Eastern Produce (K) Ltd (Sitoi Estate) v Shadrack Muguna Navade

3. Dissatisfied with the judgment, the Appellant lodged the present appeal through a Memorandum of Appeal dated 9th June 2023 on the following grounds:a. THAT the Learned trial Magistrate erred in law and in fact by awarding the Respondent reliefs due to a permanent employee under the Employment Act, 2007 to the Respondent who admitted having been employed on temporary contractual basis. b. THAT the Learned Magistrate erred by failing to acknowledge the fact that the Respondent was a contract employee with the Appellant and that the employment relationship ended upon expiry of contract. c. THAT the Learned Magistrate erroneously misconstrued that mere existence of a fixed term contract could entitle the Respondent to compensation for termination without considering the reasons provided for the termination of the said contract. d. THAT the Learned Magistrate erred by failing to recognize that the employment relationship between the Respondent and the Appellant was on a contractual basis and further that the Respondent did not produce any 2 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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evidence of permanent employment while the Appellant provided the Respondent's Fixed Term contract. e. THAT the Learned Magistrate erred in law and in fact by completely ignoring the witness testimony of the Appellant. f. THAT the Learned Magistrate erred in law and in fact by completely ignoring the documentary evidence adduced by the Appellant during hearing. g. THAT the Learned Magistrate erred in law and in fact by completely ignoring the Appellant's written submissions on the issues. h. THAT the Learned Magistrate erred in law and in fact by awarding the Appellant damages for unfair termination, salary in lieu of notice, severance pay, annual leave days and compensation for wrongful termination while the respondent was admittedly not a permanent employee. i. THAT the Learned Magistrate erred in law and in fact by arriving at a decision that was not supported by evidence. 3 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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j. THAT the Learned trial Magistrate erred on all points of facts and law applicable. 4. Consequently, the Appellant prayed for the following orders:i. THAT this appeal be allowed. ii. THAT the awards for pay in lieu of notice, severance pay, annual leave dues and compensation for wrongful termination as made by the trial court vide the impugned judgement of 31st May 2023 be set aside and/or vacated. iii. THAT the Respondent's entire claim be dismissed with costs. iv. 5. THAT the Appellant be awarded costs of the appeal. Pursuant to the directions of the court, the appeal was disposed of by way of written submission. The Appellant’s submission are dated 9th June 2026 while the Respondent’s submissions are dated 19th May 2026. Analysis 6. This being a first appeal, this court is guided by the principles espoused in several decisions among them, Selle & Another v Associated Motor Boat Co. Ltd &Another (1968) EA 4 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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123, to re-evaluate and re-examine the evidence adduced in the trial court in order to reach its own finding, taking into account the fact that this court had no opportunity of hearing or seeing the parties as they testified. 7. Vide the Statement of Claim dated 23rd December 2020, the Claimant (now the Respondent), sued the Appellant for compensation arising from the alleged unfair termination of his employment and for payment of terminal dues. 8. The Claimant averred that the Appellant employed him as a general worker at a salary of Kshs. 16,563.42. He further averred that his employment was on permanent and pensionable terms. 9. He contended that the Appellant summarily and arbitrarily dismissed him on 1st September 2020 without just cause, notice or an opportunity to be heard. The Claimant stated that, upon dismissal, the Appellant did not pay him his dues, severance pay, benefits or salary arrears. 10. He maintained that his dismissal was ill-intentioned and unlawful and was tainted by illegality, malice and breach of the terms and conditions of his employment. 5 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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11. The Claimant therefore sought payment of the following terminal benefits owing to the alleged unfair termination of his employment:i. Two months’ salary in lieu of notice………….Kshs 33,126.84 ii. Severance pay for years worked……………Kshs 139,132.70 iii. Annual leave……………………………………...Kshs 39,752.20 iv. 12 months compensation for unfair termination……………………………..Kshs 198,761 Total……………………………………………...Kshs 410,772.74 12. He prayed for the following reliefs: a. A declaration that the action of dismissal of his employment was malicious, arbitral, unfair, unsubstantiated , unlawful, in breach of the law and unprocedural b. An award of maximum compensation provided by the law based on the unlawful dismissal and all the 6 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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due benefits, allowance due pays and severance as tabulated at paragraph 12 above. c. The general damages suffered as a result of the Respondent’s omission d. Costs and Interests. 13. In its Response to the Statement of Claim dated 29 th November 2021, the Appellant denied the Claimant’s allegations. The Appellant’s case was that the Claimant had been employed under successive fixed-term contracts, the final one running from 1st July to 31st August 2020. The Appellant therefore maintained that the contract expired by effluxion of time at the end of August 2020. 