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ELRCPartially AllowedNairobi ELRC Cause No. E365 of 2021 (with Cause No. E366 of 2021 and Cause No. E375 of 2021), consolidated for hearing· [2024] KEELRC 108 (KLR)

Ngetich & 2 others v Kenya Water Institute & 4 others (Cause E365, E366 & E375 of 2021 (Consolidated)) [2024] KEELRC 108 (KLR)

Employment and Labour Relations Court
26 January 2024
4,648 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that revoking fixed-term contracts before expiry was unlawful, awarding three Kenya Water Institute employees six months' salary each.

What this practically means

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Executive summary

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Three separate causes by former employees of the Kenya Water Institute - David Kimutai Ngetich, Silas Omolloh Olang'o and Paul Nguku Muthama - were heard together (but not consolidated) against common respondents. Each claimant was employed on renewable fixed term contracts that were renewed or extended severally. By letters dated 10th February 2021, the 1st Respondent revoked their recently extended six-month contracts following a directive from the Cabinet Secretary, Ministry of Water, Sanitation and Irrigation. The claimants sought declarations that the revocation was unlawful, reinstatement and costs. The respondents contended the contracts had lapsed and the revocation was per contractual terms. The court framed two issues: the lawfulness of the revocation and entitlement to reliefs. It held that the claimants, having signed renewable fixed term contracts that bound both parties, had a legitimate expectation their last contracts would run their course. The revocation before expiry or substantive recruitment breached the contracts, which contained no revocation clause, and breached the Employment Act. Further, the Cabinet Secretary, on whose instructions the revocation was made, had no authority to recruit or terminate, that power vesting in the Governing Council. The court declared the revocations unlawful and unfair. Reinstatement was refused as the contract terms had lapsed and the statutory three-year window had expired. The court awarded each claimant compensation equivalent to six months' gross salary under section 49 of the Employment Act, one month's salary in lieu of notice, outstanding gratuity and terminal benefits, with interest from judgment. The 1st Respondent was ordered to bear the claimants' costs.

Key legal issues

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01

Whether the revocation of the Claimants' contracts was lawful

Holding

The revocation was unlawful and unfair - it was in breach of the contract terms, breached the Employment Act, and was effected on the instructions of the 4th Respondent who had no authority to recruit or terminate the contracts

Reasoning

The Claimants were employed on renewable fixed term contracts which they voluntarily signed and which bound both parties. The last contracts were extended for 6 months terminable upon expiry or upon substantive recruitment of position holders, whichever came first. Revoking them before either event occurred breached the contracts, which contained no provision for revocation and specified the mode of termination. Further, the Cabinet Secretary had no authority over recruitment or termination, that power vesting in the Governing Council. The Claimants had a legitimate expectation that their contracts would run their course.

p. 10
02

Whether the Claimants were entitled to the reliefs sought

Holding

Reinstatement refused; compensation of 6 months' gross salary awarded together with one month's salary in lieu of notice, outstanding gratuity and terminal benefits

Reasoning

Reinstatement was impossible because the contract terms had lapsed and the statutory three-year window had expired. Since reinstatement was not possible, section 49 of the Employment Act permitted compensation. Considering the length of service, the repeated renewals and extensions, the Respondents' conduct and the Claimants' legitimate expectation, 6 months' gross salary was reasonable. Terminal dues were awarded under the contracts.

p. 10

Legal principles established

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  • Once a fixed term contract is at an end, the employer has no obligation to justify termination beyond the lapse of the fixed period
  • A fixed term contract logically ends automatically at its end date unless terminated
  • A contract accepted becomes legally binding and can only be withdrawn or varied by consent or in accordance with the contract

Court orders

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  1. 1.Declaration that the revocation of the contracts of the Claimants was unlawful and unfair
  2. 2.Compensation to each Claimant equivalent to 6 months gross monthly salary under section 49 of the Employment Act
  3. 3.Parties to tabulate and exchange computation of the compensation, failing which either party may approach the court
  4. 4.Respondents to pay each Claimant one month's salary in lieu of notice, any outstanding gratuity and other terminal benefits under their terms of service
  5. 5.1st Respondent to bear the costs of the Claimants
  6. 6.Interest to accrue from date of judgment

Authorities

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Legislation

  • Employment Actsections 41 and 43
  • Employment Actsection 49
  • Employment and Labour Relations Actreinstatement within 3 years
  • Kenya Water Institute Actsection 9

Cases cited (11)

  • John Njoroge Michuki v Kenya Shell Ltd
    Civil Appeal No. 227 of 1999
  • Wallis v Smith
    (1882) 21 Ch. D 243
  • Keith Wright vs Kentegra Biotechnology (EPZ) Ltd
    [2021] eKLR
  • Keen Kleeners Limited v Kenya Plantation and Agricultural Workers' Union
    (Civil Appeal 101 of 2019) [2021] KECA 352 (KLR) (17 December 2021)
  • Bernard Wanjohi Muriuki v Kirinyaga Water and Sanitation Company Limited & Another
    [2012] eKLR
  • National Bank of Kenya v Samuel Nguru Mutonya
    Civil Appeal No. 118 of 2017, eKLR
  • Kenfreight (EA) Limited v Benson K. Nguti
    Civil Appeal No. 31 of 2015 [2016] eKLR
  • Magunga General Stores v Pepco Distributors Limited
    [1987] 2 KAR 89
  • Mary Chemweno Kiptui v Kenya Pipeline Company
    Civil Appeal No. 178 of 2002
  • Kiai Mbaki & 2 Others v Gichuhi Macharia & Another
    [2005] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Act (ELRC jurisdiction over employment disputes)

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, "Ngetich & 2 others v Kenya Water Institute & 4 others (Cause E365, E366 & E375 of 2021 (Consolidated)) [2024] KEELRC 108 (KLR)", Case Analysis (2024). Nairobi ELRC Cause No. E365 of 2021 (with Cause No. E366 of 2021 and Cause No. E375 of 2021), consolidated for hearing. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/108/eng@2024-01-26

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