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ELRCPartially AllowedNot stated on the face of the judgment (appeal from Kaloleni CMELRC No. E023 of 2021)

Tarmal Wire Products Limited v Munguti (Appeal E011 of 2024) [2024] KEELRC 1559 (KLR)

Employment and Labour Relations Court
13 June 2024
1,903 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that a fixed-term contract that simply expires is not unfair termination, and NSSF-registered employees cannot claim service pay.

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 at Mombasa against the judgment of the learned magistrate in Kaloleni CMELRC No. E023 of 2021 delivered on 14 February 2024. The respondent had claimed leave allowances, service pay, 12 months' compensation and a certificate of service, alleging unfair termination on 9 November 2020 after returning from sick leave. The trial court found unfair termination for want of due process under Section 41 of the Employment Act and awarded 12 months' compensation of Ksh. 229,560, service pay of Ksh. 76,560, a certificate of service and costs. The appellant contended that the respondent was on fixed-term contracts, the last expiring on 5 November 2020, which simply lapsed by effluxion of time, and that service pay was in any event barred by NSSF registration. Mbaru J identified twin issues: unfair termination and service pay. On termination, the court held that while a fixed-term contract is lawful, the respondent, who was on sick leave when his contract lapsed, produced no medical certificate as required by Section 30 of the Act to support a legitimate expectation of renewal; the trial court's reliance on Teresa Carlo Omondi was erroneous since the Court of Appeal had overturned it. Employment was terminated lawfully and compensation was unjustified. On service pay, the respondent's admission of NSSF registration, coupled with his concession on the second ground, rendered the award unjustified. The appeal was allowed, the trial judgment set aside, and each party ordered to bear its own costs.

Questions the Court framed

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

  1. 1.Whether the trial court erred in holding that the respondent's employment was unfairly terminated
  2. 2.Whether the respondent was entitled to service pay

Key legal issues

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01

Whether non-renewal of a fixed-term contract constituted unfair termination

Holding

Non-renewal was lawful; the trial court erred in finding unfair termination under Section 41

Reasoning

Fixed-term contracts are lawful and valid under Section 10(3) of the Employment Act. The respondent's last contract lapsed on 5 November 2020. Although the respondent claimed a legitimate expectation of renewal based on successive renewals, he was on sick leave from 2 November 2020 and produced no medical certificate to justify his absence and support the expectation of renewal. The trial court's reliance on Teresa Carlo Omondi was misplaced as that decision had been overturned by the Court of Appeal, which binds this court.

p. 4
02

Whether the respondent was entitled to service pay

Holding

Service pay was not payable because the respondent was registered with NSSF

Reasoning

Under Section 35(5) and (6) of the Employment Act, an employee who has enjoyed statutory deductions (NSSF) is not entitled to service pay. The respondent admitted in evidence that he was registered with NSSF, and the record contained evidence of that registration. The respondent also conceded the second ground of appeal. The trial court's finding that the employer had not remitted NSSF dues did not justify the award in these circumstances.

p. 4

Legal principles established

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  • A fixed-term contract does not create any legitimate expectation for renewal; each contract has a start and end date
  • An employee who takes sick leave must, upon resuming duty, submit a medical certificate under Section 30 of the Employment Act, 2007
  • On a first appeal the court re-evaluates and re-assesses the record while bearing in mind that the trial court heard the witnesses

Court orders

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  1. 1.The appeal is allowed with merit
  2. 2.Judgment in Kaloleni CMELRC No. E023 of 2021 is set aside
  3. 3.Each party bears its own costs

The bench

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

majority

Wrote the judgment

On appeal from
Principal Magistrate's Court, Kaloleni (ELRC)
CMELRC No. E023 of 2021
Jurisdiction invoked
First appellate jurisdiction over the trial court's judgment in Kaloleni CMELRC No. E023 of 2021

Relief refused

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12 months' compensation for unfair termination awarded by the trial court

Employment terminated lawfully upon expiry of the fixed-term contract; no legitimate expectation of renewal absent a medical certificate accounting for the sick leave absence

p. 4

Service pay awarded by the trial court

Respondent was registered with NSSF and admitted the same; awarding service pay is not justified

p. 4

Costs

Each party bears its costs (each party to meet its own costs).

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.

Accordingly, the appeal is with merit and is allowed. Judgment in Kaloleni CMELRC No. EO22 of 2021 is hereby set aside. Each party bears its costs.
p. 4Final orders/disposition
a fixed-term contract docs not create any legitimate { expectations for renewal. Each contract has a start and end date.
p. 4Legitimate expectation and fixed-term contracts
an employee who is lawfully out of work due to illness or sickness, upon resuming duly is required to submit a Medical Certificate under the provisions of Section 30 of the Act.
p. 3Duty to submit medical certificate after sick leave

Issues in the judgment

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material

Internal inconsistency: the final orders set aside judgment in 'Kaloleni CMELRC No. EO22 of 2021' whereas the judgment appealed from is elsewhere described as Kaloleni CMELRC No. E023 of 2021

minor

The names of the parties to the appeal are not stated anywhere in the judgment as reproduced; the parties are identified only by role

minor

Paragraph numbering repeats: two consecutive passages are numbered 26

minor

Costs order stated inconsistently ('each party to meet its costs' vs 'Each party bears its costs')

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, "Tarmal Wire Products Limited v Munguti (Appeal E011 of 2024) [2024] KEELRC 1559 (KLR)", Case Analysis (2024). Not stated on the face of the judgment (appeal from Kaloleni CMELRC No. E023 of 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1559/eng@2024-06-13

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