14. In response to the claim for pay in lieu of notice, the Appellant contended that the Claimant was not entitled to that payment because he had signed a notice with regard to the expiry of his fixed-term contract and was therefore aware of its end date. 15. The Appellant further stated that the Claimant was engaged periodically under fixed-term contracts, was never a permanent employee and was never contracted for more than 7 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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two months at a time. It denied that he was entitled to the unpaid leave dues claimed. 16. As to severance pay, the Appellant argued that the claim was unwarranted because the Claimant had not been declared redundant. On the claim for twelve months’ compensation, the Appellant averred that the Claimant was not entitled to the same as he had not been dismissed from employment but rather, his contract had expired. 17. In the end, the Appellant maintained that the Claimant had no reasonable cause of action against the Respondent and therefore urged the trial court to dismiss the claim with costs. 18. At the hearing, the Claimant, Shadrack Muguna Navade, testified as CW1 on 20th April 2022. He adopted his witness statement dated 23rd December 2020 as his evidence in chief and relied on the documents he had filed in support of his claim. 19. On cross-examination, the Claimant stated that he had no fixed-term contract and had never signed one. He testified that he had worked as an acting supervisor, acting clerk and acting field educator and that he was last paid in August 2020. 8 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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20. The Appellant called Pius Kimutai Kogo, its supervisor, who testified as RW1. He adopted his witness statement dated 21 st January 2022 as his evidence in chief. 21. RW1 testified that the Claimant had worked as an acting supervisor and acting clerk in tea plucking, and that his contracts ranged from one to six months. He stated that the Claimant was paid his dues throughout his employment and took leave when it fell due. According to RW1, the Claimant’s last contract expired on 31st August 2020 and was not renewed because he had been declared redundant. 22. On cross-examination, RW1 stated that he had worked for the Appellant since 2004 and that the Claimant was already working there when he joined. 23. After the close of the hearing, the trial court directed the parties to file written submissions. 24. Thereafter, the trial court in its judgment found that the Claimant had been employed on permanent and pensionable terms on the basis that he could not have worked for twelve years as a casual employee under fixed-term contracts. It therefore held that the termination of the Claimant’s employment was procedurally unfair and unlawful. The 9 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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Claimant was consequently awarded Kshs. 33,126 as two months’ salary in lieu of notice, Kshs. 139,132 as severance pay, Kshs. 39,752 as annual leave dues for three years and Kshs. 198,761 as twelve months’ compensation for unfair termination. The Claimant was also awarded costs and interest. 25. The Appellant now challenges that judgment on appeal. The Appellant’s submissions 26. In its submissions, the Appellant condensed the grounds of appeal into the following three issues: i. Whether the learned trial Magistrate erred in law and fact by treating the Respondent as a permanent employee entitled to statutory reliefs under the Employment Act, 2007. ii. Whether the cessation of employment constituted an unlawful termination or a lawful expiry of a contract by effluxion of time. iii. 27. Whether the Respondent deserved the reliefs granted. On the first issue, the Appellant submitted that the learned magistrate fell into error in converting the Respondent's 10 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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employment from fixed term contract to permanent and pensionable without legal justification. The Appellant asserted that it employed the Respondent on a temporary, contractual basis explicitly governed by a Fixed-Term Contract, which was produced in evidence before the trial court. 28. According to the Appellant, despite this clear documentary evidence, the trial court granted reliefs reserved exclusively for permanent staff, completely disregarding the explicit terms of the contract agreement. 29. In this regard, the Appellant submitted that it established principle of law agreements that courts must as is an enforce written by the parties and cannot rewrite employment terms to confer permanent status where none was intended. In support of this position, the Appellant cited the Court of Appeal of decision in Registered Trustees the Presbyterian Church of East Africa & Another v Ruth Gathoni Ngotho-Kariuki [2017] eKLR, which affirmed that parties are bound by the terms of their contracts and courts have no jurisdiction to vary clear contractual tenures. 11 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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30. It is the Appellant’s submission that the various contracts exhibited in this case were not for an indefinite period of time but had a date when they were each to end thus qualified as fixed term contracts. 31. The Appellant submitted that the learned magistrate seemed to have invoked the provisions of Section 37(4) of Employment Act yet the dispute before the trial court was not about conversation of the terms of employment of the Respondent from a "casual worker" to a contract term. 32. It is submitted that the learned magistrate ought to have first analyzed the nature of contract held by the Respondent and the effect of effluxion of time in such a contract. 