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ELRCPartially AllowedKisumu ELRC Appeal (MCELRC No. E223 of 2022 appealed)· [2025] KEELRC 1697 (KLR)

Opiyo v Bedrock Holdings (Cotec Security Group Limited) (Appeal E006 of 2025) [2025] KEELRC 1697 (KLR)

Employment and Labour Relations Court
12 June 2025
JGJacob Gakeri
3,698 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed that working beyond a fixed-term contract's expiry creates a renewed contract, so ending it requires fair process and compensation.

What this practically means

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Executive summary

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This is a first appeal by Joseph Onyango Opiyo against the judgment of Hon. Dennis Matutu, SPM in Kisumu MCELRC No. E223 of 2022, which had found that the appellant served under a fixed term contract that lapsed and awarded only a certificate of service. The appellant, allegedly employed as a security guard from May 2009, contended his employment was unfairly terminated in May 2022 whenever he sought leave. The appeal was argued on six grounds, including that continued work after expiry of the fixed term contract inferred renewal and that five months of continued service created a legitimate expectation of renewal. The respondent maintained the contract ended by effluxion of time. Allowable the appeal, the court held that although a fixed term contract lapses by effluxion of time, the appellant's continued rendering of services for almost five months after the contract lapsed on 5th December 2021, coupled with continued payment of salary, led to an inescapable inference that the contract had been renewed on similar terms. The letter of 23rd May 2022 styled 'End of contract annual leave' was therefore an unlawful and unfair termination, as the employer adduced no evidence of valid reason or fair procedure. The court further found the respondent's practice of granting annual leave only after contract lapse violated Article 41 fair labour principles and Section 28 of the Employment Act. The trial court's decision was set aside in its entirety and substituted with a declaration, salary in lieu of notice of Kshs.17,481.90, underpayment of Kshs.87,791.30, and compensation equivalent to five months' gross salary of Kshs.87,409.50, totalling Kshs.192,682.70, with costs before the trial court and 50% costs of the appeal. Claims for accrued leave days and house allowance were declined.

Key legal issues

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01

Renewal of fixed term contract by conduct

Holding

The appellant continued working for almost 5 months after the contract lapsed and was paid; a new contract on the same terms is inferred, so the letter of 23rd May 2022 amounted to a termination, not lapse.

Reasoning

Both parties agreed the contract lapsed on 5th December 2021 yet the appellant continued rendering services and receiving salary until May 2022. The court held that continuing services coupled with payment shows the respondent had renewed the contract on similar terms, following Eunice Mwikali Munyao v Elys Chemical Industries Ltd. The employee could not be expected to apply afresh for employment he was already rendering.

p. 5
02

Unfair and unlawful termination

Holding

Termination by a letter styled 'End of contract annual leave' while a new contract was running was unfair and unlawful; the respondent tendered no evidence of meeting the Employment Act threshold.

Reasoning

The new contract effective 6th December 2021 had not run its term by May 2022. The employer produced no evidence of valid reason or fair procedure under Sections 41 and 45 of the Employment Act. Relabelling the termination as end-of-contract leave could not avail the respondent. The trial magistrate erred in not appreciating the existence of the renewed contract.

p. 6
03

Fair labour practices under Article 41

Holding

The respondent's practice of structuring one-year fixed term contracts with leave granted only after lapse, and ending employment whenever leave was requested, was an unfair labour practice.

Reasoning

The contracts contained no annual leave provision, and leave was only granted after the contract had lapsed, when no employment relationship existed. Section 28 of the Employment Act entitles an employee to leave after every 12 consecutive months of service. The court found this structure inconsistent with fair labour principles and faulted the trial court for overlooking the mischievous conduct.

p. 6
04

Underpayment claim

Holding

The appellant's gross salary of Kshs.14,000 was below the prescribed wage for a day guard in Kisumu; underpayment of Kshs.87,791.30 for 36 months was awarded.

