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ELRCPartially AllowedMombasa ELRC Appeal (judgment of 30 April 2025)· [2025] KEELRC 1229 (KLR)

Natures Limited v Makundi (Appeal E216 of 2024) [2025] KEELRC 1229 (KLR)

Employment and Labour Relations Court
30 April 2025
MMM. Mbarũ
1,478 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 a fixed-term contract simply ends on its expiry date, with no redundancy, notice or severance pay owed.

What this practically means

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Executive summary

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This is a first appeal against the judgment of the magistrate's court (Mombasa CMELRC No. E360 of 2022) delivered on 12 September 2024, which had found unfair termination by redundancy and awarded the respondent notice pay, 12 months' compensation, leave pay for 10 years, and severance pay. The respondent claimed he was employed from 2009 in various capacities and terminated on 31 December 2021 on account of redundancy without notice. The appellant maintained he was on a fixed-term contract as a light van driver ending 31 December 2021, which simply expired. Allowing the appeal in part, the court held that a fixed-term contract is lawful and ends on its terms without any obligation to issue notice or reasons, relying on Wambugi v Board of Management Afya Yetu Initiative and Kenya Power and Lighting Company v Osiro. The findings of redundancy, notice pay, severance and compensation were set aside. On leave, the court applied Section 28(4) of the Employment Act, holding leave cannot accumulate beyond 18 months, and quantified leave-related awards. On overtime, the court found only 2 excess hours weekly, assessing Ksh. 11,555.70. The appeal was allowed to the extent that the lower court judgment was reviewed, with awards confirmed for leave pay of Ksh. 11,555.70 and leave days of Ksh. 26,667, and each party ordered to bear its own costs in the appeal and the lower court. The final orders contain internal inconsistencies in labelling and arithmetic.

Key legal issues

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01

Expiry of fixed-term contract versus redundancy

Holding

The claim of redundancy was without merit; employment ended on the expiry of the fixed-term contract on 31 December 2021

Reasoning

The respondent's own contract ran from 2 January 2021 to 31 December 2021. Since the contract ended on its terms and was not renewed, there was no termination by redundancy, and the trial court's findings on notice, severance and compensation were erroneous and set aside.

p. 3
02

Limitation on leave pay claims

Holding

Leave claims for 12/10 years were partly time-barred; leave cannot accumulate beyond 18 months

Reasoning

Section 28(4) bars accumulation of leave beyond 18 months, so only leave accrued under the last contract is recoverable. The court nonetheless quantified leave-related awards based on the basic wage of Ksh. 26,667.

p. 3
03

Overtime claim

Holding

Only 2 extra hours per week were worked beyond the ordinary 48, assessed at Ksh. 11,555.70

Reasoning

The contract provided 50 hours per week (9 hours for 5 days and 5 on Saturday) with a day off each week, satisfying Section 27. The excess over the ordinary 48-hour week was 104 hours, valued at Ksh. 11,555.70 on the monthly wage.

p. 4

Legal principles established

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  • A fixed-term contract starts and ends on its terms and the employer need not issue notice or reasons at its expiry
  • Leave days should not accumulate beyond 18 months under Section 28(4) of the Employment Act

Court orders

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  1. 1.The findings that there was a redundancy and that the appellant should have issued notice, paid severance and compensation are set aside
  2. 2.Judgment in Mombasa CMELRC No. E360 of 2022 is reviewed
  3. 3.Awards confirmed for leave pay Ksh 11,555.70 and leave days Ksh 26,667
  4. 4.Each party to bear its costs for the appeal and the lower court

Authorities

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Legislation

  • Employment ActSection 35(6)
  • Employment ActSection 40
  • Employment ActSection 90 (section 89)
  • Employment ActSection 28 and 28(4)
  • Employment ActSection 27

Cases cited (3)

  • Hassanath Wanjiku v Vanela House of Cofiees
    [2018] eKLR
  • Wambugi v Board of Management Afya Yetu Initiative
    [2024] KECA 1557 (KLR)
  • Kenya Power and Lighting Company v Osiro
    [2024] KECA 854 (KLR)
On appeal from
Magistrates' Court (ELRC), Mombasa
CMELRC No. E360 of 2022
Jurisdiction invoked
First appeal from the subordinate court under the Employment and Labour Relations Court jurisdiction

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, "Natures Limited v Makundi (Appeal E216 of 2024) [2025] KEELRC 1229 (KLR)", Case Analysis (2025). Mombasa ELRC Appeal (judgment of 30 April 2025). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1229/eng@2025-04-30

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