Peter Odhiambo Obuya v Busia Sugar Industry Ltd

a) The Learned trial magistrate erred law and fact by failing to award damages for unlawful termination as prayed by the claimant despite making a finding that there was no disciplinary hearing conducted by the Respondent, since the claimant was unlawfully terminated. b) The Learned trial Magistrate erred in law and fact by awarding the claimant a merger amount of Kshs.15,000/=in settlement without laying any basis in law. c) The Learned trial Magistrate erred in law and fact in contradicting her judgment by making a decision that the claimant did not prove his case on a balance of probabilities and then going ahead to concede that the Respondent failed conduct disciplinary hearing for the claimant. d) The Learned trial Magistrate erred in law and fact by failing to take into consideration the submissions made by the Appellant by stating in her judgment that the claimant did not file any submissions when the same were filed and paid for. e) The judgment herein is against the weight of evidence on record and the law. 4. The Appeal is opposed by the Respondent through Ipapu P. Jackah & Co. Advocates. 5. By consent, the court directed that the appeal be canvassed by way of written submissions. Ms Wagumba for the Appellant filed written ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 2 | 14

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submissions dated 13th January 2026 and Mr Ipapu for the Respondent filed written submissions dated 2nd March 2026. II. SUBMISSIONS BY COUNSEL 6.Counsel for the Appellant submitted on the following issues – Whether the Appeal has merit – Whether the claimant’s terms of service amounted to permanent employment as per section 37 of the Employment Act; Whether the claimant was terminated unfairly by the Respondent; and, Whether the Claimant is entitled to the reliefs sought. 7.Counsel submitted that the learned Magistrate erred by finding that the Appellant had not proved his case while at the same time acknowledging that the Respondent had failed to conduct a disciplinary hearing. It was further submitted that the award of Kshs15,000/= was not supported by any legal basis and that the trial court wrongly found that the Appellant had not filed written submissions, despite the same having been filed and paid for. 8.Counsel submitted that although the Respondent contended that the Appellant was on a term contract that expired on 30th April 2020, the Appellant had worked continuously for approximately 14 months, from 20th February 2019 to April 2020. It was argued that by virtue of Section 37 of the Employment Act, the Appellant’s casual ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 3 | 14

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employment converted to permanent terms attracting the benefits appurtenant to such employment. 9.On unfair termination, Counsel cited the decision in Walter Ogal Anuro v Teachers Service Commission [2013] eKLR in submitting that fairness in termination requires both substantive justification and procedural fairness. It was argued that the Respondent gave inconsistent reasons for the termination, at one point relying on expiry of the contract and at another stage referring to misconduct, including insubordination and neglect of duty. It was submitted that under Section 43 of the Employment Act, the Respondent bore the burden of proving the reasons for the termination, while Sections 45(2) and 47(5 of the Employment Act required the employer to establish that the reasons were valid and fair. In buttressing this assertion, Counsel cited the decision in Pius Machafu Isindu v Lavington Security Guards Limited [2017] eKLR. 10. As regards procedural fairness, Counsel submitted that although the Respondent issued show-cause letters dated 30th January 2020 and 12th March 2020, no disciplinary hearing was conducted. It was submitted that the Respondent’s witness admitted in crossexamination that there were no minutes or other records evidencing a disciplinary hearing. It was submitted that, therefore, the Appellant was denied an opportunity to respond to the allegations against him, contrary to Section 41 of the Employment Act. Counsel cited the ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 4 | 14

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decisions in Catherine Wawira Ndwiga v Board of Trustees, Starehe Girls’ Centre [2020] eKLR, Kenya Union of Commercial Food and Allied Workers v Meru North Farmers Sacco Limited [2013] eKLR and Jane Samba Mukala v Ol Tukai Lodge Limited, (2013) eKLR, which emphasized on the employee’s right to a fair hearing before termination. 11.Counsel further submitted that the Respondent had advanced inconsistent reasons for termination because, while the termination was said to arise from expiry of the contract, the Respondent also referred to misconduct and previous warning and show-cause letters. The Counsel for the Appellant argued that these varying reasons did not satisfy the requirement for a valid and consistent reason for termination. 12.On remedies sought by the Appellant, Counsel submitted that having established unlawful and unfair termination, the Appellant was entitled to the reliefs sought. These included compensation equivalent to 12 months’ salary under Section 49(1)(c) of the Employment Act, calculated at Kshs24,840/= per month; one month’s salary in lieu of notice since only five days’ notice had been given instead of the statutory 30 days under Section 35 of the Employment Act, and, payment for accrued unpaid leave of Kshs24,840/=. 13.On the other hand, Counsel for the Respondent submitted globally, arguing that the appeal was unmeritorious and ought to be dismissed with costs. ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 5 | 14

