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ELRCPartially AllowedNot stated in judgment· [2024] KEELRC 1759 (KLR)

Njunge v Wilfreight Express Cargo Ltd (Employment and Labour Relations Cause 1044 of 2017) [2024] KEELRC 1759 (KLR)

Employment and Labour Relations Court
28 June 2024
3,401 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court ruled that a fixed-term contract ending on its own is not unfair termination, but the employee still won unpaid house allowance.

What this practically means

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Executive summary

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The Claimant, employed as a Human Resource Assistant from 12th March 2015, claimed that her employment was verbally and unfairly terminated on 20th March 2017 without reasons, a show-cause letter or disciplinary hearing. She sought a declaration of unfair termination, terminal dues of Kshs. 1,307,288/-, salary for March 2017, house allowance, overtime pay, a certificate of service and interest. The Respondent denied the claim, asserting the contract ended by effluxion of time under a two-year fixed-term contract, and counterclaimed Kshs. 135,000/- as an outstanding loan balance. The court framed three issues: the nature of the employment, whether termination was unfair, and entitlement to remedies. Relying on the Claimant's own email correspondence acknowledging a two-year contract ending 12th March 2017, the court found that although the written contract could not be traced, the parties mutually operated under a fixed-term contract which expired by effluxion of time. The unfair termination claim therefore failed, taking with it compensatory damages and notice pay. The court nevertheless awarded independent reliefs: house allowance at 15% of basic salary (Kshs. 252,000/- for 24 months) under Section 31 of the Employment Act and Regulation 4 of the Regulation of Wages (General) Order 1982, less the admitted loan of Kshs. 135,000/-, netting Kshs. 117,000/-, plus interest. A certificate of service under Section 51 was ordered. The overtime claim was denied as she worked below normal weekly hours, and the Respondent's counterclaim was allowed by way of offset. Each party was to bear their own costs. Judgment was delivered on 28th June 2024 by Ocharo Kebira, J.

Key legal issues

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01

Nature of employment at separation

Holding

After the initial two-month contract lapsed, the Claimant served under a fixed-term contract of two years ending 12th March 2017, inferred from email correspondence despite the written contract being untraceable.

Reasoning

The court examined the Claimant's emails of 14th and 20th March 2017, in which she acknowledged the contract was two years with an end date of 12th March 2017 and indicated openness to renewal. Although the written two-year contract could not be produced, the court found the parties' conduct and correspondence demonstrated consensus on a fixed-term arrangement.

p. 6
02

Unfair termination

Holding

The claim failed because the contract ended by effluxion of time, not termination.

Reasoning

Having found a fixed-term contract that expired on its own terms, the court held that claims for wrongful dismissal or unfair termination are unsustainable, and the statutory protections of procedural fairness under Section 41 and substantive justification under Section 43 cannot be invoked.

p. 6
03

House allowance

Holding

The Claimant was entitled to house allowance at 15% of basic salary for 24 months, as the appointment letter did not provide for a consolidated salary and the Respondent led no evidence of payment.

Reasoning

Section 31 of the Employment Act obliges the employer to provide accommodation or a reasonable house allowance. The letter of appointment did not state the salary was consolidated, and the Respondent produced no documentary evidence that house allowance was included. Regulation 4 of the Regulation of Wages (General) Order 1982 supplied the 15% formula applied.

p. 6
04

Counterclaim for outstanding loan

Holding

The Respondent's counterclaim for Kshs. 135,000/- succeeded, the debt being admitted, and was offset against the award.

Reasoning

The Claimant admitted during testimony that she owed Kshs. 135,000/- of a loan advanced for a medical emergency during maternity leave. The court allowed the counterclaim and directed that the amount be offset from the award to the Claimant.

p. 7

Legal principles established

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  • Where a contract of service terminates by effluxion of time, a claim for wrongful dismissal or unfair termination cannot be sustained and statutory procedural fairness and substantive justification do not arise.
  • Where an employer does not provide accommodation and the contract does not state that salary is consolidated, the employer must pay house allowance at 15% of basic wage under Regulation 4 of the Regulation of Wages (General) Order 1982.

Court orders

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  1. 1.The Claimant be paid house allowance of Kshs. 252,000/- less Kshs. 135,000/- outstanding loan, total Kshs. 117,000/-
  2. 2.The Claimant be issued with a Certificate of Service within 30 days of the Judgment
  3. 3.Interest on the monetary award at Court rates from the date of judgment until payment in full
  4. 4.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSections 31, 35(1)(c), 41, 43(1), 49(1)(c), 51
  • Regulation of Wages (General) OrderRegulations 4, 5(1), 6(1)
  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticles 159(2)(d), 48
  • Civil Procedure ActSection 1B

Cases cited (5)

  • Fredrick Odongo Owegi v CFC Life Assurance Limited
    [2014] eKLR
  • Milkah Khakayi Kulati v Sandstorm (Africa) Limited
    [2014] eKLR
  • Abigael Jepkosgei Yator & Another v China Hanan International Co. Ltd
    [2018] eKLR
  • Registered Trustees of Presbyterian Church of East Africa v Ruth Gathomi Ngotho
    [2017] eKLR
  • Stephen M. Kitheka v Kevita International Limited
    [2018] eKLR
Jurisdiction invoked
First-instance claim under the 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, "Njunge v Wilfreight Express Cargo Ltd (Employment and Labour Relations Cause 1044 of 2017) [2024] KEELRC 1759 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1759/eng@2024-06-28

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