Wambua v Lordship Africa Fund Management Ltd (Cause 549 of 2019) [2023] KEELRC 2214 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the contract lapsed by effluxion of time or was renewed by conduct
The contract was renewed by conduct effective 24th October 2018; the verbal notice of 11th December 2018 was therefore a termination, not a non-renewal.
The contract required extension to be by prior written agreement, but the Respondent neither renewed nor gave non-renewal notice before expiry. The Claimant continued working without a break in continuity and was paid for October, November and 11 days of December 2018. This conduct induced a reasonable and legitimate expectation of renewal, implied a contract from conduct, and meant the later verbal notice operated as a termination requiring compliance with the Employment Act.
Whether the termination was unfair
The verbal notice was an unfair termination; no valid reason was given and the Claimant was not heard.
Once the contract stood renewed by conduct, the Respondent's verbal notice amounted to a termination which had to satisfy Sections 45, 43, 47(5) and 41 of the Employment Act. The letter contained no reason for termination and no hearing was accorded. Substantive justification and procedural propriety were both absent, following the test in Walter Ogal Anuro v Teachers Service Commission.
Whether the clearance form waived further claims
The Claimant did not waive the right to pursue further claims, but all claims in respect of final dues were extinguished.
The clearance form was signed voluntarily and bound the parties, but the court construed it as specific to terminal dues then owing; it made no reference to further claims such as compensation for unfair termination. The submission that it was vitiated by misrepresentation failed for want of pleading and proof. Consequently, contractual obligations (notice pay, house allowance, leave) were absolved, but the unfair termination claim survived.
What remedies are available
Declaration of unfair termination plus three months' gross salary (Kshs.300,000) under Section 49; notice, house allowance and leave claims declined.
The court exercised its discretion under Section 49(1)(c) and (4) of the Employment Act, taking into account the fairly short service of about 2 years and 2 months, the absence of an appeal against termination, the Claimant's non-contribution to the termination, and his failure to express a wish to remain in employment, arriving at three months' gross salary as fair compensation.
Legal principles established
#- A fixed term contract that has expired may be renewed or extended by conduct of the parties where the employer continues to engage and pay the employee after expiry, giving rise to a legitimate expectation of renewal.
- Termination without valid reason and without a hearing offends Sections 41, 43, 45 and 47(5) of the Employment Act and is unfair.
- A discharge voucher or clearance form binds the parties unless vitiated; whether it bars further claims depends on its import and whether it was voluntarily executed.
Court orders
#- 1.Declaration that termination of the Claimant's employment was unfair.
- 2.Equivalent of three (3) months salary, Kshs.300,000/=.
- 3.Costs of the suit to the Claimant.
- 4.Interest at court rates from date of judgment till payment in full.
- Jurisdiction invoked
- Employment and labour relations jurisdiction (Article 162(2) of the Constitution; Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wambua v Lordship Africa Fund Management Ltd (Cause 549 of 2019) [2023] KEELRC 2214 (KLR)", Case Analysis (2023). Cause No 549 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2214/eng@2023-09-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.