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ELRCPartially AllowedMalindi ELRC Appeal (from Malindi CMELRC No. 67 of 2019)· [2024] KEELRC 1493 (KLR)

Temple Point Resort Limited v Omar (Suing on his behalf and on behalf of 10 others who are the former employees of Temple Point Resort Limited t/a Temple Point Resort) (Appeal E028 of 2023) [2024] KEELRC 1493 (KLR)

Employment and Labour Relations Court
26 April 2024
6,021 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 letting fixed-term contracts lapse is not unfair termination, so the resort owed the 11 former workers nothing.

What this practically means

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Executive summary

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This is a first appeal against the judgment of the Malindi CMELRC in Cause No. 67 of 2019 delivered on 29 November 2023, in which 11 former employees of Temple Point Resort Limited claimed Ksh.2,142,147 in notice pay, service pay, 12 months' compensation and underpayment following non-renewal of their fixed-term contracts on 30 April 2019. The trial court allowed the claims, awarding one month's notice pay and 12 months' salary as compensation. On appeal, the court re-evaluated the evidence as required on a first appeal. It found each respondent had signed successive 3-month written fixed-term contracts ending 30 April 2019, and that fixed-term contracts are lawful under Section 10(3)(c) of the Employment Act; non-renewal on lapse requires neither notice nor reasons and creates no legitimate expectation of renewal, following Transparency International-Kenya v Teresa Carlo Omondi. The trial court's award of maximum 12 months' compensation was made without assigning reasons, contrary to Leonard Gethoi Kamweti v National Bank of Kenya. Judgment for Sang and Mumbo, who did not testify, was found improper as their claims should have been assessed on the merits. Claims pre-dating 20 June 2016 were time-barred under Section 90. The court also found no underpayment when wages were compared against the applicable Wage Orders, and no service pay was due since NSSF and NHIF dues were remitted. The appeal was allowed, the trial judgment set aside, with each party bearing its own costs.

Key legal issues

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01

Whether non-renewal of fixed-term contracts amounted to unfair termination

Holding

Non-renewal of fixed-term contracts on lapse is lawful; no notice or reasons required; compensation does not accrue

Reasoning

The court found each respondent signed successive 3-month written fixed-term contracts, the last ending 30 April 2019. Fixed-term contracts are lawful under Section 10(3)(c) of the Employment Act; the end date is infused in the contract, so non-renewal is not termination requiring notice or reasons. Following Transparency International-Kenya v Teresa Carlo Omondi, fixed-term contracts create no legitimate expectation of renewal. The maximum 12 months' compensation was also awarded without reasons.

p. 11
02

Whether judgment could be entered for Sang and Mumbo who did not testify

Holding

The trial court erred; their claims should have been assessed on the merits rather than allowed by consent

Reasoning

Under Rule 9 of the ELRC Procedure Rules a representative suit is permissible, but the trial court ought to have assessed each claim on its merits. Since the claims of Sang and Mumbo were allowed by consent per the order of 4 October 2023, the court found the trial court should have analysed the responses and records with a finding instead.

p. 9
03

Whether the appellant was liable for employment before 2016 and for underpayment

Holding

No; records showed prior employment under different entities with redundancy payments, and wages paid exceeded the applicable minimum wage

Reasoning

The appellant was incorporated on 13 October 2010 and only took over management in 2016. Certificates of Service record continuous service, but the court held certificates and contracts serve different purposes and are not contradictory. On wages, the court compared salaries against the Regulation of Wages (General) (Amendment) Orders and found no underpayment for Abdul Omar (mechanic) and Benson Kenga (mason), there being no proof of graded artisan status.

p. 10
04

Whether claims pre-dating 20 June 2016 were time-barred

Holding

Yes; only claims from 20 June 2016 onwards were actionable under Section 90 of the Employment Act

Reasoning

The claims were filed on 21 June 2019, and Section 90 imposes a three-year limitation period. Claims arising from contracts ending 30 April 2019 could therefore only reach back to 20 June 2016; any claims alleged to have accrued on or before that cut-off date are time-barred.

p. 12

Legal principles established

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  • Fixed-term contracts are a lawful and legitimate mode of employment; an employer need not give notice or reasons for non-renewal upon lapse of the term
  • Maximum compensation of 12 months can only be awarded where the court assigns reasons and evaluates the effect of the award
  • Employment claims arising from each contract must be filed within three years under Section 90 of the Employment Act

Court orders

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  1. 1.The appeal is allowed
  2. 2.Judgment in Malindi CMELRC No. 67 of 2019 is set aside
  3. 3.Each party bears its own costs

Authorities

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Legislation

  • Employment ActSections 7, 8, 9, 10, 10(3)(c), 10(6), 10(7), 18, 41, 43, 45, 47(5), 49(4), 50, 51, 51(2), 51(4), 90
  • Labour Institutions Act, 2007Section 63(2); Regulation of Wages (Hotel and Catering Trades Wages Council Establishment) Order Rule 18
  • Regulation of Wages (General) (Amendment) Order 2015minimum wage provisions
  • Civil Procedure ActSection 78
  • Employment and Labour Relations Court (Procedure) Rules, 2016Rules 9, 23, 24, 25(3)

Cases cited (17)

  • Samuel Chacha Mwita v Kenya Medical Research Institute
    [2014] eKLR
  • Transparency International (Kenya) v Teresa Carlo Omondi
    Civil Appeal No.81 of 2018
  • Margaret A. Achieng v National Water Conservation & Pipeline Corporation
    [2014] eKLR
  • Krystalinne Salt Limited v Kwekwe Mwakele & 67 others
    [2017] eKLR
  • Reef Hotel Limited v Josephine Chivatsi
    [2021] eKLR
  • Apex Steel Limited v Dominic Mutua Muendo
    [2020] eKLR
  • Peter Otabong Ekisa v County Government of Busia
    [2017] eKLR
  • KUDHEIHA Workers v Wild Waters Entertainment Park
    [2016] eKLR
  • Issa Shekue Shali v Buscar Limited
    [2018] eKLR
  • Robert M Mwachengo v Salama Beach Hotel t/a Temple Point Resort Ltd
    [2018] eKLR
  • Moses Mwatemo v Salama Beach Hotel Limited; NCBA Bank (K) PLC (Formerly NIC Bank & Another (Garnishee); Temple Point Resort Limited (Objections)
    [2021] eKLR
  • Peters v Sunday Post Limited
    (1968) EA 123
  • Bernard Wanjohi Muriuki v Water & Sanitation Company Ltd & Another
    Cause No.1541 of 2010
  • Communications Commission of Kenya & 5 Others v Royal Media Services & 5 Others
    Petition No. 14 of 2014
  • Margaret A. Ochieng' v National Water Conservation and Pipeline Corporation
    [2014] eKLR
  • Leonard Gethoi Kamweti v National Bank of Kenya Limited
    [2020] eKLR
  • United States International University v Eric Rading Outa
    [2016] eKLR
On appeal from
Malindi Chief Magistrate's Court (ELRC)
CMELRC No. 67 of 2019
Jurisdiction invoked
First appeal under section 78 of the Civil Procedure Act

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, "Temple Point Resort Limited v Omar (Suing on his behalf and on behalf of 10 others who are the former employees of Temple Point Resort Limited t/a Temple Point Resort) (Appeal E028 of 2023) [2024] KEELRC 1493 (KLR)", Case Analysis (2024). Malindi ELRC Appeal (from Malindi CMELRC No. 67 of 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1493/eng@2024-04-26

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