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ELRCPartially AllowedMemorandum of Appeal dated 31st October 2022· [2025] KEELRC 1356 (KLR)

Rugendo v Choice Surveillance Limited (Appeal E204 of 2022) [2025] KEELRC 1356 (KLR)

Employment and Labour Relations Court
5 May 2025
4,393 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 ruled that letting an employee keep working after a fixed contract expired extends the employment, requiring severance pay on termination.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court against part of the judgment of Honourable Magistrate Grace A. Omodho delivered on 31st October 2022, in which the Appellant's employment claim was dismissed and she was awarded only a certificate of service. The Appellant, employed as an accounts assistant on a one-year fixed term contract from 1st January 2020, worked past its expiry until terminated on 24th February 2021 on grounds of financial constraint due to the Covid-19 pandemic. The Appellant contended her contract was constructively renewed, that the termination was a premeditated redundancy lacking compliance with section 40 of the Employment Act, and that she was discriminated against on account of her pregnancy. The Respondent maintained the contract had expired, carried no expectation of renewal, and that the termination followed due procedure. Disposed of by written submissions, the Court distilled four issues. On the first, the Court held that the Respondent's conduct - continued payment of salary, no objection to continued work and no prior notice of non-renewal - created a legitimate expectation of renewal, so the contract continued until the purported termination. On the second, the Court found the reason for termination valid but akin to redundancy, and that severance pay under section 40 had not been offered, awarding 15 days' pay, Kshs. 30,000/-. On the third, the Court agreed with the trial court that discrimination on account of pregnancy was not specifically pleaded. The appeal was partially successful, and each party was ordered to bear their own costs.

Key legal issues

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01

Constructive renewal of a fixed term contract

Holding

The Respondent's conduct created a legitimate expectation of renewal, so the contract continued past its expiry date until the purported termination on 24th February 2021.

Reasoning

The Appellant had been engaged from February 2019 on a separate contract. Although fixed term contracts carry no automatic expectation of renewal, the Respondent continued paying salary, never objected to continued work and gave no notice of non-renewal before expiry. Applying Rika J.'s criteria in Teresa Carlo Omondi, this conduct amounted to legally protected legitimate expectation, so the trial court erred in holding there was no existing contract.

p. 7
02

Lawfulness of the termination

Holding

The termination for financial reasons was akin to redundancy; the reason was valid and justifiable but the Respondent failed to pay severance pay as required under section 40 of the Employment Act.

Reasoning

The termination letter cited Covid-19 and inability to sustain salary. The Court took judicial notice of job losses during the pandemic and found the reason valid. The Respondent notified the employee at a physical meeting and the labour office, and offered February salary, notice pay and leave pay, but made no offer of severance pay. An employee who worked only one year is entitled to 15 days' pay as severance.

p. 8
03

Discrimination on account of pregnancy

Holding

The discrimination ground failed because it was not specifically pleaded and the Appellant never notified the Respondent of her pregnancy.

Reasoning

A constitutional violation such as discrimination must be pleaded with precision per Mumo Matemu v Trusted Society of Human Rights Alliance. The Appellant admitted she never notified the Respondent of her pregnancy and could not rely on visibility alone, so the trial court's finding that discrimination was not proved was upheld.

p. 8
04

Reliefs

Holding

The Appellant was awarded only severance pay of Kshs. 30,000/- in addition to the terminal dues already offered by the Respondent.

Reasoning

The Court found the reasons for termination justifiable, so unfair termination reliefs did not arise; the only shortfall under section 40 was severance pay. The appeal was partially successful.

p. 8

Legal principles established

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  • Fixed term contracts are not renewed automatically and carry no legitimate expectation of renewal, save where an expectancy of renewal is created based on previous renewals.
  • Where an employer allows an employee to continue working past the expiry of a fixed term contract, never objects to the continuation of work and never notifies an intention not to renew before expiry, the employee acquires a legitimate expectation of continued employment.
  • The burden of proof in legitimate expectation claims rests on the employee, who must demonstrate a clear, unambiguous representation induced by a decision-maker with authority to renew.
  • Termination of employment on account of inability to pay, akin to redundancy, engages the requirements of section 40 of the Employment Act including severance pay.
  • An employee who has worked for one year is entitled to 15 days' pay as severance pay.

Court orders

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  1. 1.The Court found that the Appellant's contract of employment continued after the expiry of the fixed term until 24th February 2021 when it was purportedly terminated; that ground of appeal succeeds
  2. 2.The Respondent to pay the Appellant severance pay of 15 days at Kshs. 30,000/- in addition to the terminal dues offered in the termination letter dated 24th February 2021
  3. 3.The discrimination ground of appeal fails
  4. 4.Each party to bear their own costs
On appeal from
Magistrates' Court (trial court)
not stated
Jurisdiction invoked
First appellate jurisdiction of the Employment and Labour Relations Court over an appeal from the trial magistrate's judgment in an employment claim

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, "Rugendo v Choice Surveillance Limited (Appeal E204 of 2022) [2025] KEELRC 1356 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 31st October 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1356/eng@2025-05-05

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