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ELRCPartially AllowedCause No E808 of 2021· [2023] KEELRC 1870 (KLR)

Yamo v Kenya Rural Roads Authority (Cause E808 of 2021) [2023] KEELRC 1870 (KLR)

Employment and Labour Relations Court
31 July 2023
3,555 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that ending a long-serving employee's fixed-term contract without notice or a hearing was unfair, awarding her over Kshs 9.6 million.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 2009 and latterly Deputy Director – Human Resource & Administration, sought reinstatement or, alternatively, declarations and payments arising from the respondent's letter of September 13, 2021 declining renewal and ending her contract effective September 30, 2021. She claimed the termination was unfair, unlawful and unprocedural, seeking notice pay, gratuity for two prospective three-year contracts, 12 months' compensation, salary and leave pay for six years based on legitimate expectation, a certificate of service, costs and interest. The respondent maintained the contract expired by effluxion of time, that non-renewal was the board's prerogative, that no legitimate expectation arose, and that gratuity and dues up to September 30, 2021 had been paid. The court found that the claimant's expectations were legitimate and had crystallized through the letter of June 30, 2021, criticized state corporations' casual handling of renewals, and held the respondent breached the claimant's contract without cause or reason. Reinstatement was refused because the claimant had obtained alternative employment, as were gratuity and salary for service not rendered. The court declared the termination unfair and unprocedural and awarded three months' salary in lieu of notice (Kshs 1,934,625/-), twelve months' compensation (Kshs 7,738,500/-), a certificate of service within 24 hours on pain of Kshs 10,000/- per day, interest, and costs of the suit.

Key legal issues

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01

Whether the termination of the claimant's contract was unfair and unprocedural

Holding

The court found the termination unfair, unprocedural and against the law governing fair labour practices, the respondent having broken the contract without cause or reason

Reasoning

The claimant had requested renewal as required, had been rated 'very good'/'good' in her appraisals, and had received a letter of June 30, 2021 which the court found extended her contract. The board's decision to terminate without reason, notice to show cause or a hearing breached the employment contract and fair labour practices, entitling her to notice pay and maximum compensation.

p. 6
02

Whether a legitimate expectation of renewal had crystallized

Holding

The court held the claimant's expectations were legitimate and had crystallized via the letter of June 30, 2021

Reasoning

Applying the principles in Teresa Carlo Omondi, the court found that the claimant's 12 years of service, her timely renewal request, her good performance ratings and the extension letter of June 30, 2021 gave her rational and objective grounds; the expectations were legitimate and had crystallized, though reinstatement was no longer available.

p. 6
03

Whether damages could be awarded for anticipated future service

Holding

Damages premised on service not yet rendered were refused

Reasoning

While the claimant succeeded on the fairness claim and was awarded notice pay and 12 months' compensation, the court declined gratuity and salaries for the six-year period she would hypothetically have worked, as these were premised on service not rendered.

p. 6

Legal principles established

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  • An employee claiming legitimate expectation of renewal of a fixed-term contract bears the burden of demonstrating rational and objective reasons for the expectation
  • State corporations must handle contract renewals with regard to the requirements of the law, good governance and merit considerations

Court orders

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  1. 1.A declaration that the respondent board's decision to terminate the claimant's contract of employment on September 13, 2021 is unfair, unprocedural and against the law governing fair labour practices
  2. 2.Three-month's salary in lieu of notice of Kshs 1,934,625/-
  3. 3.Twelve months' salary as compensation for unfair and unprocedural termination of Kshs 7,738,500/-
  4. 4.Certificate of service within 24 hours of the judgment in compliance with section 51 of the Employment Act, failing which payment of Kshs 10,000/- per day for the breach
  5. 5.Interest on the sums in lieu of notice and compensation at court rates from the date of judgment till payment in full
  6. 6.Interest on the certificate of service penalty at commercial rates from the date of breach till compliance
  7. 7.Costs of the suit to the claimant

Authorities

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Legislation

  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 51

Cases cited (7)

  • Keen Kleeners Limited v Kenya Plantation and Agricultural Workers' Union
    (Civil Appeal 101 of 2019) [2021] KECA 352 (KLR)
  • Teresa Carlo Omondi v Transparency International-Kenya
    [2017] eKLR
  • Kenya Union of Printing, Publishing, Paper Manufacturers and Allied Workers v Timber Treatment International Limited
    [2013] eKLR
  • Kenya Broadcasting Corporation v Geoffrey Wakio
    [2019] eKLR
  • Samuel Chacha Mwita v Kenya Medical Research Institute
    [2014] eKLR
  • Margaret A Ochieng v National Water Conservation & Pipeline Corporation
    [2014] eKLR
  • George Onyango v The Board of Directors of Numerical Machining Limited & others
    [2014] eKLR
Jurisdiction invoked
Original jurisdiction under the Employment Act and the Employment and Labour Relations Court Act (not expressly 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, "Yamo v Kenya Rural Roads Authority (Cause E808 of 2021) [2023] KEELRC 1870 (KLR)", Case Analysis (2023). Cause No E808 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1870/eng@2023-07-31

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