Oceanic Marine Surveyors Kenya Limited v Charles Ludenyo Musilwa

Elrc Appeal No. E062 Of 2026 Marine Surveyors Kenya Limited. Their work, however, existed only because the Appellant held, from the Association of Kenya Insurers (“AKI”), a contract to manage the Marine Cargo Surveillance Scheme, commonly referred to in the record as the “CSU contract”. Each of their contracts of service said as much, in terms. When AKI renewed the CSU contract, their contracts were renewed with it; when AKI signalled its expiry, they were told that their contracts would lapse with it, unless it was renewed. 2. On 20th December 2023, AKI informed the Appellant that its bid for a further term had been unsuccessful. The CSU contract ran its course and expired on 31st December 2023, and with it the engagement of every inspector in the unit. What followed was not one dispute but six. The Respondent, Charles Ludenyo Musilwa, and five of his former colleagues, all represented by the same firm of advocates, lodged separate claims against the Appellant: three before the Chief Magistrate’s Court at Mombasa and three before the Chief Magistrate’s Court at Milimani, Nairobi. Each alleged unfair 2

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Elrc Appeal No. E062 Of 2026 termination, and each sought, among other reliefs, notice pay, compensation and severance pay or gratuity. 3. Faced with the real prospect of courts in two cities pronouncing, possibly in contradictory terms, on precisely the same termination, the Appellant moved the trial court for an order that the Respondent’s suit be tried as a test suit on two specific questions, and that the other five suits be stayed to await its outcome. The application was not opposed, and the order was made. Yet when judgment came, the trial court declared that the Milimani matters would have to “proceed afresh”, and, on the merits, held that the Respondent had been declared redundant, unfairly so, and awarded him notice pay, severance pay and compensation. 4. This appeal therefore raises two distinct but interlocking sets of questions. The first is procedural: what is a test suit, how does it differ from consolidation, and could the trial court, in its final judgment and without any application before it, narrow the reach of an order it had made with the 3

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Elrc Appeal No. E062 Of 2026 concurrence of the parties? The second is substantive and goes to the heart of the employment relationship: where parties agree, in clear terms, that a contract of service shall be tied to, and shall end with, the life of a third-party contract, does the occurrence of that event amount to a termination by the employer, still less a redundancy? The answers to both questions will determine not only this appeal but, within the limits set out below, the fate of five other suits. B. BACKGROUND (a) The claim 5. By a Memorandum of Claim dated 8th May 2024, the Respondent instituted Mombasa MCELRC No. E264 of 2024 against the Appellant. He pleaded that he was engaged orally on 2nd February 2012 as a Cargo Surveillance Inspector, that he was issued with a written contract on 16th April 2014 for a period of twenty-one (21) months, and that his employment “continued” thereafter until 31st December 4

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Elrc Appeal No. E062 Of 2026 2023, when it was terminated. His last salary was pleaded at Kshs. 29,000 per month. 6. He pleaded that on 20th December 2023 the Appellant sent him an email stating that the AKI Secretariat had communicated that the contract had not been renewed and that the unit would be wound up by 31st December 2023, but that “no evidence was adduced” to him to that effect. He set out the particulars of the Appellant’s alleged wrong as terminating his employment without one month’s notice, without a hearing, without a show-cause letter, without adducing proof to him, failing to pay him severance pay or gratuity “if indeed … the work volume had reduced or no work”, and failing to pay him accrued leave. 7. He prayed for a declaration that the termination was unprocedural and unfair; one month’s salary in lieu of notice (Kshs. 29,000); twenty-one days’ accrued leave (Kshs. 40,990); severance pay or gratuity at fifteen days’ pay for ten years (Kshs. 145,000); twelve months’ compensation (Kshs. 348,000); a certificate of service; interest and costs. 5

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Elrc Appeal No. E062 Of 2026 (b) The response 8. By a Statement of Response dated 30th May 2024, the Appellant denied the claim. It pleaded that the Respondent was engaged under a contract dated 16th April 2014 for a specific project, namely the CSU contract which the Appellant had won to undertake on behalf of AKI; that it was expressly agreed that the Respondent’s contract was tied to the continuity of the CSU contract; that whenever AKI extended the CSU contract the Appellant informed the Respondent and extended his contract to match; that on 21st November 2023 the Respondent was reminded that the CSU contract would lapse on 31st December 2023 and that his contract would lapse with it unless the Appellant’s tender succeeded; and that upon AKI’s communication of 20th December 2023 Respondent’s that contract the bid stood was unsuccessful, terminated upon the the occurrence of the event contemplated by the parties. It denied that any notice pay, leave, severance pay or compensation was due. 6

