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ELRCPartially AllowedAppeal against judgment in MCELRC No. E899 of 2021· [2025] KEELRC 1729 (KLR)

Kenya Commercial Bank Limited v Bogita (Employment and Labour Relations Appeal E286 of 2024) [2025] KEELRC 1729 (KLR)

Employment and Labour Relations Court (Appellate Jurisdiction from Chief Magistrate's Court)
12 June 2025
7,307 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~29 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court cut a banker's award to Kshs 1,045,005, confirming that a fixed-term contract ends on its expiry date, but union-negotiated benefits still apply to non-union staff.

What this practically means

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Executive summary

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The Appellant, a commercial bank, appealed against the judgment of Honourable W. K. Micheni (CM) delivered on 20th September 2024 in MCELRC No. E899 of 2021, which had partially allowed the Respondent's employment claim and awarded Kshs. 1,514,170/- comprising one month's pay in lieu of notice, underpayment, house allowance, leave allowance and compensation for wrongful termination. The appeal was canvassed by way of written submissions. The court identified three issues: whether the trial magistrate erred in finding legitimate expectation of renewal of the fixed-term contract; whether the Respondent was entitled to CBA benefits; and whether the award of Kshs. 1,514,170/- should stand. On the first issue, the court found the respondent had served on back-to-back one-year fixed-term contracts for eleven years, and that the trial court had relied on an ELRC decision (Teresa Carlo Omondi) that had since been overturned by the Court of Appeal in Transparency International - Kenya v Omondi. Applying that binding precedent, the court held there was no legitimate expectation of renewal and no unfair termination, as the contract ended by effluxion of time; the notice pay and compensation awards were set aside. On the second issue, the court followed Omondi Justus Ranga'nga & 28 others v KCB Bank Kenya Ltd & BIFU (Cause No. E618 of 2021) and upheld the finding that the Respondent was entitled to CBA benefits notwithstanding non-membership of the union. On quantum, the underpayment of Kshs. 954,135/- was upheld, house allowance was set aside because the contract provided a consolidated salary, and leave allowance was substituted at Kshs. 90,870. The appeal was partially allowed, with the judgment set aside and substituted, interest at court rates, costs of the suit, each party bearing own costs in the appeal, and a stay order of 30 days granted.

Key legal issues

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01

Whether legitimate expectation of renewal of a fixed-term contract existed

Holding

No legitimate expectation of renewal arose; the contract ended by effluxion of time and there was no unfair termination

Reasoning

The court re-evaluated the evidence and found the respondent served on back-to-back fixed-term contracts each of not more than one year. The Court of Appeal decision in Transparency International - Kenya v Omondi, on which the trial court's contrary finding relied, had since been overturned and was not good law. The appellant never gave any indication it would renew the last contract. Following the binding Court of Appeal jurisprudence, the court held there could be no obligation on the employer beyond the appointed end date of a fixed-term contract, save for terminal dues.

p. 8
02

Whether the Respondent was entitled to benefits under the CBA despite non-membership of BIFU

Holding

The trial court's finding that the Respondent was entitled to CBA benefits was upheld, following Omondi Justus Ranga'nga & 28 others v KCB Bank Kenya Ltd & BIFU

Reasoning

The court found that an identical factual issue concerning employees on one-year contracts in the same cadre had already been determined by Justice M. Mbaru in Ranga'nga v KCB & BIFU, where the employer was held bound to apply CBA terms as minimum conditions of employment and where discrimination was declared. That decision had not been overturned on appeal. The court therefore declined to take a different position on the Respondent's entitlement to CBA-based benefits.

