Tarmal Wire Products Limited v Munguti (Appeal E011 of 2024) [2024] KEELRC 1559 (KLR)
The bottom line
#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
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the trial court erred in holding that the respondent's employment was unfairly terminated
- 2.Whether the respondent was entitled to service pay
Key legal issues
#Whether non-renewal of a fixed-term contract constituted unfair termination
Non-renewal was lawful; the trial court erred in finding unfair termination under Section 41
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.
Whether the respondent was entitled to service pay
Service pay was not payable because the respondent was registered with NSSF
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.
Legal principles established
#- 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
#- 1.The appeal is allowed with merit
- 2.Judgment in Kaloleni CMELRC No. E023 of 2021 is set aside
- 3.Each party bears its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
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
#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
Service pay awarded by the trial court
Respondent was registered with NSSF and admitted the same; awarding service pay is not justified
Costs
Each party bears its costs (each party to meet its own costs).
Quotable passages
#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.
a fixed-term contract docs not create any legitimate { expectations for renewal. Each contract has a start and end date.
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.
Issues in the judgment
#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
The names of the parties to the appeal are not stated anywhere in the judgment as reproduced; the parties are identified only by role
Paragraph numbering repeats: two consecutive passages are numbered 26
Costs order stated inconsistently ('each party to meet its costs' vs 'Each party bears its costs')
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#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.