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Elrc Appeal No. E062 Of 2026 (c) The application for a test suit and the order of 25th November 2024 9. On 7th November 2024, before the matter could proceed to its scheduled hearing on 10th December 2024, the Appellant filed a Notice of Motion under certificate of urgency, expressed to be brought under Rule 62 of the Employment and Labour Relations Court (Procedure) Rules, 2024 and section 12 of the Employment and Labour Relations Court Act. It sought orders that the Respondent’s claim proceed and act as a test suit “on the question of determination of fairness of termination of employment and payment of Severance Pay/Gratuity as claimed” in five other matters, namely: (a) Mombasa CM ELRC No. E581 of 2024, Christopher Wamalwa v Oceanic Marine Surveyors Kenya Limited; (b) Mombasa CM ELRC No. E474 of 2024, Stephen Kingoo Musyoki v Oceanic Marine Surveyors Kenya Limited; (c) Milimani CM ELRC No. E910 of 2024, Rebecca Namuria Wang’ele v Oceanic Marine Surveyors Kenya Limited; 7

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Elrc Appeal No. E062 Of 2026 (d) Milimani CM ELRC No. E1431 of 2024, James Maingi v Oceanic Marine Surveyors Kenya Limited; and (e) Milimani CM ELRC No. E1261 of 2024, Rhoda Kiske Okanga v Oceanic Marine Surveyors Kenya Limited; 10. It further sought that those suits be stayed pending the determination of the Respondent’s claim, and that “the final determination arising from this court … apply in the stated cases”. In the supporting affidavit sworn on 7th November 2024, the Appellant’s Managing Director, Alfred Musungu, deponed that all six claimants were Cargo Surveillance Inspectors engaged on the same project; that their contracts ended simultaneously upon AKI’s failure to renew; that they sought common reliefs; that they were represented by a single firm of advocates which had elected to file separate suits in separate courts; and that, the facts and issues being “precisely the same”, there was a real risk of contradictory findings. The memoranda of claim and responses in all the other suits were annexed. 8

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Elrc Appeal No. E062 Of 2026 11. The significance of the application lies as much in what it sought as in what it did not. It did not seek consolidation. It did not seek the transfer of any file from Milimani to Mombasa. It sought, with deliberate precision, that one suit be tried and that its outcome govern the others on two identified questions: the fairness of the termination (including the reliefs flowing from it) and severance pay or gratuity. 12. The application came up for hearing on 25th November 2024. Counsel for the Respondent informed the court that the other matters were at different stages in different courts and stated, in terms, that the application was not opposed. Her only request was that the orders operate prospectively, particularly on the question of costs. The learned trial magistrate allowed the application as prayed, it being unopposed, and extracted an order in the following material terms: “1. THAT the Claim herein do proceed and act as a test suit on the question of determination of 9

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Elrc Appeal No. E062 Of 2026 fairness of termination of employment and payment of severance Pay/Gratuity as claimed in the following other matters: [the five suits listed above] … 2. THAT the Suits listed in Paragraph 1 herein be and is hereby stayed pending the hearing and determination of this claim. 3. THAT the final determination arising from this Court as prayed in paragraph 1 herein to apply in the stated cases.” (d) The trial 13. The Respondent testified on 10th December 2024. He adopted his witness statement and produced his documents. Under cross-examination, he acknowledged that “this is a test suit” and that the claimants in the other five suits had been his colleagues, working as a team. He conceded that the Appellant had renewed their contracts each time AKI renewed the CSU contract, in 2017 and 2019; that clause 17 of his contract tied it to the contract with AKI; that “our 10

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Elrc Appeal No. E062 Of 2026 contract was terminated because AKI terminated contract with the respondent”; and that he never wrote to disagree with the Appellant’s earlier communication on the expiry of the CSU contract. In re-examination, he stated that he and his colleagues had written to the Appellant jointly asking for their termination packages, a service letter and recommendation letters, and that they were not called to a meeting. 14. The Appellant’s Managing Director testified on 25th March 2025, adopting his witness statement dated 13th March 2025 and producing the Appellant’s documents as exhibits 1 to 12. These included AKI’s letter of 25th September 2019 giving notice of the expiry of the 2018–2019 contract; the Appellant’s email of 2nd October 2019 to all CSU staff giving notice that their contracts would terminate on 31st December 2019 unless the CSU contract was renewed, in which event they would be automatically renewed; AKI’s letter of 22nd October 2019 renewing the CSU contract for the period 1st January 2020 to 31st December 2023; AKI’s letter of 3rd November 2023 giving notice of expiry on 31st 11

