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ELRCPartially AllowedCause E046 of 2021 (Statement of Claim filed 15th December 2015)· [2023] KEELRC 1825 (KLR)

Muthee v Italiana (Cause 2244 of 2015) [2023] KEELRC 1825 (KLR)

Employment and Labour Relations Court
28 July 2023
JRJames Rika
5,035 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 ruled that repeatedly renewed fixed-term contracts create a reasonable expectation of renewal, and dismissing an employee over a criminal charge without a hearing is unfair.

What this practically means

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Executive summary

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The Claimant, a Cameraman/Editor/Producer employed by the Respondent Italian media house from 2010, claimed unfair and unlawful termination after his last fixed-term contract expired on 30th June 2015 and he received a termination/dismissal letter on 29th July 2015. He sought notice pay, accumulated annual leave, paternity leave, 12 months' compensation for unfair termination, overtime, severance pay, costs and interest, totalling Kshs. 7,046,531. The Respondent contended the contract expired by effluxion of time with no obligation to renew, and alternatively that it lost trust and confidence in the Claimant after he was charged with theft of its Kshs. 109,000. The Respondent called no witness. The Court framed three issues: reasonable expectation of renewal; whether there was termination and if unfair; and entitlement to remedies. It held that 9 fixed-term contracts renewed unfailingly over 5 years, continuity of service without written contracts between 2012 and 2014, and continued work past expiry generated a reasonable expectation of renewal, and drew on Section 45(5)(d) of the Employment Act on previous practice. The Court found, from two letters and the criminal trial testimony of Vicenzo Nucci, that the Claimant was actually dismissed because of the criminal charge, which was neither a valid reason nor followed fair procedure; he was later acquitted. The claim was partially allowed: declaration of unfair termination, notice pay, cumulative annual leave, paternity leave and 10 months' gross salary as compensation, totalling Kshs. 4,928,439, with costs and interest. Overtime and severance pay were declined for want of evidential or contractual basis. The Court also urged legislative intervention akin to Section 186(1)(b) of the South African Labour Relations Act.

Key legal issues

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01

Reasonable expectation of renewal of fixed-term contracts

Holding

The Court found the Claimant reasonably expected renewal after 9 fixed-term contracts over 5 years, with continuity of service even between contracts

Reasoning

The Claimant served 9 fixed-term contracts over 5 years, all renewed except the last. He continued working past expiry dates, including 18 months without a written contract. His role as the Respondent's only Cameraman in Africa was core to the media business. The Court held that repeated rolling over of contracts generates a reasonable expectation of renewal, and that periodic short-term contracts amounted to casualization of labour.

p. 6
02

Whether the contract expired by effluxion of time or was terminated unfairly

Holding

The Claimant was dismissed, not simply subject to non-renewal; the dismissal lacked valid reason and fair procedure and was unfair and unlawful

Reasoning

Two letters from the Head of Bureau, one referenced 'termination' and one 'dismissal', together with Vicenzo Nucci's evidence in the criminal trial, showed the Claimant was dismissed because he was charged with theft. The charge did not amount to a valid and fair reason; no disciplinary hearing was convened; and the criminal case ended in acquittal. The Respondent called no witness, so its effluxion-of-time defence was unsupported.

p. 8
03

Cumulative entitlements over continuous service

Holding

Accrued benefits such as annual leave are assessed cumulatively over the 5-year continuous service rather than per contract

Reasoning

Because the Court found continuity of service despite gaps in written contracts, the Claimant could pursue unpaid benefits accrued over the whole period. He was granted full annual leave for 2011-2014 plus pro-rata leave for 7 months in 2015, and paternity leave for the birth of his daughter in 2012, since the Respondent did not dispute the birth notification or the leave application.

p. 9

Legal principles established

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  • Where an employee has been employed on fixed-term contracts for many years with each contract unfailingly renewed, and continues working past expiry, the employee is entitled to reasonably expect renewal
  • Previous practice of the employer under Section 45(5)(d) of the Employment Act must be considered before concluding that fixed-term contracts carry no expectancy of renewal
  • Whether there is a reasonable expectation of renewal is a question of fact in each case, despite the general rule against automatic renewal
  • An employer who dismisses an employee on the basis of a criminal charge must still comply with Sections 41, 43, 45 and 47 of the Employment Act; being charged is not a valid and fair reason for dismissal

Court orders

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  1. 1.It is declared that non-renewal and termination of the Claimant's contract of employment was unfair and unlawful
  2. 2.The Respondent shall pay the Claimant 1-month salary in lieu of notice at Kshs. 306,495
  3. 3.The Respondent shall pay annual leave at Kshs. 1,403,747
  4. 4.The Respondent shall pay paternity leave at Kshs. 153,247
  5. 5.The Respondent shall pay equivalent of 10 months' gross salary in compensation for unfair termination at Kshs. 3,064,950 (total Kshs. 4,928,439)
  6. 6.Costs to the Claimant
  7. 7.Interest granted at court rate from the date of Judgment till payment is made in full

Authorities

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Legislation

  • Employment Act, 2007Sections 41, 43, 45 and 47
  • Employment Act, 2007Section 45(5)(d)
  • Employment Act, 2007Section 29(8) (paternity leave)
  • Employment Act, 2007Section 40 (severance)
  • Employment Act, 2007Section 90 (limitation of 3 years)
  • South African Labour Relations ActSection 186(1)(b)
  • Constitution of Kenyafair labour practices (referenced)

Cases cited (10)

  • Mary Chemweno Kiptui v. Kenya Pipeline Company Limited
    [2014] e-KLR
  • Zablon Bisonga Mose v. Rela Careers Limited
    [2018] e-KLR
  • Caliph O. Ogega v. National Social Security Fund
    Cause 280 of 2013
  • Paul Juma Okina v. First Assurance Company Limited
    [2017] e-KLR
  • Kenya Ports Authority v. Modern Holding E.A. Limited
    [2016] e-KLR
  • Elias Kibathi & Another v. the Attorney-General
    [2021] e-KLR
  • Bernard Wanjohi Muriuki v. Kirinyaga Water & Sanitation Company Limited & Another
    E&LRC Cause No. 1541 of 2010
  • Trocaire v. Catherine Wambui Karuno
    [2018] e-KLR
  • Margaret A. Ochieng’ v. National Water Conservation & Pipeline Corporation
    [2014] e-KLR
  • Frenchon v. The Secretary-General of the United Nations
    UNAT Case No. 2010-125
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 and the Constitution (fair labour practices)

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, "Muthee v Italiana (Cause 2244 of 2015) [2023] KEELRC 1825 (KLR)", Case Analysis (2023). Cause E046 of 2021 (Statement of Claim filed 15th December 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1825/eng@2023-07-28

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