Kipsang v Kenya Revenue Authority (Employment and Labour Relations Cause E666 of 2022) [2025] KEELRC 2836 (KLR)
The bottom line
#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
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Respondent's conduct, communication, actions, practices, policies and/or representations created a valid and enforceable legitimate expectation that the Claimant's fixed-term contract would be converted to permanent and pensionable terms before its effluxion
- 2.Whether the Claimant fulfilled all the requirements set by the Respondent and was entitled to have her fixed-term contract converted to permanent and pensionable terms
- 3.Whether the failure to convert the Claimant's terms and/or the non-renewal of her contract was a termination/dismissal which was discriminatory, unprocedural, unfair and/or wrongful and/or unlawful and/or malicious
- 4.Whether the Claimant is entitled to the reliefs sought
- 5.Who should bear the costs of the claim
Key legal issues
#Whether the non-renewal of the fixed-term contract was in substance a termination
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
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.
Whether the claimant's performance was unsatisfactory
The court found the claimant was an excellent worker with commendations, and the allegation of unsatisfactory performance did not stand
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.
Whether a legitimate expectation of conversion to permanent and pensionable terms arose
A legitimate expectation arose from the respondent's bulletins setting out conversion criteria, which the claimant met
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.
Whether the respondent proved the claimant was under investigation for unethical conduct
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
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.
Whether the termination was unfair for want of a hearing
The claimant was unfairly terminated as she was not given an opportunity to be heard
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.
Legal principles established
#- 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
#- 1.Award of 10 months' salary as compensation for unfair termination (10 x 117,000 = Kshs 1,117,000/-)
- 2.Award of 1 month's salary in lieu of notice (Kshs 117,000/-)
- 3.Total award of Kshs 1,234,000/- less statutory deductions
- 4.Respondent to pay costs of the suit plus interest at court rates with effect from the date of the judgment
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Constitution Articles 41, 47 (employment and labour relations dispute)
Relief refused
#General and exemplary damages for discrimination, unfair administrative action and unfair labour practices (claimed at Kshs 10,000,000)
The court awarded only compensation for unfair termination and notice pay; no award of general or exemplary damages was made in the final orders
Costs
The respondents will pay costs of this suit plus interest at court rates with effect from the date of this judgment.
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.
From the onset, I wish to indicate that the claimant was not terminated because of afiuxion of time. If this were so the respondent would have had no reason to communicate the same to her.
It was indeed the prerogative of the respondents not to renew the contract but they could not rely on falsehood for the said purpose.
My finding is that the claimant was unfairly terminated. She was not given an opportunity to be heard and was therefore unfairly and unjustly treated.
Given the inhumane manner of informing her of the non renewal at the tail end and the expiration of the contract and for nonexistence reason I find 10 month’s salary as compensation for the unfair termination adequate
The respondents will pay costs of this suit plus interest at court rates with efiect from the date of this judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#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.