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ELRCPartially AllowedMombasa ELRC Appeal (from CM ELRC No. E659 of 2021)

Riley Falcon Security Services Limited v Watako (Appeal E076 of 2024) [2024] KEELRC 2795 (KLR)

Employment and Labour Relations Court
14 November 2024
2,938 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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Kenya's Employment Court confirmed that ending a fixed-term contract early without due process is unfair termination, and recalculated the guard's award using his gross wage.

What this practically means

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Executive summary

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This is a first appeal against the judgment of the magistrates' court in Mombasa CM ELRC No. E659 of 2021, which found unfair termination and awarded the respondent Ksh.100,000 compensation, unpaid NHIF and costs. The respondent, a security guard, claimed he was employed from 6 April 2015 until 23 October 2020 when his employment was terminated without notice, reasons or terminal dues. The appellant contended he was engaged under distinct annual fixed-term contracts from September 2017, the last running to 30 November 2020, which lapsed naturally without any obligation to renew. On re-assessment of the entire record, the court held employment with the appellant began on 26 September 2017, earlier contracts having been issued by third parties. Section 90 of the Employment Act limited claims to three years from filing (to 20 September 2018) and continuing injuries to 12 months from cessation. The court found the contract expiring 30 November 2020 was prematurely terminated on 23 October 2020 without due process under Sections 41 or 44, the appellant's notices and leave/exit records being after the fact and manipulated. Applying Kenya Ports Authority v Munyao, compensation had to be tabulated on the last gross wage of Ksh.15,385.15 rather than a general award; three months' compensation was awarded. The court recomputed notice pay, overtime for the last 12 months, and service pay under the Protective Security Services Wage Order, while rejecting the leave claim (already compensated) and the NHIF claim (due to the statutory body). The trial judgment was varied accordingly, with costs to the respondent.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the respondent's employment with the appellant began in 2015 or under the contracts from September 2017
  2. 2.Whether the premature termination of the fixed-term contract on 23 October 2020 was unfair
  3. 3.Whether claims were time-barred under Section 90 of the Employment Act
  4. 4.Whether the compensation award of Ksh.100,000 was correctly tabulated and what other claims were due

Key legal issues

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01

Date of commencement of employment with the appellant

Holding

Employment with the appellant began on 26 September 2017; earlier contracts were issued by third parties (Riley Services Limited and Riley Security Limited)

Reasoning

The court examined the contracts produced, noting the 2015 and 2016 contracts were issued by other entities, and concluded the appellant employed the respondent from 26 September 2017, subject to the 3-year limitation window under Section 90.

p. 4
02

Lawfulness of termination before expiry of the fixed-term contract

Holding

The contract ending 30 November 2020 was prematurely terminated on 23 October 2020 without due process, constituting unfair termination; the purported notice dated 22 November 2020 and leave/exits forms were after the fact and manipulated

Reasoning

The court found no record of the respondent serving past 23 October 2020, and documents suggesting leave into December 2020 were inconsistent with a contract lapsing on 30 November 2020, indicating records manipulated to fit the appellant's purpose.

p. 5
03

Limitation under Section 90

Holding

Claims could only go back 3 years from filing on 23 September 2021 (to 20 September 2018), and continuing injuries (overtime) only 12 months from cessation

Reasoning

The court applied Section 90 to confine claims to the limitation periods, holding the trial court should have addressed each claim through this lens, and applied the continuing-injury doctrine to the overtime claim for the last 12 months only.

p. 4
04

Basis of compensation and other dues

Holding

Compensation should be tabulated on the last gross wage of Ksh.15,385.15; 3 months' compensation awarded; notice pay, overtime and service pay recomputed

Reasoning

Relying on the Supreme Court in Kenya Ports Authority v Munyao, the court held compensation under Section 49 must be based on gross wage with reasons given. It awarded 3 months' compensation, notice pay, overtime at Ksh.64.10 per hour for the last 12 months, and service pay under the Protective Security Services Wage Order.

p. 5

Legal principles established

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  • A fixed-term contract ends on its own terms without obligation on the employer to justify non-renewal, but premature termination before expiry requires due process under Sections 41 or 44 of the Employment Act
  • Compensation for unfair termination must be tabulated on the last gross wage under Section 49 of the Employment Act and is distinct from general damages
  • Continuing injuries such as overtime must be claimed within 12 months of cessation of the injury under Section 90 of the Employment Act

Court orders

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  1. 1.A finding that employment was terminated unfairly
  2. 2.Compensation of Ksh.46,155.45 (3 months' gross wage)
  3. 3.Notice pay of Ksh.15,385.15
  4. 4.Overtime of Ksh.100,002.50
  5. 5.Service pay of Ksh.23,077.69
  6. 6.Costs as awarded by the lower court and costs of the appeal awarded to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

On appeal from
Chief Magistrate's Court (ELRC), Mombasa
CM ELRC No. E659 of 2021
Jurisdiction invoked
First appeal from the magistrates' court under the Employment and Labour Relations Act

Relief refused

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Set aside of the trial judgment and dismissal of the claim with costs

The appeal partially succeeded; the trial judgment was varied, with fresh awards made in the respondent's favour

p. 6

Claim for unpaid leave for 5 years

Leave pay had already been allocated in the December 2020 payment statement at one month's gross wage, and accrued leave is limited to 18 months under Section 28(4)

p. 6

Claim for unpaid NHIF

NHIF dues are payable to the statutory body, not the employee

p. 6

Costs

Costs as awarded by the lower court and costs of the appeal awarded to the respondent

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Accordingly, the judgment of the trial court is hereby reviewed with the following awards;
p. 6Disposition
a. Employment terminated unfairly; b. Compensation ksh.46,155.45; c. Notice pay ksh.15,385.15; d. Overtime 100,002.50 e. Service pay ksh.23,077.69;
p. 6Final orders
To terminate employment without the due process of Section 41 or 44 of the Employment Act is unlawful. There is no justification for the appellant's termination of employment before the due date of 30 November 2020.
p. 5Unfair termination of fixed-term contract
Records are manipulated to fit the purpose.
p. 5Employer's records
Compensation is based on Section 49 of the Employment Act based on the gross wage while general damages only arise from breach and violation of the constitution or the law.
p. 5Compensation vs general damages
Continuing injury and damage should be addressed within 12 months from the date of cessation.
p. 6Limitation - continuing injuries

Issues in the judgment

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minor

The judgment inconsistently dates the notice ending the contract as 22 November 2020 and as 20 November/20 December 2020, and records the respondent as both 'appellant' and 'respondent' in paragraph 3

minor

The letter of non-renewal is variously dated 20 November 2020, 22 November 2020 and 20 December 2020 within the judgment

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, "Riley Falcon Security Services Limited v Watako (Appeal E076 of 2024) [2024] KEELRC 2795 (KLR)", Case Analysis (2024). Mombasa ELRC Appeal (from CM ELRC No. E659 of 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2795/eng@2024-11-14

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