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ELRCPartially AllowedNot stated in the judgment

Okinyo v Erubi Engineering Service & Supplies Limited (Cause E339 of 2020) [2025] KEELRC 2549 (KLR)

Employment and Labour Relations Court
25 September 2025
2,481 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that continuing work after a fixed-term contract expires renews it, and skipping redundancy procedure makes termination unfair.

What this practically means

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Executive summary

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The Claimant sued the Respondent challenging the termination of his employment on 30th January 2020 (effective 28th January 2020), contending it was an unlawful redundancy carried out without notice or due procedure. The Respondent denied the claim, asserting the Claimant was engaged on successive fixed term contracts, the last of which lapsed on 31st December 2019 by effluxion of time, and that terminal dues were paid. The court framed three issues: the nature of the employment relationship, the lawfulness of the termination, and entitlement to reliefs. It found the relationship was based on renewable fixed term contracts, not indefinite employment. Critically, the court held that although the contract expiring 31st December 2019 was not renewed in writing, the parties continued the employer-employee relationship into January 2020, renewing the contract by conduct on the same terms; therefore the contract did not lapse by effluxion of time but was terminated prematurely. The Respondent's lay-off letter, citing lack of funds and/or work, denoted a redundancy, but the Respondent complied with none of the requirements of sections 40 and 45 of the Employment Act: no one-month redundancy notice, no notification of the labour office, no communication of the extent of the redundancy, and no evidence of the selection procedure. The termination was declared improper. The court awarded five months' salary (Ksh. 163,500) as compensation for unfair termination and two months' notice pay (Ksh. 65,400), with interest at court rates, subject to statutory deductions. The claim for accrued leave pay was declined on the Claimant's concession, and the Claimant was awarded costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.What was the nature of the employment relationship between the parties?
  2. 2.Was the relationship lawfully terminated?
  3. 3.Is the Claimant entitled to the reliefs which he seeks through this action?

Key legal issues

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01

Nature of the employment relationship

Holding

The employment relationship was based on renewable fixed term contracts, not permanent or indefinite terms.

Reasoning

The Claimant was first engaged on a three-month fixed contract, then on one-year fixed contracts renewable subject to good performance. Although the contract expiring December 2018 was not renewed in writing, oral evidence confirmed renewal, and prior dealings implied renewal on the same terms for a further year to December 2019.

p. 3
02

Whether the contract terminated by effluxion of time

Holding

No. The parties continued the relationship beyond 31st December 2019, renewing the contract by conduct; termination on 28th January 2020 was premature termination, not effluxion of time.

Reasoning

The Respondent's own letter of 30th January 2020 laid the Claimant off effective 28th January 2020, showing the contract was still subsisting after the fixed term ended. By conduct the parties renewed the contract on the same terms, which would have run to 31st December 2020; instead it was terminated prematurely for redundancy-type reasons.

p. 4
03

Whether the termination was lawful

Holding

The termination was on account of redundancy but without complying with sections 40 and 45 of the Employment Act; the termination was improper and unfair.

Reasoning

The lay-off letter cited lack of funds and/or work, denoting a redundancy. The Respondent gave no one-month redundancy notice, did not notify the local labour office, did not communicate the extent of the redundancy, and adduced no evidence of the selection procedure. The process therefore violated the statutory redundancy procedure.

p. 4
04

Reliefs

Holding

Awarded five months' salary as compensation (Ksh. 163,500) and two months' notice pay (Ksh. 65,400); declined accrued leave pay; awarded costs and interest.

Reasoning

Considering the duration of employment and that the Claimant's conduct did not contribute to the loss of employment, the court exercised its discretion under sections 49 and 50 of the Employment Act to award five months' compensation. The contract entitled either party to two months' notice, so notice pay was due. Leave pay failed on the Claimant's own concession.

p. 5

Legal principles established

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  • Where parties continue the employer-employee relationship after a fixed term contract lapses, the contract is renewed by conduct on the same terms.
  • An employer releasing an employee on account of redundancy must comply with sections 40 and 45 of the Employment Act, including notice and selection procedure.

Court orders

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  1. 1.Declaration that the Respondent improperly terminated the Claimant's services on account of an alleged redundancy
  2. 2.Compensation for unfair termination of Ksh. 163,500.00
  3. 3.Pay in lieu of notice of Ksh. 65,400.00
  4. 4.Interest on the award at court rates from the date of the judgment
  5. 5.Award subject to applicable statutory deductions
  6. 6.Claimant awarded costs of the case

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; ELRC Procedure Rules referenced)

Relief refused

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Pay in lieu of accrued leave days

The Claimant conceded during cross-examination that he had utilized his leave days.

p. 5

Costs

The court awards the Claimant costs of the case.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

By this letter, it is clear that the parties continued to relate as employer-employee in January 2020 despite the fixed term contract between them having come to a close on 31st December 2019.
p. 4Renewal of fixed term contract by conduct
As such, the court finds that the Respondent improperly terminated the Claimant’s services. It is so declared.
p. 5Improper termination by redundancy
d. The court awards the Claimant compensation for unfair termination of his contract of service in the sum of Ksh. 163,500.00.
p. 5Final orders
e. The court awards the Claimant Ksh. 65,400.00 as pay in lieu of notice to terminate his contract of service.
p. 6Final orders
i. The court awards the Claimant costs of the case.
p. 6Costs

Issues in the judgment

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minor

The termination letter dated 30th January 2020 states termination effective 28th January 2020 and mentions the Claimant's own fiscal problems, which is internally inconsistent with redundancy premised on the Respondent's lack of funds/work.

minor

Case number and neutral citation are not stated in the judgment text provided.

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, "Okinyo v Erubi Engineering Service & Supplies Limited (Cause E339 of 2020) [2025] KEELRC 2549 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2549/eng@2025-09-25

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