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Elrc Appeal No. E062 Of 2026 December 2023; the Appellant’s email of 21st November 2023 to all CSU staff; AKI’s letter of 20th December 2023 informing the Appellant that its proposal was unsuccessful; the Appellant’s email of the same day communicating that fact; the exchange of 29th December 2023; and the Respondent’s email of 5th February 2024 written on behalf of the “CSU Team”. 15. He testified that the Respondent’s contract was tied to the CSU contract, which was the Appellant’s “lifeline”; that the Appellant received AKI’s notice of non-renewal on 20th December 2023 and communicated it the same day; that none of the inspectors had been terminated, their contracts having run with the CSU contract; and that the company, though still in existence, had no work for them. 16. At the close of the Appellant’s case, the learned trial magistrate directed the filing of written submissions and, of her own motion, directed that “for the Milimani files arrangements be made to have them moved to Mombasa.” No party had applied for such transfer. At the mention of 3rd 12

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Elrc Appeal No. E062 Of 2026 July 2025, counsel for the Respondent informed the court that she had no information about the files at Milimani. (e) The judgment 17. In her judgment delivered on 12th March 2026, the learned trial magistrate recorded that the suit had been selected as a test suit on the question of the fairness of termination (including whether the claimants would be entitled to damages and/or notice pay) and severance pay or gratuity, and then stated: “The Milimani files have not been transferred to Mombasa. This judgement is only a test suit for the Mombasa matters. The other matters will have to proceed afresh in Milimani.” 18. On the merits, she framed the issue, somewhat curiously, as whether the Respondent’s termination “on retirement grounds” was procedural and fair, and whether he was an employee or an independent contractor. She set out section 41 of the Employment Act and the decision in Mary Chemweno Kiptui v Kenya Pipeline Company Limited [2014] 13

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Elrc Appeal No. E062 Of 2026 KEELRC 905 (KLR), recited at length the Appellant’s submissions on clause 17, and then concluded: “In the present case it is not disputed that the notice that the contract of the Claimant would not be renewed was sent to a group mail. The Labour Officer was not notified. The Claimant were declared redundant on account that the contract with AKI was not renewed. It was not the fault of the Respondent/employer. My finding is that the termination was unfair and unprocedural for failure to notify the Labour Officer and the Claimants in writing individually.” 19. She declined the claim for leave, the Respondent having utilised his leave, and awarded: a declaration that the termination was unprocedural and unfair; one month’s salary in lieu of notice, Kshs. 29,000; severance pay for ten years, Kshs. 145,000; three months’ salary as compensation, Kshs. 87,000; totalling Kshs. 261,000; a certificate of service; and costs and interest. 14

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Elrc Appeal No. E062 Of 2026 C. THE APPEAL 20. Aggrieved, the Appellant lodged a Memorandum of Appeal dated 26th March 2026, raising five grounds, namely that the learned magistrate erred in law and in fact: (1) by failing to determination follow the and failing procedure to for test determine suit and/or incorporate all the five claims ordered to constitute the test suit, leading to a miscarriage of justice; (2) in finding that the employment of the claimants was terminated on account of redundancy, while there was overwhelming evidence that their contracts lapsed on 31st December 2023 upon the occurrence of events contemplated by the parties; (3) in failing to find that the claimants had not discharged the burden of proving that their contracts were unilaterally and unfairly terminated by the Appellant; (4) in finding that the Respondent was entitled to one month’s salary in lieu of notice and severance pay for ten years on the basis of redundancy; and 15

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Elrc Appeal No. E062 Of 2026 (5) in awarding three months’ salary as compensation for unlawful termination, together with costs and interest. 21. It prays that the appeal be allowed, the judgment set aside, and the claims subject of the test suit be dismissed with costs. The appeal was canvassed by way of written submissions. D. THE PARTIES’ SUBMISSIONS (a) The Appellant’s submissions 22. In its written submissions dated 26th May 2026, the Appellant, through Ogembo & Associates, submitted on ground 1 that the six suits were pending in both Mombasa and Nairobi; that, magistrates’ courts being limited in their geographical jurisdiction, it was impossible to consolidate them before a single magistrate; and that it was precisely for that reason that a test suit, rather than consolidation, was sought. Reliance was placed on Mounde v Mekenye (Suing as the Administrator of the Estate of the Late Patrick Orosa Mekenye (Deceased)) & 9 others [2026] KEHC 2737 (KLR), where, jurisdictional limits precluding consolidation, the 16

