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ELRCAllowedNot stated in the judgment text· [2023] KEELRC 1201 (KLR)

Ashton Apparels (EPZ) Limited v Mwoni & 15 others (Appeal E055 of 2022) [2023] KEELRC 1201 (KLR)

Employment and Labour Relations Court
11 May 2023
1,033 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 ends on its agreed date, employers owe no notice pay.

What this practically means

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Executive summary

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The appellant employer appealed against the judgment in Mombasa CM ELRC No 848 of 2019 in which the respondents, machine operators, helpers and checkers whose employment ended on June 25, 2019, had claimed notice pay, leave pay, redundancy dues, service pay and compensation for unfair termination. The learned magistrate found the respondents were employed under fixed term contracts running from January 2, 2019 to June 25, 2019, found no unfair termination, and dismissed the claims, but awarded 20 days' salary in lieu of notice, holding that the notice issued on June 15, 2019 gave 10 days instead of the 30 days required by Section 35 of the Employment Act. The respondents did not participate in the appeal despite service, but the court, as a first appellate court, re-evaluated the trial record and made its own findings. Relying on Transparency International Kenya v Teresa Carlo Omondi and Communications Commission of Kenya v Royal Media Services, the court held that a fixed term contract has an agreed start and end date under Section 10(3)(c) of the Employment Act, creates no legitimate expectation of renewal, and terminates by effluxion of time. Since the appellant had also notified the respondents that the contracts would not be extended, no notice was due. The court found the magistrate's award of notice pay erroneous, allowed the appeal, set aside that aspect of the trial judgment, and awarded the appellant costs of the appeal.

Key legal issues

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01

Whether notice is payable on the expiry of a fixed term contract

Holding

No notice is payable where the parties are bound by a fixed term contract with an agreed end date; the magistrate's award of 30 days' notice pay was in error.

Reasoning

The parties contracted under fixed term contracts running from January 2, 2019 to June 25, 2019 under Section 10(3)(c) of the Employment Act. Section 35 notice obligations apply to indefinite contracts; a fixed term ends by effluxion of time, and the appellant additionally notified the respondents the contracts would not be extended. The magistrate's contrary finding was therefore erroneous and the award of 20 days' pay in lieu of notice could not stand.

p. 3
02

Whether a fixed term contract creates a legitimate expectation of renewal

Holding

A fixed term contract creates no legitimate expectation of renewal; the relationship terminates by effluxion of time absent mutual agreement otherwise.

Reasoning

Relying on Transparency International Kenya v Teresa Carlo Omondi, the court held that a fixed term contract has a start and end date and confers no legitimate expectation of renewal. The doctrine of legitimate expectation as explained in Communications Commission of Kenya v Royal Media Services belongs to public law and does not assist employees on fixed term contracts.

p. 2
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Duty of a first appellate court

Holding

As a first appeal, the court is required to re-evaluate the trial record and make its own findings and conclusions.

Reasoning

The respondents did not attend or participate despite service, so the appeal was unchallenged. Nonetheless, being a court of record exercising first appellate jurisdiction, the court addressed the appeal on the merits by re-evaluating the record of the trial court rather than allowing it merely for want of opposition.

p. 2

Legal principles established

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  • A fixed term contract does not create any legitimate expectation of renewal; unless otherwise mutually agreed, the employment relationship terminates by effluxion of time.
  • Where parties are bound by a fixed term contract, no notice is due at its expiry.

Court orders

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  1. 1.The appeal is allowed as having merit
  2. 2.The judgment in Mombasa CM ELRC No 848 of 2019 is set aside/allowed as prayed (notice pay award overturned)
  3. 3.The appellant is awarded costs of the appeal

Authorities

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Legislation

  • Employment Act, 2007Section 10(3)(c)
  • Employment Act, 2007Section 35

Cases cited (3)

  • Samuel Chacha Mwita v Kenya Medical Research Institute
    [2014] eKLR
  • Transparency International Kenya v Teresa Carlo Omondi
    Civil Appeal No. 81 of 2018
  • Communications Commission of Kenya & 5 others v Royal Media Services Limited & 5 others
    [2014] eKLR
On appeal from
Magistrates' Court (CM ELRC), Mombasa
CM ELRC No 848 of 2019
Jurisdiction invoked
First appeal from the magistrates' court (statutory appeal; specific provision not cited in the judgment)

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, "Ashton Apparels (EPZ) Limited v Mwoni & 15 others (Appeal E055 of 2022) [2023] KEELRC 1201 (KLR)", Case Analysis (2023). Not stated in the judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1201/eng@2023-05-11

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