Mutua Mulonzya v Fellowship of Christian Councils & Churches In the Great Lakes & Horn of Africa (Cause 555 of 2014) (Employment and Labour) [2020] KEELRC 1106 (KLR)
The bottom line
#Kenya's Employment Court confirmed employers must still give reasons and a hearing before letting a fixed term contract lapse, or pay for unfair termination.
What this practically means
#Executive summary
#Key legal issues
#Whether non-renewal of a fixed term contract can amount to unfair termination
Yes - although there is no obligation to renew, the termination of a fixed term contract on expiry must comply with the minimum requirements of the Employment Act; the employer must state the reason for non-renewal and give the employee an opportunity to make representations.
The court held that the revised labour laws, including section 3(6) of the Employment Act, create job security and an ordered separation. Where there had been previous renewals, it was necessary to hear the claimant on the reasons for non-renewal. The claimant was not heard, and the respondent's own witness conceded there was no formal complaint against him on behaviour, so the non-renewal was procedurally unfair.
Whether the reasons given for non-renewal (funding shortfall and poor behaviour) were valid
The reasons were disputed and undermined: the respondent's witness admitted there was no formal documented complaint against the claimant over his behaviour, and the appraisal recommendations presupposed continued engagement.
The claimant disputed both funding shortage and behavioural grounds. The respondent's witness, Mr Okeyo, conceded there was no formal complaint regarding the claimant's human relations. The supervisor's appraisal advised the claimant to improve weak areas, which could only be achieved if his engagement continued, undermining the case for non-renewal on those grounds.
Quantum of compensation for unfair termination
The court awarded two months' salary in lieu of notice and four months' salary as compensation, taking into account that the claimant was on a fixed term contract with no guarantee of automatic renewal.
In assessing compensation, the court tempered the award because the claimant was on a fixed term contract without automatic renewal guarantee. It awarded two months' salary in lieu of notice per the contract and four months' salary for unfair termination, subject to taxes and statutory deductions, plus costs.
Legal principles established
#- There is no obligation on any party to a fixed term contract to renew it, but conduct of the parties may create a legitimate expectation of renewal or of reasons why renewal would not happen.
- Termination of a fixed term contract upon expiry must still align with the minimum requirements of the Employment Act, including notice, a stated reason for non-renewal and an opportunity to make representations.
- Section 3(6) of the Employment Act renders agreements relinquishing or varying the statutory minimum terms null and void.
Court orders
#- 1.Award of two months' salary in lieu of notice of termination (Kshs 613,494)
- 2.Award of four months' salary as compensation for unfair termination (Kshs 1,226,988)
- 3.Costs to the claimant
- 4.Items (a) and (b) to be subjected to taxes and statutory deductions
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (intrinsic to the claim for unfair termination; no specific constitutional provision cited)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mutua Mulonzya v Fellowship of Christian Councils & Churches In the Great Lakes & Horn of Africa (Cause 555 of 2014) (Employment and Labour) [2020] KEELRC 1106 (KLR)", Case Analysis (2020). Cause No 555 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1106/eng@2020-05-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.