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ELRCPartially AllowedMemorandum of Appeal dated 3rd June, 2024 (arising from CMEL NO. E214 of 2022)· [2025] KEELRC 2453 (KLR)

Kinde Engineering Limited v Odhiambo (Appeal E123 of 2023) [2025] KEELRC 2453 (KLR)

Employment and Labour Relations Court (Presiding Judge - Appeals Division)
17 September 2025
2,111 words in judgment
View original judgmentRead on Kenya Law Watch case
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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-term contract expires creates an expectation of continued work, and ending it on short notice is unfair.

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, Appeals Division, against the judgment of Hon. J.A Agonda (PM) delivered on 20th June 2023 in CMEL No. E214 of 2022, which awarded the respondent Kshs. 868,905.30 for unfair termination. The appellant contended that the respondent was engaged on a fixed term contract which expired by effluxion of time and carried no renewal rights, while the respondent argued that the contract had been renewed by the parties' conduct and was terminated without notice, procedure or the redundancy requirements of section 40 of the Employment Act. The court, applying the retrial principles in Gitobu Imanyara v Attorney General, found that although the six-month contract dated 19th June 2019 had no guarantee of renewal, the appellant allowed the respondent to continue working past its expiry, creating a legitimate expectation that he would work until lawful expiry. The non-renewal notice dated 23rd June 2020 breached the contract's one-month notice clause, and was unfair. The court held the trial magistrate erred in applying Employment Act termination principles and substituted the award with three months' salary (Kshs. 405,000), one month's salary in lieu of notice (Kshs. 135,000) and 14 days' salary (Kshs. 67,000), less Kshs. 143,595 already paid, totalling Kshs. 463,905. The appeal was partially successful, with each party bearing its own costs.

Key legal issues

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01

Whether a fixed term contract extended by conduct can be ended by mere non-renewal notice

Holding

The contract was renewed by conduct when the respondent continued working beyond expiry; the non-renewal notice dated 23rd June 2020 breached the contractual one-month notice/variation clause and was unfair

Reasoning

The six-month contract expired around 2nd December 2019 but the respondent continued working until 30th June 2020, showing renewal by conduct. The contract required one month's notice of termination or payment in lieu and could only be varied in writing. The short notice of non-renewal, received almost two weeks after issue, breached those terms and created unfairness despite there being no guarantee of renewal.

p. 4
02

Whether the Employment Act termination and redundancy provisions applied

Holding

The trial magistrate erred in applying the Employment Act principles governing termination; the respondent was not terminated for misconduct or declared redundant in substance, so the assessment lay in contract

Reasoning

The respondent was not dismissed for any disciplinary issue, so the Employment Act's reasons-and-procedure provisions did not apply. He was on a fixed term contract with no guarantee of renewal. The court held the trial magistrate erred in applying Employment Act termination principles and instead assessed the dispute on the contract's terms, awarding three months' salary for breach of contract plus payment in lieu of notice.

p. 4
03

What quantum was reasonable on the breach of contract

Holding

An award of three months' salary for breach of contract plus one month in lieu of notice was reasonable, taking into account that the respondent signed for his terminal dues without protest and that the contract was a six-month renewable contract

Reasoning

The court reduced the six months' salary awarded by the trial court. It reckoned that the respondent signed for his terminal dues without raising issues, that the contract could have ended by either party invoking the termination clause, and that the contract was only for six months and renewable. It therefore awarded three months' salary plus payment in lieu of notice and the 14 days' salary.

p. 4
04

Whether failure to attach a decree rendered the appeal improper

Holding

Raised by the respondent's counsel but not upheld as fatal; the appeal was heard and determined on its merits

Reasoning

The respondent's counsel argued the appeal was not proper because no decree was attached to the record of appeal, relying on authority that such failure was fatal. The court did not address this objection in its determination and proceeded to dispose of the appeal on the merits, indicating the objection did not succeed.

p. 2

Legal principles established

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  • An appellate court hearing an appeal from a trial court proceeds by way of retrial, reconsidering and evaluating the evidence itself, but must make due allowance for not having seen or heard the witnesses and will not interfere with a reasonable finding of the trial court
  • Where an employer allows an employee to continue working beyond the expiry of a fixed term contract, a legitimate expectation arises that the employee will work until the lawful expiry of the contract, and termination short of that is unfair

Court orders

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  1. 1.Set aside the judgment of the trial court and substitute it with judgment in favour of the respondent
  2. 2.Award three months' salary of Kshs. 405,000
  3. 3.Award one month's salary in lieu of notice of Kshs. 135,000
  4. 4.Award 14 days' salary for July of Kshs. 67,000 (subtotal Kshs. 607,500)
  5. 5.Less amount already paid of Kshs. 143,595, total payable Kshs. 463,905
  6. 6.Each party to bear their own costs of the appeal
On appeal from
Magistrates' Court (Employment and Labour Relations)
CMEL NO. E214 of 2022
Jurisdiction invoked
First appellate jurisdiction over the trial magistrate's judgment in an employment dispute (Employment and Labour Relations Court, Appeals Division)

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, "Kinde Engineering Limited v Odhiambo (Appeal E123 of 2023) [2025] KEELRC 2453 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 3rd June, 2024 (arising from CMEL NO. E214 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2453/eng@2025-09-17

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