33. On the second issue whether the cessation of employment constituted an unlawful termination or a lawful expiry of a contract by effluxion of time, the Appellant submitted that the employment relationship was governed by fixed-term contracts which expired by effluxion of time. It relied on the decision in Transparency International – Kenya v Omondi (Civil Appeal 81 of 2018) [2023] KECA 174 (KLR) and argued that the contracts produced by both parties at the trial each ran for no more than two months, consistent, in its 12 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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submission, with the nature of employment contracts in the tea sector. 34. The Appellant also submitted that the Respondent placed no evidence before the trial court showing that he had acquired permanent and pensionable status. It cited Ngokonyo & 2 others v Telkom Kenya Limited (Petition E009 of 2025) [2025] KESC 75 (KLR), in which the Supreme Court described permanent and pensionable employment as offering a higher degree of stability through long-term engagement, structured benefits and predictable retirement planning. 35. According to the Appellant, those features were absent in the Respondent’s employment. It therefore contended that the learned trial magistrate erred in finding that the Respondent was a permanent and pensionable employee who ought to have been given notice of termination. 36. The Appellant further submitted that the learned trial Magistrate erred in law and fact by completely failing to evaluate the Appellant's evidence and submissions. Relying on Order 21, rule 4 of the Civil Procedure Rules, it submitted that the judgment did not frame the issues for determination 13 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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or give reasons for the decision. In its view, the magistrate’s statement that he had considered the parties’ evidence was insufficient. 37. The Appellant consequently contended that the trial court had neither properly evaluated the evidence nor considered the parties’ submissions and urged this Court to interfere with the judgment. 38. Lastly on the issue whether the Respondent deserved the reliefs granted, the Appellant submitted that since the Respondent’s employment was governed by fixed-term contracts which expired by effluxion of time, the trial court erred in awarding the reliefs sought. 39. With regard to the award of 12 months’ salary as compensation for unfair termination, relying on section 49 of the Employment Act which provides remedies only where a court has first found a termination to be unfair or unlawful, the Appellant submitted that the trial court made no finding, supported by an analysis of the evidence and the law, that the Respondent had been unfairly terminated. In support of that submission, the Appellant relied on Kenfreight (EA) Limited v Nguti (Petition 37 of 2018) [2019] KESC 79 14 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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(KLR) for the proposition that a court considers the remedies under section 49 after finding that an employee’s termination was unfair or unlawful. 40. The Appellant maintained that the Respondent’s contracts ended on their stated expiry dates and that their expiry did not amount to unfair or unlawful termination. It argued that the remedies under section 49 were therefore unavailable and ought not to have been awarded. 41. Finally, the Appellant urged this Court, as a first appellate court, to re-evaluate the evidence before the trial court and reach its own conclusions on the facts and the law. It relied on Peters v Sunday Post Limited [1958] EA 42, as cited in Manji v Khasiani (Civil Appeal 114 of 2018) [2022] KEHC 10242 (KLR). 42. The Appellant therefore urged the Court to allow the appeal, set aside the awards for pay in lieu of notice, severance pay, annual leave dues and compensation for wrongful termination made in the judgment of 31st May 2023, dismiss the Respondent’s claim with costs and award the Appellant the costs of the appeal. 15 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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The Respondent’s submissions 43. In his submissions, the Respondent identified the sole issue for determination to be whether the learned trial magistrate properly exercised his discretion in awarding compensation and other reliefs for unfair and unlawful termination. 44. The Respondent submitted that his employment was terminated summarily and that when he inquired about the termination, he was served with a letter dated 10 th September 2020 indicating that a hearing had been conducted and independent investigations concluded. 45. The Respondent submitted that during the trial, the Appellant’s Human Resource Officer admitted that the actual reason for the cessation of his employment was lack of work. 46. The Respondent further submitted that, if the reason for termination was misconduct arising from the investigations, he ought to have been afforded the safeguards under section 41 of the Employment Act which include being informed of the accusations against him, being given a disciplinary hearing and being allowed to be accompanied by a fellow employee or a shop floor union representative of his choice. 16 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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He contended that no such process was undertaken. In support of his position, the Respondent relied on Ndungu v Safaricom Limited (Cause E012 of 2022) [2024] KEELRC 1801 (KLR). 47. The Respondent submitted that, if the actual reason was lack of work, as the Appellant’s witness admitted, the termination amounted to redundancy and the mandatory procedure under section 40 of the Employment Act ought to have been followed. He argued that the Appellant issued no redundancy notices, did not involve the labour officer and did not demonstrate compliance with its statutory obligations concerning redundancy. 