Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No 259 of 2017· [2025] KEELRC 1389 (KLR)

Changalwa v Unga Limited (Cause 259 of 2017) [2025] KEELRC 1389 (KLR)

Employment and Labour Relations Court
9 May 2025
3,610 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

#

Kenya's Employment Court ruled that repeatedly renewing a fixed-term contract for 13 years creates a right to renewal or advance notice, making sudden non-renewal unfair termination.

What this practically means

#

Executive summary

#
The Claimant, employed as a casual from 3rd April 2004 and thereafter on successive one-year fixed-term contracts from 2006 as a Mechanical Fitter, sued the Respondent for unfair termination after the Respondent failed to renew his final contract running from 1st July 2016 to 30th June 2017, his last working day being 4th July 2017. He sought a declaration of unfair termination and Kshs. 2,337,492.14 comprising pay in lieu of notice, travelling allowance, house allowance, severance pay, off days and compensation. The Respondent maintained that the contract lapsed by effluxion of time under clause 11 and that renewal was at its discretion. The court framed three issues: legitimate expectation, fairness of termination, and entitlement to reliefs. It found that the Respondent's admission that the contracts 'accrued continuous service', its practice of annual renewals over more than 13 years, its failure to produce employment records, and the Claimant's enrolment in a gratuity scheme reserved for permanent staff gave rise to a legitimate expectation of renewal or at least notice of non-renewal. Non-renewal without notice breached that expectation and, given the discriminatory differential treatment, amounted to unfair termination under section 45 of the Employment Act. The court declared the termination unfair, awarded one month's pay in lieu of notice (Kshs. 38,239.11), 8 off days (Kshs. 11,765.88) and maximum compensation (Kshs. 458,869.32), declined travelling allowance and severance pay, awarded costs to the Claimant and interest at court rates.

Key legal issues

#
01

Whether the Claimant had legitimate expectation of renewal of his fixed-term contract

Holding

Yes - the Claimant had legitimate expectation of renewal based on over 13 years of continuous one-year renewals and enrolment in the permanent-staff gratuity scheme

Reasoning

The Respondent admitted in its Response that the Claimant's employment accrued continuous service through successive one-year contracts from 2006. The Claimant worked as a casual from 2004 then on unbroken annual contracts until July 2017. The Respondent produced none of the earlier contracts despite being under a duty to keep employment records, and no evidence showed renewal ever required application. The contract dated 24th June 2016 was signed on 14th July 2016, after the term began, showing renewal followed continued work. A reasonable person would expect renewal or advance notice of non-renewal.

p. 6
02

Whether the non-renewal of the contract amounted to unfair termination

Holding

Yes - non-renewal without notice amounted to unfair termination, aggravated by discriminatory exclusion from permanent staff treatment despite gratuity scheme membership

Reasoning

Having acquired a legally protected right through legitimate expectation, the Claimant was entitled to renewal or termination in the manner provided by the contract or law. Clause 11 permitted termination by one month's notice or pay in lieu. The Claimant's enrolment in the gratuity scheme reserved for permanent staff entitled him to equal treatment; failure amounted to discrimination and unfair labour practice. Applying section 45(4) and (5) of the Employment Act, the employer did not act in accordance with justice and equity.

p. 7
03

Entitlement to reliefs

Holding

Partially allowed - declaration, one month's pay in lieu of notice, 8 off days and maximum compensation awarded; travelling allowance and severance pay declined; house allowance not addressed

Reasoning

The court declared the termination unfair and awarded pay in lieu of notice at Kshs. 38,239.11. Travelling allowance failed for want of contractual or evidentiary basis, and severance pay failed because there was no redundancy. For off days, the employer's failure to produce leave records triggered section 10(7) of the Employment Act, shifting the burden to the employer. Compensation was set at the maximum of Kshs. 458,869.32 considering the discriminatory differential treatment and 13 years as a temporary employee under section 49(4).

p. 8

Legal principles established

#
  • A reasonable expectation of renewal arises from an employer's practice of continuous renewal of fixed-term contracts over many years, and non-renewal without notice breaches that legitimate expectation
  • Enrolment of a fixed-term employee into a gratuity scheme reserved for permanent staff entitles the employee to be treated as permanent staff, failing which the treatment is discrimination and unfair labour practice
  • Where an employer fails to produce employment records, the burden of disproving an alleged term of employment falls on the employer under section 10(7) of the Employment Act

Court orders

#
  1. 1.Declaration that the Claimant's termination from employment was unlawful, unprocedural and unfair
  2. 2.Payment of one month's pay in lieu of notice at Kshs. 38,239.11
  3. 3.Award of 8 off days at Kshs. 11,765.88
  4. 4.Maximum compensation for unfair termination at Kshs. 458,869.32 under section 49(4) of the Employment Act
  5. 5.Respondent to pay the Claimant's costs of the suit
  6. 6.Interest to accrue at court rates till payment in full

Authorities

#

Legislation

  • Employment Actsection 43
  • Employment Actsection 45(4)
  • Employment Actsection 45(5)
  • Employment Actsection 46
  • Employment Actsection 49(4)
  • Employment Actsection 10(3)
  • Employment Actsection 10(7)
  • Employment Actsection 51
  • Employment Actsection 41

Cases cited (10)

  • Communications Commission of Kenya & 5 others v Royal Media Services Limited & 5 others (Petition 14, 14A, 14B & 14C of 2014 (Consolidated))
    [2014] KESC 53 (KLR)
  • Teresa Carlo Omondi v Transparency International Kenya
    [2017] eKLR
  • Rajab Barasa and others v Kenya Meat Commission
    [2016]
  • George S. Onyango OGW v Board of Director Numerical Machining Complex Limited and 2 others
    [2012] eKLR
  • Hassanath Wanjiku v Vanela House of Cofiees
    [2018] eKLR
  • Mbara Adulqadir Abdalla v County Government of Lamu and Lamu County Public Service
    [2022] eKLR
  • Ronald Ongori Gwako v Syroplast Limited
    [2022] eKLR
  • Jeremiah Wachira Ichaura v Kenya Power and Lighting Co. Ltd
    [2012] eKLR
  • Transparency International - Kenya v Omondi (Civil Appeal 81 of 2018)
    [2023] KECA 174 (KLR)
  • Republic v Kenya Revenue Authority Ex Parte M-Kopa Kenya Limited
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination claims under the Employment Act (sections 43, 45, 49 and 10 applied)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Changalwa v Unga Limited (Cause 259 of 2017) [2025] KEELRC 1389 (KLR)", Case Analysis (2025). Cause No 259 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1389/eng@2025-05-09

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