Ashleys Kenya Ltd v Opiyo (Appeal E357 of 2025) [2026] KEELRC 2441 (KLR)
The bottom line
#Kenya's Employment Court confirmed that treating a former consultant like an employee makes them one, but slashed compensation to one month's salary.
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 relationship between the parties after lapse of the consultancy agreement on 31 December 2023 was employment under the Employment Act or a contract for services
- 2.Whether the termination of the respondent on 2 February 2024 was substantively and procedurally fair under sections 35, 41, 43 and 45 of the Employment Act
- 3.Whether the compensation award of six months' salary by the trial court was justified
- 4.Whether costs should follow the cause
Key legal issues
#Contract for services versus fixed-term contract of service
Although the parties engaged under a consultancy contract for services expiring 31 December 2023, their post-lapse conduct converted the relationship into employment protected by the Act.
The consultancy contract lapsed on 31 December 2023. Thereafter the employer suspended the respondent, required punctuality and adherence to workplace protocols, and engaged him orally until 2 February 2024. Under section 37 and sections 10(6) and (7), the failure to issue a written contract defining the relationship left the respondent a protected employee with rights under the Act.
Procedural fairness in termination
Termination without a disciplinary hearing after suspension was unfair and unprocedural, contrary to sections 35, 41, 43 and 45 of the Act.
The employer suspended the respondent on 24 January 2024 and issued a termination letter on 2 February 2024 without a hearing, without reasons being explained, and without giving him a chance to respond. The burden under sections 43 and 45 was not discharged. Procedural fairness is mandatory even for gross misconduct.
Quantum of compensation
The trial court's six months' compensation award was not justified; one month's compensation was appropriate given the respondent's poor work record and one month of service under the new arrangement.
Section 45(5) requires consideration of the employee's work record. A warning letter dated 20 September 2023 evidenced a poor record, and the respondent had served only one month after the consultancy agreement. The discretion under section 49 must be applied judicially; one month's salary was found appropriate.
Costs
Costs do not follow the cause under section 12(4) of the ELRC Act; absent reasons, each party to bear its own costs.
Under section 12(4) of the Employment and Labour Relations Court Act, costs follow the cause unless reasons are issued for a departure. No reasons were addressed, so each party was ordered to meet its own costs for both the appeal and the trial court.
Legal principles established
#- Where a fixed-term contract lapses and the employer continues to engage the employee under an open oral relationship subject to its control and direction, the employee acquires rights and benefits under the Employment Act under section 37.
- The duty to issue a written contract defining the nature of the employment relationship rests on the employer under section 10(6) and (7) of the Employment Act.
- Procedural fairness under sections 41 and 44 of the Employment Act is mandatory even where the employee has engaged in gross misconduct.
- The discretionary award under section 49 must be applied judicially, taking into account the employee's work record under section 45(5).
Court orders
#- 1.Employment terminated unfairly (declaration upheld)
- 2.Compensation reduced to Ksh. 25,000 (one month's salary)
- 3.Notice pay Ksh. 25,000
- 4.Each party to meet its own costs for the appeal and the trial court proceedings
- 5.Certificate of Service order left to stand as not contested
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Milimani Chief Magistrate's Court (ELRC)
- Nairobi CMELRC No. E440 of 2024
- Jurisdiction invoked
- First appeal to the Employment and Labour Relations Court from the trial magistrate's judgment (ELRC Appeal No. E357 of 2025)
Relief refused
#Six months' salary compensation awarded by the trial magistrate
The trial court did not justify the award; the respondent's poor work record and short service post-agreement warranted only one month's compensation
Costs
For the appeal and trial court proceedings, each party to meet its 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.
Being left under an open relationship and continuing with his duties, he acquired rights and benefits under the Act as held in Kenyatta University v Maina
The due process under Sections 41 and 44 of the Act is mandatory. Even where the employee has engaged in gross misconduct, procedural fairness is imperative.
Based on his poor work record, and the fact of the appellant failing to adhere to due process under the Act, a compensation of one month is hereby found appropriate.
Accordingly, judgment in Nairobi CMELRC E440 of 2024 is hereby reviewed in the following terms: a) Employment terminated unfairly. b) Compensation Ksh. 25,000. c) Notice pay Ksh. 25,000. d) For the appeal and trial court proceedings, each party to meet its costs.
Issues in the judgment
#The judgment states the appellant exercised a termination right 'by notice dated 2 February 2026', conflicting with the pleaded termination date of 2 February 2024.
The judgment at one point reverses the parties when describing the failure to inform of reasons.
The judgment is delivered on 31 August 2026 in an appeal numbered E357 of 2025 from a judgment said to be delivered 'on 30 September' (year not stated, contextually 2024), and describes the disposition as a 'review' of the trial judgment despite being a first appeal.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ashleys Kenya Ltd v Opiyo (Appeal E357 of 2025) [2026] KEELRC 2441 (KLR)", Case Analysis (2026). ELRC Appeal No. E357 of 2025 (from Milimani MCELRC No. E0440 of 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2441/eng@2026-08-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.