48. The Respondent submitted that the termination of his employment was therefore both procedurally and substantively unfair. 49. The Respondent further submitted that he had served the Appellant continuously from 2008 until September 2020, when his employment was summarily terminated. He relied on the decision in Gichuki v Kenya Power & Lighting Company Plc [2025] KEELRC 2578 (KLR) and submitted that his engagement by the Appellant under successive short17 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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term contracts for more than twelve years, followed by the abrupt termination of his employment, was unfair and violated his right to fair labour practices under Article 41 of the Constitution of Kenya. 50. The Respondent submitted that the awards made by the learned trial magistrate were therefore a proper exercise of judicial discretion, having regard to his length of service, the manner in which his employment was terminated and the Appellant’s failure to comply with the applicable statutory safeguards. 51. It is the Respondent’s submission that the Appellant had failed to demonstrate any misdirection in law, misapprehension of the evidence or improper exercise of discretion that would justify interference with the trial court’s decision. 52. The Respondent accordingly urged this Court to find that the learned trial magistrate properly exercised his discretion in awarding compensation and other reliefs and to dismiss the appeal with costs to the Respondent. Determination 18 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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53. I have considered the Appellant’s Record of Appeal, the supplementary Record of Appeal as well as the submissions by both parties. The grounds of appeal may be summarized into the following issues for determination: i. Whether the trial court erred in its finding on the nature of the Respondent’s employment ii. Whether the Respondent’s employment ended through the expiry of a fixed-term contract or by unfair termination iii. Whether the reliefs awarded were justified Whether the trial court erred in its finding on the nature of the Respondent’s employment 54. The Respondent maintained that he worked continuously for the Appellant for approximately twelve years and denied signing a fixed-term contract. From the documentary evidence on record, the Respondent produced eighteen letters of appointment (in acting capacity) and a copy of an employment contract. The Appellant also relied on fixed-term 19 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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contracts, including the final contract stated to run from 1 st July to 31st August 2020. 55. The question is what those documents provided and whether the evidence established that their terms had been varied or replaced by an appointment on permanent and pensionable terms. 56. The evidence of lengthy service, including RW1’s testimony that the Respondent was already working for the Appellant when RW1 joined it, established that the parties had a longstanding employment relationship. It did not, without evidence to that effect, establish that the Respondent had acquired permanent and pensionable status. 57. Section 37 of the Employment Act provides for the conversion of casual employment into term employment contract. The Respondent’s case, as disclosed by the documentary evidence, concerned successive written appointments and an employment contract. 58. In its judgment, the trial court inferred permanent and pensionable status of the Respondent’s employment based on the duration of the employment relationship between the parties herein. 20 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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59. In the case cited by the Appellant, Transparency International - Kenya v Omondi [2023] KECA 174 (KLR), the Court of Appeal held as follows:“20. There is no dispute that the respondent was employed by the appellant on a two- year fixed term contract from October 1, 2010 to September 30, 2012. It is trite law that a fixedterm contract of employment is a lawful mode of employment with a start and end date. 21. The pertinent question in this appeal is whether, once the fixed term contract comes to an end, can it be termed as dismissal or unfair termination? In other words, could the nonrenewal of the contract of employment create a legitimate expectation that is capable of enforcement through an award of damages? 22. We note in a case whose central issue for determination was whether an employer in case of fixed term contract had an obligation to justify the termination, Justice J Rika expressed himself in cause 368 [N] of 2009 Anne Theuri v Kadet Limited [2013] eKLR as follows: “There was nothing in 21 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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the evidence of the claimant that required the respondent to renew her contract…. there would be no justification in seeking notice pay, while the claimant was all the time aware that she was on a 3 year contract, with specific starting and ending dates.” 10. The reasons given by the respondent for its decision not to renew the claimant’s contract, have no relevance to this dispute. Once a fixed term contract is at an end, the employer has no obligation to justify termination on other grounds beyond the lapse of the fixed period…. It was the prudent thing for the claimant not to plead damages for unfair termination, because in the circumstances of this case, termination was mutual and in conformity to the terms of the expiring contract…... It would be advisable for the claimant to contact the respondent, clear out, discuss and agree on any other dues that may be payable under the expired contract. She was invited to do this before coming to court, but did not avail herself, opting instead to pursue her claim without sufficient legal or factual grounds.” 