Reasoning

The uncontested May 2022 payslip showed gross salary of Kshs.14,000, while the Regulation of Wages (General) (Order), 2022 prescribed Kshs.17,481.90 gross from 1st May 2022 (underpayment Kshs.3,481.90) and Kshs.15,608.84 from 2018 (underpayment Kshs.2,408.84), totalling Kshs.87,791.30 over 36 months.

p. 7
05

Compensation under Section 49(1)(c)

Holding

Equivalent of 5 months' gross salary (Kshs.87,409.50) was fair, considering 13 years of service, no contribution to termination and no recorded warning.

Reasoning

The court exercised its discretion under Section 49(1)(c) of the Employment Act, weighing the appellant's long service of about 13 years, his innocence, absence of warnings, and the fact that he did not appeal the termination or demonstrate an expectation of remaining in employment.

p. 8

Legal principles established

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  • A fixed term contract ends by effluxion of time and no termination notice or reason is required unless the contract so provides.
  • Continued rendering of services and payment of salary after expiry of a fixed term contract may found an inference of renewal on the same terms.
  • Granting annual leave only after lapse of the employment relationship constitutes an unfair labour practice.
  • For a termination to be fair, there must be both substantive justification and procedural fairness.

Court orders

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  1. 1.The declaration sought that termination of employment was unprocedural, unfair and unlawful was merited
  2. 2.Salary in lieu of notice awarded at Kshs.17,481.90
  3. 3.Underpayment awarded at Kshs.87,791.30
  4. 4.Equivalent of 5 months' gross salary as compensation awarded at Kshs.87,409.50
  5. 5.Total award of Kshs.192,682.70
  6. 6.Costs before the trial court and 50% costs of this appeal awarded to the appellant
  7. 7.Trial court's decision set aside in its entirety and substituted with the above orders

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 41
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 48
  • Employment ActSections 28, 28(1), 31, 41, 45, 49(1)(c)
  • Regulation of Wages (General) (Order), 2022
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (19)

  • Eunice Mwakali Munayu V Elys Chemical Industries Ltd
  • Justin Beswick V Local Ocean Conservation (LOC) Kenya Ltd
    [2022] eKLR
  • Walter Ogal Anuro V Teachers Service Commission
    [2013] eKLR
  • Samuel Bundi Mukora V Musa Chebirige t/a Farmers Inn Club
    [2019] eKLR
  • Gilbert Isandula Shikalo V Bernard Njoroge t/a Creative Metro Services
    [2002] eKLR
  • Irene Akoth V Tobias See & Others
    [2021] eKLR
  • Anne Theuri V Kadet Ltd
    [2013] KEELRC 160 (KLR)
  • Registered Trustees of the Presbyterian Church of East Africa & another V Ruth Gathoni Ngotho – Kariuki
    [2017] KECA (KLR)
  • Transparency International – Kenya V Teresa Carlo Omondi
    [2023] KECA 174 (KLR)
  • CMC Aviation Ltd V Mohammed Noor
    [2014] eKLR
  • National Bank of Kenya Ltd V Pipeplastic Samkolit (K) Ltd & another
    [2001] eKLR
  • Pius Kimaiyo Langat V Cooperative Bank of Kenya Ltd
    [2017] eKLR
  • Selle & another V Associated Motor Boat Co. Ltd
    [1968] EA 123
  • Peters Sunday Post Ltd
    [1958] EA 424
  • LE'strange V Graucob
    [1934] 2 KB 394
  • Parker V South Eastern Railway Co.
    [1877] 2 C.P.D 416
  • Francis Chire Chachi V Amatsi Water Services Co. Ltd
    [2012] eKLR
  • Registered Trustees De La Salle Christian Brothers t/a St. Marys Boys Secondary School V Julius DM Baini
    [2017] eKLR
  • Naima Khamis V Oxford University Press East Africa Ltd
    [2017] eKLR
On appeal from
Magistrates' Court (Kisumu)
Kisumu MCELRC No. E223 of 2022
Jurisdiction invoked
First appellate jurisdiction over the magistrates' court judgment (Employment and Labour Relations Court)

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, "Opiyo v Bedrock Holdings (Cotec Security Group Limited) (Appeal E006 of 2025) [2025] KEELRC 1697 (KLR)", Case Analysis (2025). Kisumu ELRC Appeal (MCELRC No. E223 of 2022 appealed). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1697/eng@2025-06-12

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