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ELRCDismissedNot stated in the judgment· [2023] KEELRC 2042 (KLR)

Baraza v Alice Dale Limited (Civil Appeal E132 of 2021) [2023] KEELRC 2042 (KLR)

Employment and Labour Relations Court
24 August 2023
1,840 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 simply expires, an employer owes no notice, hearing, or severance pay.

What this practically means

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Executive summary

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This was a first appeal to the Employment and Labour Relations Court (Mathews N. Nduma, J) against the judgment of Hon. C.W. Mugor, Senior Resident Magistrate, Limuru, delivered on 30/9/2021, which had dismissed a former watchman's claim against a tea-growing and processing company. The appellant claimed he was employed from 2017 on a continuous basis as a night watchman guarding the respondent's planes in a hangar, that his employment was terminated without notice or hearing, and that the termination amounted to a redundancy under Section 40 of the Employment Act. He sought compensation for unlawful termination, severance pay at 15 days' salary per completed year, one month's notice pay, and underpayment of Kshs.232,026 under general wage orders, plus costs and interest. The trial court found he was a farm worker on a fixed term contract which expired in February 2020, that no redundancy occurred, and that the agricultural wage orders (Legal Notices No. 111 of 2017 and No. 3 of 2018) applied, his salary exceeding the applicable minimum wage. On appeal, the court re-evaluated the evidence, noting successive signed fixed term contracts with gaps and unrenewed expiry of the last contract dated 29/11/2019 to 25/2/2020. Applying Selle v Associated Motor Boat Company and following Bernard Wanjohi Muriuki v Kirinyaga Water and Sanitation Company Limited, the court held there was no obligation to give reasons or a hearing for non-renewal of a fixed term contract. It affirmed the trial court's findings in their entirety, dismissed the appeal, and in the spirit of parity in labour relations directed each party to bear their own costs both here and below. It also obliquely observed on the Protective Security Services wage order without deciding the point, as it had not been raised.

Key legal issues

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01

Nature of the employment relationship - fixed term or continuous

Holding

The appellant was employed on successive fixed term contracts, the last expiring on 25/2/2020 without renewal; termination was by effluxion of time and not by redundancy

Reasoning

The respondent produced six signed contracts spanning 26/11/2017 to 25/2/2020 with gaps between them, corroborating evidence that the appellant was engaged as and when required. The trial magistrate's finding on this was correct and was affirmed.

p. 3
02

Entitlement to notice pay, severance pay and a hearing on non-renewal of a fixed term contract

Holding

None of these was due; Sections 36, 41, 43, 44 and 45 of the Employment Act do not apply to expiry of a fixed term contract, and there was no contractual clause requiring reasons or a hearing

Reasoning

Following Bernard Wanjohi Muriuki v Kirinyaga Water and Sanitation Company Limited, the only reason required for non-renewal is that the term has come to an end. The claim that the termination was a redundancy was not proved.

p. 3
03

Applicable minimum wage order

Holding

The agricultural wage order (Legal Notices No. 111 of 2017 and No. 3 of 2018) applied, not the general wage orders relied on by the appellant; the salary of Kshs.8,500 to Kshs.10,000 satisfied the applicable minimum wage

Reasoning

The respondent's memorandum and articles of association showed its main objective was farming and agriculture. The watchman's wage under the agricultural orders was Kshs.7,409 and Kshs.7,779.45 for the relevant periods, which the appellant's pay exceeded.

p. 3
04

Protective Security Services wage order

Holding

The court noted, without deciding, that the security services wage order may prevail over the agricultural wage order where its terms are better, and provides for gratuity at 18 days' salary per period served

Reasoning

The issue was not raised before the trial court or in the appeal, so the court declined to make any determination on it, merely guiding labour officers conciliating matters in the security sector.

p. 4

Legal principles established

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  • An employer has no obligation to give reasons for non-renewal of a fixed term contract; effluxion of time suffices unless the contract requires additional justification
  • On a first appeal the court re-evaluates the evidence and draws its own conclusions while making allowance for not having seen or heard the witnesses

Court orders

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  1. 1.The appeal is dismissed in its entirety
  2. 2.Each party to meet their own costs of the suit before the trial Court and this Court

Authorities

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Legislation

  • Employment ActSection 40
  • Employment Act, 2007Sections 36, 41, 43, 44 and 45
  • Legal Notice No. 112 of 2017 (general wage order)Not stated
  • Legal Notice No. 2 of 2018 (general wage order)Not stated
  • Regulation of Wages in the Agricultural Industry - Legal Notice No. 111 of 2017Not stated
  • Regulation of Wages in the Agricultural Industry - Legal Notice No. 3 of 2018Not stated
  • Regulations of Wages (Protective Security Services) 1998, 2003 and as amendedNot stated

Cases cited (2)

  • Selle -vs- Associated Motor Boat Company Limited
    [1968] E.A 123
  • Bernard Wanjohi Muriuki -vs- Kirinyaga Water and Sanitation Company Limited & Another
    [2012] eKLR
On appeal from
Senior Resident Magistrate's Court, Limuru
Not stated in the judgment
Jurisdiction invoked
First appeal from the magistrate's court (not expressly stated; appeal against the judgment of Hon. C.W. Mugor, SRM, delivered 30/9/2021)

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, "Baraza v Alice Dale Limited (Civil Appeal E132 of 2021) [2023] KEELRC 2042 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2042/eng@2023-08-24

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