The appeal arises from the judgment delivered on 8 May 2025 in Mombasa CMELRC No. E760 of 2021. The appellant is seeking that the judgment be set aside on the grounds that the learned magistrate erred in law and fact in finding that the respondent’s last contract of employment created a legitimate expectation that it would be renewed. The non-renewal of the contract notice dated 25 March 2020 was served on 28 April 2020, not on 28 March 2020. The trial court failed to find that the non-renewal of the contract notice dated 25 March 2020 was altered to favour the appellant’s case without evidence to support that finding.
Other grounds of appeal are that the trial magistrate erred in law and fact in finding that the respondent’s employment was terminated unfairly. The award of 4 months'' salary in compensation, along with one month''s notice pay, and half of the costs, was not justified.
The background to the case is a claim filed by the respondent against the appellant. His case was that he was employed by the appellant in August 2005 as a lorry driver earning KS. 15,000. On 25 March 2021, he reported to work, and the human resources manager informed him that his employment had been terminated. There was no prior notice or reasons to justify such action. He claimed that there was unfair and unlawful termination of employment. He claimed the following terminal dues;
- One month''s notice pay KSh. 15,000.
- Salary for March 2020 Ksh. 15,000.
- 12 months'' compensation Ksh. 180,000.
- Costs of the suit.
In response, the appellant denied the claims and that the respondent was employed on a renewable contract running from 1 January 2020 to 31 March 2020. There was no termination of employment as alleged. The fixed-term contract came to an end and was not renewed. There was no obligation to renew it. The respondent was notified at the end of his fixed-term contract. The claims made were not justified.
The learned magistrate heard the parties and held that fixed-term contracts carry no obligation or expectation for renewal. However, where there is a renewable clause, it creates an expectation of renewal on the part of the employee. Where the employer makes a legitimate expectation that the contract will be renewed, the law deems the employee to have been unfairly terminated if there is no renewal.
The trial court found that there was unfair termination of employment and made the awards that the appellant challenges.
This being a first appeal, the court is allowed to review the record, reassess the findings and make its conclusions.
It is not in dispute that the respondent was under a fixed-term contract ending on 31 March 2020. It had a clause allowing for renewal, but the appellant did not offer to renew it. The respondent, too, did not apply for renewal of the contract.
The fixed-term contracts are valid and lawful forms of employment as held in Gyto Success Company Limited v Dalu [2025] KEELRC 587 (KLR) and the case of Kesi v Krystalline Salt Limited [2025] KEELRC 1097 (KLR). The contracts of employment issued to the respondent are lawful.
A fixed-term contract starts and ends on its terms. It creates no obligation or legal duty upon the employer to give reasons or notice upon its lapse.
In the case of Keen Kleeners Limited v Kenya Plantation and Agricultural Workers'' Union (Civil Appeal 101 of 2019) [2021] KECA referenced the case of Teresa Carlo Omondi v Transparency International-Kenya [2017] Eklr, where the Court held:
In legitimate expectation claims, the burden of proof is always on the Employee. It must be shown that the Employer, through regular practice or an express promise, leads the Employee to expect that there would be renewal legitimately. The expectation becomes legally protected and should not be ignored by the Employer when managerial prerogative is exercised. Legitimate expectation is not the same thing as anticipation, desire or hope. It is a principle based on a right, grounded on the larger principles of reasonableness and fair dealing between Employers and Employees. The Employee must demonstrate some rational and objective reason for her expectation. The representation underlying the expectation must be unambiguous. The decision maker must induce the expectation. The decision maker must have the authority to renew. Repeated renewals, extended service beyond the period provided for in the fixed-term contract, and a promise of renewal are some elements that would amount to objective reasons underlying the expectation of renewal. However, the presence of these elements is not to be taken as conclusive proof of legitimate expectation.
In this case, there is no evidence that the appellant created any expectation in the respondent that his contract would be renewed. No promise or conduct suggests that the court would be renewed.
In his evidence before the trial court on 25 June 2024, the respondent admitted that he was aware of being on a fixed-term contract. The last contract started on 1 January 2020 and ended on 31 March 2020. He signed the contract in acceptance of the terms.
In this case, employment started and ended on the agreed-upon terms and conditions. The findings that the appellant had created a legitimate expectation upon the respondent that his contract would be renewed were in error. There is no evidence of any matter creating such an expectation.
The appeal has merit.
Judgment in Mombasa CMELRC No. 760 of 2021 is hereby set aside. Costs to the appellant.
Delivered in open court at Mombasa, this 23rd day of October 2025.
M. MBARŨ
JUDGE
In the presence of:
Court Assistant: Japhet
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