Nambwaya v Egerton University (Cause E003 of 2022) [2024] KEELRC 994 (KLR)
The bottom line
#A Kenyan court ruled a fixed-term contract ends naturally when it expires, but employers must give reasonable notice before refusing to renew it.
What this practically means
#Executive summary
#Key legal issues
#Legitimate expectation of renewal of fixed-term contract
The claimant failed to establish a reasonable or genuine basis for legitimate expectation of renewal; renewal was by mutual consent and never automatic, and the supervisor's recommendation was not binding on the respondent.
The court applied the factors in John Nduba v AMREF: no pre-conditions for renewal were set, renewals were unilateral, and no promise or undertaking was made. The supervisor's recommendation was confidential, not an official communication, and not binding. Eight consecutive renewals alone did not create a legitimate expectation where the contract itself made renewal dependent on mutual consent and application.
Whether non-renewal amounted to unfair termination
No termination occurred; the contract ended by effluxion of time, so there was no unfair termination within Sections 43 and 45 of the Employment Act.
The last contract ran to 7th November 2021 and provided for termination before expiry by one month's notice or pay in lieu. The respondent simply declined renewal, so the relationship ended by effluxion of time, not termination. The only fault was the late communication of the non-renewal decision, remedied through an award of one month's pay rather than a finding of unfair termination.
Late communication of decision not to renew
Communicating the non-renewal only two days before expiry, despite receiving the renewal request on 24th September 2021, was unfair and prejudicial; the respondent was to give one month's notice or pay in lieu.
The court held that just as the employee had to apply a month in advance for renewal, the employer ought in fairness and equity to give reasonable notice of non-renewal. The claimant served for eight continuous years and took over six months to find another job, so the late notice caused real prejudice deserving of the notice-pay relief.
Employer's duty to keep and produce employment records
Failure by the respondent to produce leave records and CBA payment records meant the claimant's claims on annual leave and CBA arrears were allowed as prayed.
Under Sections 10 and 74 of the Employment Act the employer bears the duty to keep employment records and produce them to rebut the employee's allegations. The respondent did not avail leave records, and as custodian of records failed to support its lower computation of CBA arrears, so the claimant's figures were accepted in both heads.
Certificate of service and clearance conditions
The respondent was directed to issue a certificate of service within 30 days, and compliance with the judgment was not to be conditional on any clearance.
Section 51(1) of the Employment Act obliges an employer to issue a certificate of service on termination of employment. The court found the alleged non-clearance vague and ambiguous and held that any clearance should have been done before the contract ended on 7th November 2021; withholding dues pending unclear clearance was condemned as unprofessional misconduct.
Legal principles established
#- Lapse of a fixed-term contract through effluxion of time does not amount to termination or breach of the contract by either party, and there is no obligation on an employer to renew or give reasons for non-renewal.
- Although an employer need not renew a fixed-term contract, fairness and good labour practice require it to communicate a decision not to renew in reasonable time, failing which one month's notice or pay in lieu may be awarded to ameliorate the prejudice.
- PAYE deducted by an employer becomes the property of KRA and is not payable to the employee, who should report non-remittance to KRA for collection and recovery including penalties.
Court orders
#- 1.A declaration that the contract of employment terminated through effluxion of time and the claimant was neither unfairly nor unlawfully or otherwise terminated
- 2.Award of Kshs.539,907/= to the claimant comprising pay in lieu of notice (Kshs.84,938/=), 18 days annual leave (Kshs.42,469/=), 2 years' gratuity (Kshs.245,000/=), CBA arrears (Kshs.150,000/=) and unpaid per diem (Kshs.17,500/=)
- 3.Interest on the awarded amount at court rates from the date of judgment till payment in full
- 4.The respondent shall issue and deliver a certificate of service to the claimant within 30 days of the judgment
- 5.Costs of the cause to the claimant
- 6.Compliance with the orders shall not be subject to any clearance or other conditions from the respondent
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution and the Employment Act (employment cause; specific provision not quoted in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nambwaya v Egerton University (Cause E003 of 2022) [2024] KEELRC 994 (KLR)", Case Analysis (2024). Cause No E003 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/994/eng@2024-04-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.