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ELRCDismissedCause No 1677 of 2017· [2022] KEELRC 1528 (KLR)

Daniel v Sadoline E.A Limited (Cause 1677 of 2017) [2022] KEELRC 1528 (KLR)

Employment and Labour Relations Court
14 June 2022
2,594 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed that when a fixed-term contract simply expires, refusing to renew it is not unfair termination — and employees must prove any promise of renewal.

What this practically means

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Executive summary

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The claimant, through a memorandum of claim dated 9th June 2017, sought a declaration that his employment was wrongly and unfairly terminated, unpaid dues of Kshs. 12,600, one month's notice pay, twelve months' salary as compensation (Kshs. 151,200), punitive and aggravated damages for breach of constitutional rights, and costs. He alleged employment from 1st January 2011 at Kshs. 12,600 per month and wrongful termination on 3rd January 2017 without notice, dues or severance. The respondent denied the claim, asserting the claimant was employed on a six-month fixed-term contract from 1/7/2016 to 31/12/2016 which expired by effluxion of time and was not renewed; that upon expiry the claimant was paid final dues of Kshs. 11,380 by cheque, which he acknowledged in a statement confirming he had no further claim; that leave days were paid; and that service pay was inapplicable as he was an NSSF member. The claimant's witness confirmed the only signed contract was the six-month one and admitted signing the final dues statement, contending he signed without understanding and in expectation of re-employment. The court framed four issues: whether there was a fixed-term contract, legitimate expectation of renewal, unfair termination, and entitlement to reliefs. Relying on authorities on fixed-term contracts and legitimate expectation, the court held that fixed-term contracts carry no expectancy of renewal, that the burden of proving legitimate expectation lies on the employee and requires a clear, unambiguous representation, and that none existed here. There being no termination, non-renewal could not be unfair. The court found the claimant was paid accumulated leave and that the service pay claim was misconceived due to NSSF membership. The claim was dismissed in its entirety, with each party bearing its own costs.

Key legal issues

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01

Whether the claimant was on a fixed-term contract

Holding

The claimant was employed on a six-month fixed-term contract from 1/7/2016 to 31/12/2016, evidenced by the appointment letter produced in court; there was no proof of employment dating back to 2011.

Reasoning

The appointment letter and the statement of final dues corroborated the respondent's account. The claimant himself confirmed the only contract he signed was that of 1/7/2016 to 31/12/2016 and that he received a cheque of Kshs. 11,380 as final dues. No documentary evidence supported earlier continuous employment, and the muster roll was not produced.

p. 4
02

Whether there was a legitimate expectation of renewal

Holding

No legitimate expectation arose; there was no express promise or clear representation of renewal, and the contract contained no expectancy clause.

Reasoning

Applying the cited authorities, the court held that fixed-term contracts carry no expectancy of renewal and any expectation must rest on a clear and unambiguous representation or regular practice. The claimant's assertion of past renewals was unsupported, and the burden lay on him to establish the expectation.

p. 4
03

Whether the termination was unfair

Holding

There was no termination; the contract expired automatically by effluxion of time and non-renewal cannot amount to unfair termination.

Reasoning

The contract had inbuilt termination mechanisms (7 days' notice or pay in lieu if terminated before expiry). Non-renewal of an expired fixed term is not a termination. No ill motive or countervailing circumstances were demonstrated to bring the case within the exceptions to the general rule.

p. 5
04

Entitlement to service pay and leave dues

Holding

The service pay claim was misconceived as the claimant was an NSSF member; accumulated leave was paid in the final dues statement which he acknowledged.

Reasoning

The December 2016 payslip showed NSSF deductions with no allegation of non-remittance, excluding service pay under Section 35 of the Employment Act. The statement of final dues recorded payment of leave and other dues, and although the claimant claimed he signed without understanding it, the court accepted the respondent's evidence that he was given time to read and acknowledged the cheque.

p. 5

Legal principles established

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  • Fixed term contracts carry no expectancy of renewal absent a clause or clear representation
  • Where there is no provision for renewal the contract expires automatically on effluxion of time
  • Burden of proving legitimate expectation of renewal rests on the employee and requires a clear and unambiguous representation
  • An employee who is a member of NSSF is not entitled to service pay under Section 35 of the Employment Act

Court orders

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  1. 1.The claim is dismissed in its entirety - the prayers by the Claimant fail in total
  2. 2.Each party to bear its own costs

Authorities

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Legislation

  • Employment ActSection 35
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B
  • Constitution of KenyaArticles 159(2)(d) and 48

Cases cited (4)

  • Margarete A Ochieng versus National Water Conservation and Pipeline
    [2014] eKLR
  • Ruth Gathoni Ngotho Kariuki versus the Presbyterian Church of East Africa Limited
    [2012] eKLR
  • Cleopatra Kama Mugyenyi versus Aidspan
    [2019] eKLR
  • Teresa Carlo Omondi versus Transparency International Kenya
    (2017) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Employment Act; Civil Procedure Act, Section 1B referenced in the COVID-19 order)

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, "Daniel v Sadoline E.A Limited (Cause 1677 of 2017) [2022] KEELRC 1528 (KLR)", Case Analysis (2022). Cause No 1677 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1528/eng@2022-06-14

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