. 3
03

Whether unpaid housing allowance was due

Holding

House allowance of Kshs.5,696.40 awarded for the 4 months of the last contract

Reasoning

Section 31 of the Employment Act requires the employer to provide housing or an allowance. Although the respondent asserted housing was allocated within its quarters and camp, the specific allocated quarters were never identified, and had allocation occurred the contract of service ought to have defined it. The court inferred there was no such allocation.

p. 3
04

Whether notice pay, compensation and redundancy dues were due

Holding

None of these remedies were due

Reasoning

The contract ended on its own terms without renewal, so notice pay was not payable. No unfair termination was found, so statutory compensation did not arise. The facts did not engage section 40 of the Employment Act on redundancy, so redundancy dues did not arise.

p. 3

Legal principles established

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  • A fixed term contract of employment is a lawful mode of employment with a start and end date, and expiry of such a contract does not amount to unfair termination
  • The employer bears the duty to keep records of how leave benefits were enjoyed by the employee; failing production of such records, leave is payable

Court orders

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  1. 1.Judgment entered for the claimant for leave pay of Kshs.2,531.75
  2. 2.Judgment entered for the claimant for house allowance of Kshs.5,696.40
  3. 3.Each party to bear own costs

Authorities

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Legislation

  • Employment Actsection 10(3)(c)
  • Employment Actsection 28
  • Employment Actsection 31
  • Employment Actsection 40

Cases cited (1)

  • Fatuma Abdi versus Kenya School of Monetary Studies
    [2017] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court (Cause filed under the Employment Act)

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, "Josephat Kipsanga Biwott v Eastern Produce Kenya Limited (Chemomi Estate) [2018] KEELRC 2593 (KLR)", Case Analysis (2018). Cause No. 280 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2593/eng@2018-06-29

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