Changalwa v Unga Limited (Cause 259 of 2017) [2025] KEELRC 1389 (KLR)
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
#Key legal issues
#Whether the Claimant had legitimate expectation of renewal of his fixed-term contract
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
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.
Whether the non-renewal of the contract amounted to unfair termination
Yes - non-renewal without notice amounted to unfair termination, aggravated by discriminatory exclusion from permanent staff treatment despite gratuity scheme membership
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.
Entitlement to reliefs
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
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).
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.Declaration that the Claimant's termination from employment was unlawful, unprocedural and unfair
- 2.Payment of one month's pay in lieu of notice at Kshs. 38,239.11
- 3.Award of 8 off days at Kshs. 11,765.88
- 4.Maximum compensation for unfair termination at Kshs. 458,869.32 under section 49(4) of the Employment Act
- 5.Respondent to pay the Claimant's costs of the suit
- 6.Interest to accrue at court rates till payment in full
- 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.