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14.Counsel argued that the Appellant was employed on a specific fourmonth contract which expressly provided for its duration and termination. It was contended that the period preceding the contract constituted an apprenticeship or internship and could not be considered as a period of employment for purposes of Section 37 of the Employment Act. Consequently, it was submitted that the Appellant was not entitled to terms of permanent employment or the attendant protections, including the right to a disciplinary hearing. 15.Counsel further submitted that the Respondent complied with Section 43 of the Employment Act, in that the reasons for termination were disclosed in the show-cause letters issued to the Appellant. It was argued that there were genuine grounds for termination, being the Appellant’s alleged solicitation of kickbacks from Ugandan farmers. 16.On the remedies sought, Counsel submitted that the Appellant was not entitled to compensation, payment for unpaid leave, or salary in lieu of notice, since the termination was founded on valid and justifiable grounds. Counsel therefore urged the Court to find that the appeal lacked merit and dismiss the same with costs. III. ISSUES FOR DETERMINATION 17.The court has perused the record of appeal, including the proceedings in the lower trial court, the memorandum of appeal, and the ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 6 | 14

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submissions by Counsel for both parties as summarized above. The following issues commend themselves to the court for determination – a) Whether the termination of Appellant was unfair and unlawful? b) Did the lower trial court arrive at the correct decision in regard to the above issue and the reliefs awarded? c) What are the appropriate orders for this court to make in regard to the above issues and on costs? IV.TERMINATION 18.As the first appellate court, this court is obligated to evaluate the evidence on record and arrive at its own conclusions, but bearing in mind that it neither heard nor recorded the evidence during the trial – see Selle V & Another V Associated Motor Boat Co. Ltd (1968) EA 123. 19.The background to the present appeal is that the Appellant filed Busia MCELRC cause No. 4 of 2020 against the Respondent – see Pages 26 to 29 of the record of appeal. The Respondent filed a response to the claim dated 2nd November 2023 – see Pages 30 to 32 of the record of appeal. 20.The cause was heard viva voce. As per his pleadings and evidence in the lower trial court, the Appellant’s case was that he was employed as a Cane-yard supervisor from 20th February 2019 on a basic salary ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 7 | 14

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of Kshs24,840/=. He pleaded that on 4th May 2020 he received a letter indicating that his contract had been terminated on 29th April 2020. He pleaded that he was not served with a show-cause letter nor invited to a disciplinary hearing preceding the termination. 21.It is on the basis of the foregoing that the Appellant prayed for the following reliefs in the lower court – a) A declaration that the claimant’s termination was unlawful b) Kshs347,760/- as particularized in paragraph 9(a) (b), and (c) above Paragraph 9 broken down as follows – i) General damages for unlawful termination (Kshs24,840 x 12 months) …………. Kshs298,080/ii) One month rent in lack of notice(sic) …….Kshs24,840/= iii) Unpaid leave days……………………...Kshs24,840/= Total………………………..…Kshs347,760/= c) Costs of this suit plus interest d) Interest on(b) and (c) above e) Any other further remedy that this court deems just and expedient to grant. 22.In response to the claim, the Respondent denied the Appellant's claim in its totality. 23. It is not in dispute that the Appellant was engaged by the ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 8 | 14

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Respondent. The Appellant’s last contract as a cane-yard supervisor, produced by the Respondent as defence exhibit 1, was dated 16th December 2019 and running from 1st January 2020 to 30th April 2020 – see pages 81 to 84 of the Record of Appeal. The notice of expiry of the contract dated 29th April 2020 indicated that the Appellant’s last day of work would be 4th May 2020 – see page 61 of the Record of Appeal. 24. The Appellant’s position was that he worked continuously for 14 months from 20th February 2019 to 4th May 2020 – see Page 41 of the Record of Appeal. In cross-examination the Appellant during the trial conceded that he worked on contract and not on permanent basis. The record shows that he stated that in 2019 his contract was for four months ending in June and that he had signed the same. He also stated that he signed a further contract running from June to September, 2019 – see page 42 of the Record of Appeal. The Appellant further stated that he signed four continuous Contracts with the Respondent - see page 47 of the Record of Appeal. 25. The only contract availed in the trial was produced by DW1 (Caleb Anyuka) as exhibit 1 – page 50 of the Record of Appeal. The same was produced without objection. In that contract, the Appellant was engaged as a cane-yard supervisor from 1st January 2020 to 30th April 2020, a fixed period. ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 9 | 14

