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ELRCPartially AllowedCause No 890 of 2017· [2022] KEELRC 907 (KLR)

Francis Njeru Kariuki v Crown Paints Kenya Limited [2022] KEELRC 907 (KLR)

Employment and Labour Relations Court of Kenya
3 February 2022
JGJacob Gakeri
6,751 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed under a five-year non-renewable fixed term contract expiring 31 January 2017, sued for wrongful and unfair termination and discrimination in workplace promotion, seeking Kshs.3,075,923 in terminal dues and Kshs.10,000,000 in discrimination damages. After the contract lapsed, the Respondent advertised a new position of Business Development Manager; the Claimant applied, was interviewed and emerged the best candidate, but rejected the offer of 16 February 2017 over discrepancies (grading, reporting line, one-year duration, reference to 'renewal') and a later offer of 16 March 2017. The Respondent paid terminal dues of Kshs.936,114.65. The Court framed four issues: renewal, termination, discrimination and reliefs. It held the expired contract terminated by operation of law and was not renewable; the position was neither a renewal nor a promotion; the post-expiry service was an implied arrangement to facilitate conclusion of a new contract, which lapsed when negotiations failed; and there was no evidence of termination by the Respondent. However, the Court found the Claimant had a legitimate expectation of a new contract as Business Development Manager, which the Respondent bungled through contradictory offers and failure to respond to his concerns. The discrimination claim failed for want of evidence. The Court awarded the equivalent of three months' salary (Kshs.603,000) with costs and interest, disallowing all other heads of claim. Judgment dated 3 February 2022, delivered virtually at Nairobi by Dr. Jacob Gakeri, Judge.

Key legal issues

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01

Whether the Claimant's contract was renewed or the position of Business Development Manager was a promotion

Holding

The expired contract was not renewable; the new position was neither a renewal nor a promotion. The interim service after expiry impliedly facilitated conclusion of a new contract, which lapsed when negotiations fell through.

Reasoning

The five-year contract terminated by operation of law on 31 January 2017 and had no renewal clause. The parties could only enter a new contractual relationship negotiated afresh. Continued service and payment of February salary were in the context of pending negotiations, not renewal. The advertised position was new, graded CP6, and the offers had a commencement date of 1 February 2017, confirming no implied renewal.

p. 7
02

Whether the Claimant had a legitimate expectation of a new contract of employment

Holding

Yes - the Respondent bungled the Claimant's legitimate expectation of a new contract for the position of Business Development Manager and the Claimant suffered loss, attracting compensation of three months' salary.

Reasoning

Having emerged as the best candidate and been retained after expiry while formalities of the new contract were concluded, the Claimant's expectations were emboldened. The Respondent's contradictory offers (referencing 'Renewal of Contract', altering reporting lines and grading, downgrading the position) created confusion, and the Respondent failed to respond in writing to the Claimant's concerns.

p. 8
03

Whether the Claimant's employment was terminated by the Respondent

Holding

No - there was no evidence of termination; the interim arrangement lapsed when negotiations failed.

Reasoning

Although the memorandum of claim alleged termination on 29 March 2017, no evidence of the actual termination was led. Having found the post-expiry engagement was impliedly for concluding a new contract, that arrangement lapsed when negotiations fell through. Terminal dues of Kshs.936,114.65 were paid.

p. 8
04

Whether the Claimant was discriminated

Holding

No - the Claimant failed to establish discrimination on a balance of probabilities.

Reasoning

Apart from alleging the position was given to Mr. George Opundo, the Claimant provided no factual basis for the allegation - no shortlist or terms of Opundo's employment were produced. Applying the definitions of discrimination in Law Society of Kenya v Attorney General and Barclays Bank of Kenya v Gladys Muthoni, differential treatment attributable to protected characteristics was not shown.

p. 9

Legal principles established

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  • The expiry of a fixed term contract is an automatic termination by operation of law, not a dismissal or unfair termination
  • A contract of employment may be implied from conduct even without a written contract
  • An employee on a fixed term contract has no automatic right of renewal; legitimacy of expectation depends on the circumstances of each case

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for Kshs.603,000/- (equivalent of three months' salary) with costs
  2. 2.Interest at court rates from the date of judgment till payment in full

Authorities

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Legislation

  • Employment ActSections 41, 43, 45(2)(a), 44
  • Constitution of KenyaArticles 159(2)(d), 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (17)

  • Communications Commission of Kenya & 5 others v Royal Media Services Limited & 5 others
    [2014] eKLR
  • National Director of Public Prosecutions v Philip
    (2002) (4) SA 60(W)
  • Teresa Carlo Omondi v Transparency International-Kenya
    [2017] eKLR
  • Simon Muguku Gachigi v Taifa Sacco Society Limited
    [2017] eKLR
  • Alphonse Maghanga Mwachanya v Operation 680 Limited
    [2013] eKLR
  • Samuel Chacha Mwita v Kenya Medical Research Institute
    [2015] eKLR
  • Rajab Barasa and 4 Others v Kenya Meat Commission
    [2021] eKLR
  • Amatsi Water Services Company Limited v Francis Shire Chachi
    [2018] eKLR
  • Apex Steel Limited v Dominic Mutua Muendo
    [2020] eKLR
  • Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho-Kariuki
    [2017] eKLR
  • Eunice Mwikali Munyao v Elys Chemical Industries Limited
    [2017] eKLR
  • Margaret A. Ochieng v National Water Conservation and Pipeline Corporation
    [2014] eKLR
  • Kenya Airways Limited v Satwant Singh Flora
    [2013] eKLR
  • Dierks v University of South Africa
    [1991] 4 BLLR [LC]
  • Law Society of Kenya v Attorney General & another
    [2019] eKLR
  • Willis v The United Kingdom
    (2002) 34 EHRR 547
  • Barclays Bank of Kenya Ltd & another v Gladys Muthoni & 20 others
    [2018] eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction under the Employment and Labour Relations Court Act (claim for unfair termination and discrimination; judgment delivered under Article 159(2)(d) and Article 48 of the Constitution, Order 21 Rule 1 CPR and Section 1B Civil Procedure Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Francis Njeru Kariuki v Crown Paints Kenya Limited [2022] KEELRC 907 (KLR)", Case Analysis (2022). Cause No 890 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/907/eng@2022-02-03

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