Kaveke v Pak Space Limited (Cause 744 of 2018) [2023] KEELRC 1690 (KLR)
The bottom line
#A Kenyan court ruled that letting a fixed-term employee keep working after expiry creates an expectation of renewal, so ending employment later was unfair.
What this practically means
#Executive summary
#Key legal issues
#Whether the claimant was on a fixed term contract or permanent employment
The claimant was employed on a two-year fixed term contract commencing 1st October 2014, as stated in the letter of 11th June 2015; having accepted the variation by conduct, he was estopped from contending otherwise.
The court held that terms of employment may be derived from multiple documents. The confirmation letter introduced a two-year renewable contract. Although the variation was made without consultation as required by law, the claimant raised no objection, continued working, and thus accepted the variation by conduct. Reliance was placed on estoppel principles from Combe v Combe, High Trees and Century Automobiles.
Whether the termination was unfair
The termination was unfair both substantively and procedurally. The respondent declared the claimant redundant without complying with section 40(1) of the Employment Act, adduced no evidence of performance evaluation, and its conduct in allowing the claimant to work and be paid five months past contract expiry created a legitimate expectation of renewal.
The termination letter scrapped the CEO position citing poor company performance but made no reference to the claimant's performance, and no evaluation evidence was produced. The mandatory provisions of section 40(1)(a)-(c) (written notification and labour office notification) were not complied with. Further, the respondent's five-month inaction after contract expiry induced a reasonable expectation of renewal, rendering the late non-renewal letter an afterthought and the termination unfair.
Whether the claimant was entitled to the reliefs sought
The court granted a declaration of unfair termination, one month's notice pay (having already been paid two months), three months' salary as compensation under section 49(1)(c), costs and interest; it declined anticipatory salary, leave pay and redundancy pay.
Notice pay was reduced to one month because two months' salary had been paid as terminal dues. Compensation was fixed at three months considering the short service of 2 years 5 months, the prayer for reinstatement, the claimant's non-contribution to the termination, and his admission of theft incidents by staff. Anticipatory benefits, leave pay and redundancy pay all failed for want of evidence or legal anchorage.
Legal principles established
#- Terms of employment may be derived from various documents, including the appointment letter and the letter of completion of probation.
- An employee who accepts a variation of contractual terms by conduct is estopped from challenging the variation.
- An employer who permits an employee to continue working and paying him long after expiry of a fixed term creates, by conduct, a reasonable expectation of renewal; a purported non-renewal notice issued months later is an afterthought and amounts to unfair termination.
- A valid termination requires both substantive justification and procedural fairness; failure to comply with section 40(1) of the Employment Act renders a purported redundancy unlawful.
Court orders
#- 1.Declaration that termination of the Claimant's employment was unfair.
- 2.One month's salary in lieu of notice.
- 3.Equivalent of three (3) months' salary as compensation under Section 49(1)(c) of the Employment Act.
- 4.Costs of this suit to the Claimant.
- 5.Interest at court rates from date of judgment till payment in full.
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and labour relations claims (Article 41 of the Constitution and Employment Act, 2007 invoked in the pleadings)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kaveke v Pak Space Limited (Cause 744 of 2018) [2023] KEELRC 1690 (KLR)", Case Analysis (2023). Cause No 744 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1690/eng@2023-07-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.