Kibaara v LOLC Kenya Microfinance PLC (Cause 1027 of 2016) [2023] KEELRC 1448 (KLR)
The bottom line
#A Kenyan court ruled a CEO's contract ended when it expired, not renewed—she got only one month's pay despite claiming millions.
What this practically means
#Executive summary
#Key legal issues
#Whether the contract was renewed or lapsed by effluxion of time
The contract lapsed on January 31, 2015 as renewal was discretionary and no three-month notice of intention to renew issued per clause 12(c)
Clause 12 made renewal discretionary and required communication of intention to renew at least three months before expiry. No such communication issued, and the Chairman's letter of January 26, 2015 confirmed lapsing. The court therefore held the parties parted on January 31, 2015, rejecting the claim of continued employment through to January 2016.
Effect of the CEO's recall of the claimant after expiry
The recall was performance of clause 1(b), retention to complete handover work on month-to-month terms, not an amendment or renewal of the contract
The CEO's emails of February 2 and 25, 2015 showed the claimant was retained to complete handover reports. Though clause 10 required written amendments signed by an authorised person, the court held the recall was not an amendment but performance of the retention clause. In the absence of notice, the parties are deemed to have separated at the end of February 2015, with the claimant entitled to February's salary and one month's pay in lieu of notice.
Whether separation amounted to unfair termination
No - the handover work was completed and the parties separated by effluxion, so no due procedure beyond notice was required
The court reasoned that the recall was specific and short-term, and the claimant herself confirmed completing the handover reports by late February 2015. Since both parties accepted the reporting and handover works were accomplished, there was no termination for a reason requiring procedural fairness - the relationship simply ended on completion, rendering the constructive/unfair termination claim baseless.
Whether discrimination and unfair labour practice were established
Not established - the Finance Manager and CEO held distinct posts with individually negotiated contracts
The claimant compared her pay with the Finance Manager's and a later CEO's. The court found no comparability: each position had its own negotiated contract, the claimant freely negotiated her own terms, and it was not shown her role was heavier. Nor did she claim she was denied either position. Allegations of discrimination and unfair labour practice were found baseless.
Legal principles established
#- Where a fixed-term contract lapses by effluxion of time and the employee is retained under a completion clause, retention operates month-to-month terminable on one month's notice or pay in lieu
- Discrimination in remuneration is not established where the comparator posts are distinct and hold separately negotiated contracts with no comparable circumstances
Court orders
#- 1.The respondent to pay the claimant Kshs 530,000.00 less due PAYE by August 1, 2023, failing interest at court rates from the date of filing the suit until full payment
- 2.The respondent to pay the claimant's 50% costs of the suit
- 3.A declaration that discrimination has not been established in the circumstances as alleged for the claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction admitted by the respondent in its response
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kibaara v LOLC Kenya Microfinance PLC (Cause 1027 of 2016) [2023] KEELRC 1448 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1448/eng@2023-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.