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26. The principles governing fixed-term contracts were clearly spelt out by the Court of Appeal in National Water Conservation & Pipeline Corporation v Mwanza [2017] KECA 797 (KLR). The Court stated as follows – The general principle, as we understand it, is that a fixed-term contract will terminate on the sunset date unless it is extended in terms stated in the contract. A court cannot rewrite the terms of a contract freely entered into between the parties. Once there is a written contract, the court will seek to give meaning to such contract, giving ordinary meaning to its terms in determining any issue that may arise. 27. The Court of Appeal further stated that – We also find no legitimate expectation that the employee would be given the reasons for nonextension of a fixed term contract as there was no obligation on the part of the corporation to give any. 28. The Appellant in his testimony admitted that he had signed various contracts in the course of his employment with the Respondent. While the contracts were successive, they were for definite periods. 29. This Court agrees with and is actually bound by the reasoning in the decision above. The Court finds that while the trial magistrate did not address the nature of the Appellant’s engagement, the Appellant’s contract was for a fixed period of four months and no more. While there was a provision for termination for gross misconduct under Clause 6 of the contract - see page 82 of the record of appeal – once ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 10 | 14

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the contract lapsed by effluxion of time, there was no obligation on the part of the Respondent to give reasons for non-extension or renewal of the contract. 30. Therefore, while the Appellant had worked for the Respondent for an aggregate period of about 14 months on various fixed-term contracts, the Respondent was not obligated to renew the Appellant’s contract or to provide a reason(s) for non-renewal. The contract lapsed and, while the Appellant had been issued with various show-cause letters during period of the last the contract, the Respondent was not obligated to undertake any disciplinary proceedings when the contract lapsed through effluxion of time. The Appellant’s engagement was contractual and not a casual engagement and thus conversion under Section 37 of the Employment Act could not apply. 31. The Court finds and holds that in failing to establish that the Appellant’s engagement was on contractual basis and that the same had lapsed, the trial court misdirected itself in finding that the Respondent had failed to call the Appellant for a disciplinary hearing – see page 100 of the record of Appeal. I further find and hold that the trial court misdirected itself in awarding damages of Kshs15,000/= on an irrelevant provision allegedly on the basis that the Appellant was not given a hearing. ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 11 | 14

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32. The trial court held that the Appellant had not filed any submissions – see Page 99 of the Record of Appeal – yet the submissions are on record – see Page 98 to 97 of the Record of Appeal. However, there was no evidence on the face of the submission to indicate whether the same had been filed in court by the time that the trial court was writing the judgment. Nonetheless, the presence or absence of those submissions shall not prejudice the findings and holdings of this court on this appeal. V. RELIEFS 33. In his memorandum of claim, the Appellant sought 12 months’ salary as general damages (Kshs24,840/= x 12 = Kshs298,080/=); Onemonth salary in lieu of notice (Kshs24,840/=) and unpaid leave days in the sum of Kshs24,840/= - see page 27 of the Record of Appeal. The trial court did not consider the prayers sought on salary in lieu of notice and unpaid leave, but awarded Kshs15,000/= in damages. 34. This Court has found and held that the Appellant’s contract of employment was for a fixed period and lapsed by effluxion of time and, there was therefore no basis for the Respondent to undertaking disciplinary proceedings against the Appellant who had ceased to be an employee. The Award of Kshs15,000/= by the trial court was therefore misdirected, wrong, and unlawful and the same is hereby set aside. ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 12 | 14

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35. The notice or payment in lieu of notice was not required on the part of the Respondent since the contract lapsed by effluxion of time. The Respondent was not obligated to issue any notice, although one was issued on 4th May 2020 – see page 85 of the Record of Appeal. Payment in lieu of notice would only be available in the event of termination of contract, but in this case the contract lawfully lapsed. The Court thus finds and holds that the prayer for salary in lieu of notice was not available to the Appellant. 36. On the prayer for pay for leave days under clause 8(i) of the contact, the Appellant was entitled to two pro rata leave days for every full month worked – see page 82 of the Record of Appeal. He was required to apply for leave seven days in advance. The Appellant did not show any proof that he applied for and was denied leave. Furthermore, the Appellant did not specify the number of days or the number of leave days he had not taken, making the claim ambiguous and not specifically pleaded and proved. It is on that premise that this court finds and holds that the Appellant was not entitled to the award for leave days. 37. Consequently, this appeal has no merit and the same is hereby dismissed. VI. ORDERS 38. Flowing from the foregoing, the court makes the following orders – ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 13 | 14

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a) The appeal fails in its entirety and is hereby dismissed. b) The award of Kshs15,000/= as damages be and is hereby set aside. c) Each party shall meet own costs for this appeal. DELIVERED VIRTUALLY, DATED, AND SIGNED AT KAKAMEGA THIS 21ST DAY OF SEPTEMBER 2026. .................................... DAVID NDERITU JUDGE ELRC BUNGOMA APPEAL NO. E003 OF 2025 JUDGMENT PAGE 14 | 14

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