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ELRCPartially AllowedCause No 549 of 2019· [2023] KEELRC 2214 (KLR)

Wambua v Lordship Africa Fund Management Ltd (Cause 549 of 2019) [2023] KEELRC 2214 (KLR)

Employment and Labour Relations Court
27 September 2023
3,348 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The Claimant, employed by the Respondent on a two-year fixed term contract from 24th October 2016 to 23rd October 2018 at Kshs.100,000 per month, sued for unfair termination and terminal dues after the Respondent gave him a verbal notice of termination on 11th December 2018, some seven weeks after the contract's expiry. The Respondent maintained that the contract simply lapsed and was not renewed, and that the Kshs.79,809 paid in December 2018 covered notice and leave. The court framed three issues: whether the contract lapsed or was terminated; whether the clearance form signed on 24th December 2018 waived further claims; and entitlement to reliefs. Holding that the Respondent permitted the Claimant to continue working and paying him without a break after expiry, the court found a contract of employment implied from conduct, generating a legitimate expectation of renewal; the verbal notice was therefore a termination which violated Sections 41, 43, 45 and 47(5) of the Employment Act for want of reason and hearing, and was unfair. The clearance form, though voluntarily signed and binding as to existing contractual obligations, did not bar claims for unfair termination as it made no reference to further claims. The court declared the termination unfair and awarded the equivalent of three months' gross salary (Kshs.300,000) under Section 49, declining notice pay, house allowance and leave allowance, with costs and interest to the Claimant.

Key legal issues

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01

Whether the contract lapsed by effluxion of time or was renewed by conduct

Holding

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.

Reasoning

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.

p. 6
02

Whether the termination was unfair

Holding

The verbal notice was an unfair termination; no valid reason was given and the Claimant was not heard.

Reasoning

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.

p. 6
03

Whether the clearance form waived further claims

Holding

The Claimant did not waive the right to pursue further claims, but all claims in respect of final dues were extinguished.

Reasoning

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.

p. 7
04

What remedies are available

Holding

Declaration of unfair termination plus three months' gross salary (Kshs.300,000) under Section 49; notice, house allowance and leave claims declined.

Reasoning

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.

p. 8

Legal principles established

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  • 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

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  1. 1.Declaration that termination of the Claimant's employment was unfair.
  2. 2.Equivalent of three (3) months salary, Kshs.300,000/=.
  3. 3.Costs of the suit to the Claimant.
  4. 4.Interest at court rates from date of judgment till payment in full.

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 41(1)
  • Constitution of Kenya, 2010Article 47(1)
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 48
  • Employment Act, 2007Sections 41, 43, 45, 47(5), 49(1)(c), 49(4)
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (13)

  • Justin Beswick V Local Ocean Conservation (LOC) Kenya Ltd
    (2022) eKLR
  • Caroline Muthoni Njoroge V LVCT Health
    (2019) eKLR
  • Eunice Mwikali Munyao V Elys Chemical Industries Ltd
    (2017) eKLR
  • Sheila Kiplangat V Unilever Kenya Ltd
    (2022) eKLR
  • Walter Ogal Anuro V Teachers Service Commission
    (2013) eKLR
  • Pamela Nelima Lutta V Mumias Sugar
    (2017) eKLR
  • Francis Chire Chachi V Amatsi Water Services Company Ltd
    (2012) eKLR
  • Registered Trustees De La Salle Christian Brothers T/A St. Mary's Secondary School V Julius D. M. Baini
    (2017) eKLR
  • Registered Trustees of the Presbyterian Church of East Africa & another V Ruth Gathoni Ngotho-Kariuki
    (2017) eKLR
  • Transparency International-Kenya V Teresa Carlo Omondi
    (2023) KECA 174
  • Republic V Kenya Revenue Authority Ex parte M-Kopa Kenya Ltd
    (2018) eKLR
  • Coastal Bottlers Ltd V Kimathi Mithika
    (2018) eKLR
  • Trinity Investments Ltd V Lion of Kenya Ins Co. Ltd
    (2015) eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction (Article 162(2) of the Constitution; Employment Act, 2007)

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, "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.