03

Whether the award of Kshs. 1,514,170/- should be disturbed

Holding

Underpayment of Kshs. 954,135/- upheld; leave allowance substituted at Kshs. 90,870; notice pay, compensation and house allowance set aside

Reasoning

Having found no unfair termination, the notice pay and compensation for wrongful termination could not stand. On house allowance, the court found the contract provided a consolidated salary which was all-inclusive, invoking section 31(2)(a) of the Employment Act, so the award was set aside. Underpayment was restricted to the CBA period of 21 months and left undisturbed. Leave allowance was recomputed as the differential between Kshs. 68,716 and Kshs. 23,281 for two months, yielding Kshs. 90,870.

p. 12

Legal principles established

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  • The doctrine of legitimate expectation does not arise in the renewal of a fixed-term contract, save where the employer by acts, omission or promise indicated renewal was forthcoming.
  • Where an employment contract consolidates house allowance into the monthly salary, no separate award of house allowance may be made under section 31(2)(a) of the Employment Act.
  • The terms negotiated under a CBA apply to employees performing the same work regardless of membership or contract status, per section 59(1)(b) of the Labour Relations Act.

Court orders

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  1. 1.Underpayment of salaries awarded at Kshs. 954,135/-
  2. 2.Leave allowance awarded at Kshs. 90,870
  3. 3.Interest on the total sum of Kshs. 1,045,005/- (underpayment and leave allowance) at court rates from date of judgment
  4. 4.Costs of the suit awarded
  5. 5.Each party to bear own costs in the appeal
  6. 6.Stay order of 30 days granted

Authorities

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Legislation

  • Employment Actsection 5 (equal remuneration / non-discrimination)
  • Employment Actsection 26
  • Employment Actsection 31(2)(a)
  • Labour Relations Actsection 48
  • Labour Relations Actsection 59(1)(b)
  • Constitution of Kenya, 2010Article 27

Cases cited (16)

  • Selle v Associated Motor Boat Co.
    [1968] EA 123
  • Mbogo v Shah
    [1968] EA Page 93
  • Transparency International Kenya v Omondi (Teresa Carlo Omondi)
    (Civil Appeal 81 of 2018) [2023] KECA 174 (KLR) (17 February 2023)
  • Registered Trustees De La Salle Christian Brothers T/A St. Mary's Boys Secondary School v Julius D M Baini
    [2017] eKLR
  • Rajab Barasa & 4 Others v Kenya Meat Commission
    [2016] eKLR
  • George Onyango v The Board of Directors of Numerical Machining Limited & Others
    [2014] eKLR
  • National Bank of Kenya Ltd v Pipe Plastic Samkolit (K) Ltd
    (2002) 2 E.A. 503, (2011) eKLR
  • Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd
    (2017) eKLR
  • East African Portland Cement Limited v Kenya Chemical & Allied Workers Union
    [2017] eKLR
  • Lynda Vihenda Chimwani v Diamond Trust Bank Limited
    ELRC Cause No. 2153 of 2017
  • Grain Pro Konya Inc. Ltd v Andrew Waithaka Kiragu
    (Civil Appeal 228 of 2017) [2018] KECA 563 (KLR) (28 June 2019)
  • Omondi Justus Ranga'nga & 28 others v KCB Bank Kenya Ltd & BIFU
    Nairobi Cause No. E618 of 2021 (delivered 30th November 2022)
  • Tumaini Jacob Mathayo & 5 others v Kili Security Co. Ltd
    Labour Relation Revision No. 11 of 2023 (19th March 2024)
  • Medecins San Frontiers (MSF) Belgium v Vengai Nhopi and 11 others
    Civil Appeal No. SC. 278/16
  • Dierks v University of South Africa
    (1999) 20 ILT 1227
  • Tanzania Civil Appeal 53 of 2019
    TZCA 96 (7 March 2022) TANZLII
On appeal from
Chief Magistrate's Court at Nairobi, Milimani Law Courts
MC.ELRC No. E899 of 2021
Jurisdiction invoked
First appellate jurisdiction over the magistrates' court (Employment and Labour Relations Court appeal from the Chief Magistrate's 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, "Kenya Commercial Bank Limited v Bogita (Employment and Labour Relations Appeal E286 of 2024) [2025] KEELRC 1729 (KLR)", Case Analysis (2025). Appeal against judgment in MCELRC No. E899 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1729/eng@2025-06-12

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