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ELRCPartially AllowedCause No. 29 of 2015· [2020] KEELRC 974 (KLR)

Alfred Langat v Carzan Flowers (K) Limited [2020] KEELRC 974 (KLR)

Employment and Labour Relations Court of Kenya at Nakuru
4 June 2020
MMM. Mbaru
1,595 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 refusing to renew a fixed-term contract isn't unfair termination, but the worker still won an underpayment claim.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a security guard at Rongai, Nakuru County from 13th May, 2013, sued for unfair termination after the human resource manager informed him on 16th May, 2014 that his contract had lapsed and would not be renewed. He claimed compensation for unfair termination, notice pay, pay for 16 days worked in May 2014, annual leave of 21 days, underpayments and costs. The respondent's case was that the claimant was engaged on two successive 6-month fixed term contracts ending 16th May, 2014; that there was no obligation to renew; and that all dues, including 24 leave days, had been paid per the applicable agricultural Wage Orders. The court held that the fixed term contracts were lawful under section 10(3)(c) of the Employment Act, 2007, and ended on their own terms; non-renewal of a fixed term contract does not amount to unfair termination under sections 43 and 45, so compensation and notice pay were refused. The annual leave claim also failed because the claimant was paid for 24 leave days, above his statutory entitlement of 0.75 days per month (18 days in total). On underpayments, however, the court accepted the claimant's evidence that he earned Ksh.5,445 monthly, rising to Ksh.6,071, while the applicable Regulation of Wages (Agricultural Industry) (Amendment) Order, 2013 prescribed Ksh.6,606 for a security guard, and awarded underpayments of Ksh.12,680. All other claims were dismissed with each party bearing their own costs. Judgment was delivered electronically on 4th June, 2020 pursuant to COVID-19 court directions.

Key legal issues

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01

Whether non-renewal of a fixed term contract is unfair termination

Holding

No. The two 6-month contracts were lawful under section 10(3)(c) of the Employment Act, ended on their terms, and non-renewal gave rise to no claim for compensation or notice pay.

Reasoning

The court found the respondent filed two contracts of employment each for 6 months with stated start and end dates. Section 10(3)(c) permits fixed-term engagement. Because the contracts ended by effluxion of time and in accordance with the agreed terms, employment ended lawfully. Non-renewal was a matter within the respondent's discretion and did not attract sections 43 and 45 remedies.

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02

Whether the claimant was underpaid contrary to the applicable Wage Orders

Holding

Yes. The claimant was underpaid Ksh.1,161 per month for 10 months and Ksh.535 per month for 2 months, totalling Ksh.12,680.

Reasoning

The respondent, an agricultural employer at Rongai, was bound by the Regulation of Wages (Agricultural Industry) (Amendment) Order, 2013 (Legal Notice No.196 of 30th July, 2013) under which a security guard's basic wage was Ksh.6,606. Accepting the claimant's evidence of Ksh.5,445 per month (later Ksh.6,071), the court computed underpayments of Ksh.11,610 plus Ksh.1,070.

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03

Whether annual leave pay was due

Holding

No. The claimant accrued 0.75 days per month (18 days over 12 months) but was actually paid for 24 leave days, a benefit exceeding the statutory minimum.

Reasoning

Section 28(2) provides 0.75 days of leave per month worked. The contract offered 1.92 leave days per month and the last pay slip included leave pay for 24 days. Having been paid beyond his entitlement, the claim for further annual leave pay failed.

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Legal principles established

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  • Non-renewal of a lawful fixed term contract that ends on its own terms does not constitute unfair termination under sections 43 and 45 of the Employment Act
  • The employer may offer employment on fixed terms under section 10(3)(c) of the Employment Act, 2007, and such contracts end on their stated terms

Court orders

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  1. 1.Judgment entered for the claimant on underpayments at Ksh.12,680
  2. 2.All other claims dismissed
  3. 3.Each party to bear own costs
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)

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, "Alfred Langat v Carzan Flowers (K) Limited [2020] KEELRC 974 (KLR)", Case Analysis (2020). Cause No. 29 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/974/eng@2020-06-04

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