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ELRCPartially AllowedEmployment and Labour Relations Court Claim (Amended Memorandum of Claim dated 20th February 2025)· [2025] KEELRC 2836 (KLR)

Kipsang v Kenya Revenue Authority (Employment and Labour Relations Cause E666 of 2022) [2025] KEELRC 2836 (KLR)

Employment and Labour Relations Court
21 October 2025
6,838 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled KRA unfairly ended an employee's fixed-term contract by citing poor performance she clearly didn't have, awarding her over Kshs 1.2 million.

What this practically means

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Executive summary

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The claimant, employed by KRA on fixed-term contracts from 5th June 2018 to 28th February 2022, claimed she had a legitimate expectation that her contract would be converted to permanent and pensionable terms based on the respondent's NewsFlash publications of 13th November 2020 and 13th May 2021 setting out conversion criteria (two years' service, performance threshold, integrity). Her contract was not renewed by a letter of 28th February 2022 citing unsatisfactory performance. The respondent defended the separation as lawful expiry of a fixed-term contract, asserting the claimant was under active investigations for abuse of office and had unsatisfactory performance. The court found the non-renewal was not a mere effluxion of time because the respondent communicated reasons for it; that the claimant's performance was in fact excellent, as shown by commendations and her vacation from performance watch; that the respondent failed to exhibit her statements or the investigation findings, so the allegation of ongoing investigations was unproved; and that the non-renewal, contrary to the respondent's own express communication, amounted to unfair termination without a hearing. The court awarded the claimant 10 months' salary (Kshs 1,117,000) as compensation for unfair termination plus one month's salary in lieu of notice (Kshs 117,000), totaling Kshs 1,234,000 less statutory deductions, with costs and interest. General and exemplary damages for discrimination were not awarded. Judgment delivered virtually at Nairobi on 21st October 2025 by Hellen Wasilwa, Judge.

Key legal issues

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01

Whether the non-renewal of the fixed-term contract was in substance a termination

Holding

The court found that the non-renewal was a termination for unsatisfactory performance, not a mere expiry by effluxion of time, since the respondent communicated reasons for non-renewal

Reasoning

The court reasoned that if the contract had simply expired by effluxion of time, the respondent would have had no reason to communicate anything to the claimant. The non-renewal letter expressly stated the contract would not be renewed 'owing to your unsatisfactory performance', making the separation a termination on performance grounds rather than a natural expiry of a fixed-term contract.

p. 11
02

Whether the claimant's performance was unsatisfactory

Holding

The court found the claimant was an excellent worker with commendations, and the allegation of unsatisfactory performance did not stand

Reasoning

The claimant produced commendations dated 27th April 2021, 19/5/2021, 14/12/2021 and 7th February 2022 for exceeding targets, and a letter of 10th December 2021 vacating her from performance watch and commending her good work. The respondent's own witness conceded he had no evidence that her performance was below expectation and no record of unethical conduct. The non-renewal ground of unsatisfactory performance therefore failed.

p. 12
03

Whether a legitimate expectation of conversion to permanent and pensionable terms arose

Holding

A legitimate expectation arose from the respondent's bulletins setting out conversion criteria, which the claimant met

Reasoning

The respondent's bulletins of 13th November 2020 and 30th May 2021 announced conversion of fixed-term staff to permanent and pensionable terms based on service of two years or more, performance and integrity. The claimant had served over two years, had been vacated from performance watch, and the respondent failed to prove she was under investigation for unethical conduct. Applying the Supreme Court's CCK principles, her expectation was legitimate.

p. 13
04

Whether the respondent proved the claimant was under investigation for unethical conduct

Holding

The court found the respondent failed to exhibit the claimant's statements or the investigation findings, so the allegation of ongoing investigations was not proved

Reasoning

Although the respondent alleged the claimant was under investigation and recorded statements on 14/10/21 and 7/12/21, the statements were never exhibited and the investigation findings report was not produced in court. RW1 admitted there was no evidence of bribery and no record of unethical conduct. The claimant was also never served with a show cause letter.

p. 13
05

Whether the termination was unfair for want of a hearing

Holding

The claimant was unfairly terminated as she was not given an opportunity to be heard

Reasoning

Having found that the non-renewal was in substance a termination for non-existent reasons, the court held the claimant was not given an opportunity to be heard against the allegations, and was therefore unfairly and unjustly treated, entitling her to compensation under the Employment Act framework.

p. 13

Legal principles established

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  • An employer may exercise its prerogative not to renew a fixed-term contract, but it may not rely on falsehoods or reasons that do not exist to withhold renewal; doing so amounts to wrongful/unfair termination
  • Where an employer by express communication sets out criteria for conversion of fixed-term staff and the employee meets those criteria, a legitimate expectation of conversion arises

Court orders

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  1. 1.Award of 10 months' salary as compensation for unfair termination (10 x 117,000 = Kshs 1,117,000/-)
  2. 2.Award of 1 month's salary in lieu of notice (Kshs 117,000/-)
  3. 3.Total award of Kshs 1,234,000/- less statutory deductions
  4. 4.Respondent to pay costs of the suit plus interest at court rates with effect from the date of the judgment

Authorities

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Legislation

  • Constitution of KenyaArticle 47
  • Constitution of KenyaArticle 27
  • Constitution of KenyaArticle 41
  • Employment ActSection 5(3)
  • Employment ActSections 41, 43, 45 and 46
  • Employment ActSection 2
  • Employment ActSection 49
  • Employment ActSection 51(1)
  • Employment ActSection 5(1)
  • Public Officer Ethics ActSection 27(5)&(6)

Cases cited (4)

  • Communications Commission of Kenya & 5 Others v Royal Media Services & 5 Others
    Petition No. 14 of 2014; [2014] KESC 53 (KLR)
  • Margaret A Ochieng v National Water Conservation & Pipeline Corporation
    [2014] KEELRC 573 (KLR)
  • Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho-Kariuki
    [2017] KECA 194 (KLR)
  • Teresa Carlo Omondi v Transparency International-Kenya
    [2017] KEELRC 1624 (KLR)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Constitution Articles 41, 47 (employment and labour relations dispute)

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, "Kipsang v Kenya Revenue Authority (Employment and Labour Relations Cause E666 of 2022) [2025] KEELRC 2836 (KLR)", Case Analysis (2025). Employment and Labour Relations Court Claim (Amended Memorandum of Claim dated 20th February 2025). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2836/eng@2025-10-21

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