23. In another case in which the main issue for determination was whether the respondent legitimately expected the 22 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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contract to be renewed after the lapse of the contract period, Justice Rika, in Margaret A Ochieng v National Water Conservation& Pipeline Corporation [2014] eKLR held that: “Automatic renewal would undermine the very purpose of the fixed-term contracts of contract, and revert to employment……. courts have indeterminate upheld the principle that fixed-term contracts carry no expectancy of renewal, in a catena of judicial authorities…… the court is persuaded that the claim has no merit. The fixed term contract had its own in-built termination notice, in that the date of termination was advised to the claimant on execution of the three-year contract in December 2008. She knew termination would be upon the lapse of the three years in 2011…” 24.We quote the above findings of the learned judge with approval and hold that there are no reasons that we can discern, that would make one depart from those findings. Indeed, the doctrine of legitimate expectation does not arise in the renewal of a fixed-term contract and its non-renewal cannot constitute unfair termination or dismissal. Having noted that the respondent was in employment under a fixed23 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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term contract and that the contract came to an end at the appointed time, we are of the view that any relief sought by the respondent on basis of her assertion that her employment was unfairly terminated was automatically not available to her. The Court of Appeal decision in Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho [2017] eKLR lends credence to our holding, where the court pronounced itself, thus: “29. Bearing the foregoing in mind, we note that fixed term contract carries no rights, obligations, or expectations beyond the date of expiry. Accordingly, any claim based after the expiry of the respondent’s contract ought not to have been maintained. This is in relation to the salary of the months 5th of April up to May, 2010. Similarly, since the respondent’s contract came to an end by effluxion of time any claim for wrongful termination could not be maintained.” 25. This issue was also addressed in the case of Francis Chire Chachi v Amatsi Water Services Company Limited, [2012] eKLR in which the court stated that; “This court has recently stated that employers are not under any obligation to give employees reasons for non-renewal of fixed term contracts, 24 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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unless there is such an obligation created in the expiring contract.” 26. The same sentiments were also echoed in the Court of Appeal case of Registered Trustees De La Salle Christian Brothers T/A St. Mary’s Boys’ Secondary School v Julius D M Baini [2017] eKLR as follows: “In the view of the court, there is no obligation on the part of an employer to give reasons to an employee why a fixed-term contract of employment should not be renewed. To require an employer to give reasons why the contract should not be renewed, is the same thing as demanding from an employer to give reasons why, a potential employee should not be employed. The only reason that should be given is that the term has come to an end, and no more.… Reasons, beyond effluxion of time, are not necessary in termination of fixed-term contracts, unless there is a clause in the contract, calling for additional justification for the termination. This position has also been restated in Francis Chire Chachi v Amatsi Water Services Company Limited, [2012] eKLR as follows: “This court has recently stated that employers are not under any obligation to give employees reasons for non-renewal of fixed term 25 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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contracts, unless there is such an obligation created in the expiring contract.” Section 35 (2) of the Act provides for termination of employment by notice and where the notice is greater than one month then the same should be applicable. In Ruth Gathoni Ngotho-Kariuki v Presbyterian Church of East Africa and Presbyterian Foundation [2012] eKLR which was cited by the respondent, failure to give the notice led to the judge inferring automatic renewal of the fixed term contract. Accordingly, the necessary timelines for the communication of the decision not to renew the contract need to be upheld. The trial judge did not inquire as to whether there was any obligation in the contract or the timelines adhered to but nevertheless made a finding to the effect that the claimant was entitled to two months’ pay in lieu of notice as per the contract of service. We agree with the trial judge in this respect.” … Whether a contract with a renewal clause will be extended or not, is an issue that is at the discretion of the employer and it cannot create a legal right under the doctrine of legitimate expectation.” 26 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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60. The Respondent relied on Gichuki v Kenya Power & Lighting Company PLC [2025] KEELRC 2578 (KLR) to argue that his engagement under successive short-term contracts for over twelve years was an unfair labour practice. Successive contracts do not automatically confer permanent and pensionable status. 