Riley Falcon Security v Lumbete (Appeal E006 of 2023) [2024] KEELRC 1793 (KLR)
The bottom line
#Kenya's Employment Court confirmed that repeatedly renewing a fixed-term contract for seven years creates an expectation of renewal, so letting it lapse without notice is unfair termination.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Respondent was unfairly terminated or whether his contract lapsed by effluxion of time
- 2.Whether the Respondent is entitled to the awards by the Trial Court
Key legal issues
#Whether the Respondent was unfairly terminated or whether his contract lapsed by effluxion of time
Seven years of repeated renewals created a legitimate expectation of renewal; letting the contract lapse without notice of non-renewal amounted to unfair termination.
The court noted the Respondent's contract had been renewed repeatedly over seven years, and the Respondent even applied for renewal. The employer nonetheless subjected him to a disciplinary hearing after the contract had allegedly lapsed, undermining the effluxion-of-time argument. Relying on legitimate expectation principles, the court held the failure to renew without notice constituted unfair termination and upheld the trial court's finding.
Whether the Respondent is entitled to the awards by the Trial Court
The awards of one month's salary in lieu of notice and six months' salary as damages were upheld, but computed on the correct monthly salary of Kshs. 15,000 rather than Kshs. 16,000.
Having found unfair termination, the court saw no reason to disturb discretionary awards. It corrected the salary figure used by the trial court from Kshs. 16,000 to Kshs. 15,000, resulting in one month's notice pay of Kshs. 15,000 and six months' damages of Kshs. 90,000.
Legal principles established
#- The general rule is that a fixed term contract carries no expectation for renewal, but repeated renewals may create a legitimate expectation of renewal, and failure to renew amounts to unfair termination
- To let a contract lapse by effluxion of time after repeated renewals and without notice of non-renewal amounts to unfair termination
Court orders
#- 1.Appeal dismissed; finding of unfair termination upheld
- 2.Trial Court's award of one-month salary in lieu of notice upheld at Kshs. 15,000
- 3.Trial Court's award of 6 months' salary as damages for unfair termination upheld at Kshs. 90,000 (corrected from Kshs. 16,000 to Kshs. 15,000 monthly salary basis)
- 4.Appellant to bear the costs of the appeal and the costs of the suit before the lower court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Trial Court (Magistrates' Court)
- Not stated
- Jurisdiction invoked
- First appeal to the Employment and Labour Relations Court against the judgment of the trial court (statutory appellate jurisdiction not expressly cited in the judgment)
Relief refused
#Setting aside of the trial court's judgment and dismissal of the suit with costs to the Appellant
The court found the Respondent was unfairly terminated given seven years of repeated contract renewals creating legitimate expectation, so no reason to interfere with the trial court's findings and awards
Costs
The Appellant will bear the costs of the appeal and the costs of the suit before the lower court.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The general rule is that a fixed term contract carries no expectation for renewal. It is however settled that a fixed term may create expectancy of renewal on the part of the employee based on previous contract renewals. Where an employer creates a legitimate expectation and fails to renew the contract, the law deems the employee to have been Unfairly terminated.
In the premise, I uphold the Trial Court’s award of one-month salary in lieu of notice at Kshs. 15000and 6-months’ salary in damages for the unfair termination at Kshs.90,000.
The Appellant will bear the costs of the appeal and the costs of the suit before the lower court.
Issues in the judgment
#Date of contract lapse appears inconsistently stated as 2019 in one passage and January 20, 2020 elsewhere
Typographical errors including 'efiuxion' for 'effluxion' and missing spacing in award figures
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Riley Falcon Security v Lumbete (Appeal E006 of 2023) [2024] KEELRC 1793 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1793/eng@2024-07-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.