61. I therefore find that the Respondent’s length of service and successive appointments did not convert his fixed-term employment into permanent and pensionable employment. The trial court’s inference of permanent and pensionable status from the length of the employment relationship between the parties herein was therefore erroneous. 62. The finding of permanent and pensionable status is set aside. Whether the Respondent’s employment ended through the expiry of a fixed-term contract or by unfair termination 63. The Appellant’s case was that the Respondent’s last contract expired on 31st August 2020. On his part, the Respondent contended that he was summarily dismissed on 1 st September 2020. He relied on the letter dated 10th September 2020 attached to his bundle of documents. 27 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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64. I have examined the stated contents of that letter. It was headed “Grievance” and it informed the Respondent that, following his complaint and a hearing held on 28 th August 2020, an independent investigation had been conducted and concluded on 4th September 2020. It further stated that the case was concluded and closed because the chairman had found no reason to confirm the allegations. 65. In my view, that letter addressed the Respondent’s grievance. It did not notify him of dismissal, communicate allegations of misconduct against him or state that his employment had been terminated following a disciplinary hearing. 66. The said grievance letter therefore cannot support a finding that the Appellant dismissed the Respondent for misconduct or that it was required, in connection with that letter, to conduct a disciplinary hearing under section 41 of the Employment Act. 67. RW1 testified that the final contract expired on 31 st August 2020 and was not renewed because there was no work, describing the Respondent as having been declared redundant. The existence of insufficient work may explain an employer’s decision not to offer another contract after a fixed 28 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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term expires. It does not, without proof that the employer terminated an existing contract on account of redundancy, establish that a redundancy occurred under section 40 of the Employment Act. 68. The Respondent did not establish that the Appellant ended the final contract before its agreed expiry date or that he continued working after 31st August 2020 under a further appointment. 69. On the evidence presented, the final fixed-term contract reached its stated end date and was not renewed. RW1’s explanation for non-renewal does not convert that expiry into a termination on account of redundancy. 70. It therefore follows that the trial court erred in finding that the Respondent’s employment was unfairly terminated. Whether the reliefs awarded were justified 71. As mentioned earlier in this judgment, the trial court awarded the Respondent the reliefs he sought in his Statement of Claim. I will address these awards in separate heads as hereunder: - 29 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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i. Pay in lieu of notice The claim for two months’ salary in lieu of notice was founded on the allegation that the Appellant terminated the Respondent’s employment without notice. The final contract ended on its agreed date. No term requiring two months’ notice of non-renewal was established. The award of Kshs. 33,126 in lieu of notice is therefore set aside. ii. Severance pay Severance pay under section 40 of the Employment Act arises upon termination on account of redundancy. Although RW1 referred to a lack of work when explaining why no further contract was offered, the evidence did not establish the termination of an existing contract on account of redundancy. The award of Kshs. 139,132 as severance pay is therefore set aside. iii. Compensation for unfair termination 30 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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Having found that the final contract expired rather than being unfairly terminated, I set aside the award of Kshs. 198,761 as compensation. iv. Annual leave dues The expiry of a fixed-term contract does not extinguish leave already earned but not taken or paid for. The Respondent claimed leave dues, while RW1 asserted that he took leave whenever it fell due. The pay slips produced by the Respondent such as the ones for March, 2018, April, 2018, May, 2018, September, 2018, October, 2018 reflect payment for leave. The other pay slips also reflect payment of leave dues. Further, the contract signed by the Respondent provides for leave as follows: Leave shall accrue at the rate of 2 days per month in accordance with the CBA and shall be paid on termination of the contract.” 31 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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For the foregoing reasons the Respondent is not entitled to pay in lieu of leave. The award in respect thereof is accordingly set aside. 72. In the upshot, the appeal accordingly succeeds. The findings that the Respondent was a permanent and pensionable employee and that his employment was unfairly terminated are set aside. The awards for pay in lieu of notice, annual leave, severance pay and compensation for unfair termination are also set aside. 73. Having found as above, I set aside the entire judgment of the Trial Court and substitute therewith an order dismissing the suit. 74. Each party shall bear its own costs of the appeal. 75. Orders accordingly. DATED, SIGNED AND DELIVERED ON THIS 1ST DAY OF OCTOBER, 2026 MAUREEN ONYANGO JUDGE 32 ELD ELRCA NO. E014 OF 2023 JUDGMENT

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