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Elrc Appeal No. E062 Of 2026 court designated one matter as a test suit and stayed the others on the issue of liability. 23. It was urged that in a test suit the files remain separate and are merely stayed; that the order of 25th November 2024 made no provision for consolidation or merger of the files; that the order was never varied or reviewed; and that the trial court, by requiring transfer of the Milimani files as a condition for the application of its judgment and then confining its judgment to the Mombasa matters, conflated a test suit with a lead file in consolidated proceedings. The Appellant cited Order 38 Rule 1 of the Civil Procedure Rules for the proposition that, once satisfied that the issues in each suit are similar, the court directs that one suit be tried as a test case and stays all steps in the others until the selected suit is determined. 24. On grounds 2 and 3, the Appellant submitted that the trial court gave no reasons for finding that the termination was on account of redundancy rather than by expiry of the contracts upon the occurrence of the contemplated event. It 17

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Elrc Appeal No. E062 Of 2026 relied on clause 17 of the contract, on the course of dealing whereby the Respondent’s contract was renewed in tandem with each renewal of the CSU contract in 2017 and 2019, on the notices of 2nd October 2019, 21st November 2023, 20th December 2023 and 29th December 2023, and on the Respondent’s own email of 5th February 2024 acknowledging that the lapse of the CSU contract meant that all the employees in the CSU department were no longer on duty. 25. Relying on the definition of redundancy in section 2 of the Employment Act, it argued that the words “at the initiative of the employer” denote a unilateral termination for reasons not contemplated by the parties, and that where the parties have agreed on the circumstances that fix the term of employment, the end of the contract circumstances occurring is not a upon termination those at the employer’s initiative. It cited Veronica Moraa & 28 others v Indu Farm (EPZ) [2016] KEELRC 1135 (KLR); Ombewa v Ezeetec Limited [2024] KEELRC 776 (KLR), where it was held that a contract pegged to the life of a project comes to an 18

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Elrc Appeal No. E062 Of 2026 end with the project, and that such an ending does not amount to redundancy; and Kenya Union of Commercial, Food and Allied Workers v DHL Supply Chain Kenya Limited [2025] KEELRC 2034 (KLR), for the proposition that redundancy applies where employment is terminated before the contract expires, not where a fixed-term contract lapses. It further submitted, on the strength of section 47(5) of the Employment Act and Sieberi & another v Board of Management St Mary Academy [2025] KEELRC 2094 (KLR), that the Respondent had failed to discharge the initial burden of proving an unfair termination. 26. On grounds 4 and 5, the Appellant submitted that, there having been no premature termination, neither notice pay nor severance pay was due; that the Respondent had, in any event, received notice on 21st November 2023; and, citing Abdala & 9 others v Zhongmei & another [2025] KECA 26 (KLR) and Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho-Kariuki [2017] KECA 194 (KLR), that once a fixed-term contract comes to an 19

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Elrc Appeal No. E062 Of 2026 end the employer has no obligation to give notice or justify its ending on other grounds. (b) The Respondent’s submissions 27. In his written submissions dated 18th June 2026, the Respondent, through Munee Katu & Associates Company Advocates, grouped the grounds into three clusters. On ground 1, he submitted that the Appellant’s application of 7th November 2024 sought, and the court granted, a test suit on only two questions: the fairness of the termination and severance pay or gratuity. He pointed out that the claimant in Mombasa CMELRC No. E581 of 2024 had also sought arrears of house allowance for thirty-six months, and the claimant in Mombasa CMELRC No. E474 of 2024 had sought underpayment of wages, matters which the Appellant did not ask to be determined in the test suit and which must be dealt with in each file. He further submitted that the Appellant never sought the transfer of the Milimani files, and could not now blame the trial court for what he termed the Appellant’s own omission. 20

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Elrc Appeal No. E062 Of 2026 28. He relied on Rules 61 and 62 of the Employment and Labour Relations Court (Procedure) Rules, 2024, on consolidation and test suits respectively, emphasising Rule 62(2), which provides that the outcome of a test suit shall be binding on any suit stayed under sub-rule (1), and on Rule 68(4), requiring a decision to contain a concise statement of facts and the reasons for it, which he submitted the trial court had done. 29. On grounds 2 and 3, the Respondent relied on the Appellant’s email of 20th December 2023, his own email asking whether the inspectors were not entitled to severance pay, the team’s emails of February 2024 seeking clarification on their service package, and the Managing Director’s testimony in re-examination. He submitted that the notice of non-renewal came less than one month before the end of the employment, and that the inspectors lost their jobs through no fault of their own and therefore on account of redundancy within the meaning of section 2 of the Employment Act. He argued that the Appellant breached section 40(1)(b) and (c) by failing to notify the employees personally and the labour 21

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Elrc Appeal No. E062 Of 2026 officer, and to apply any selection criteria, and section 40(1) (g) by failing to pay severance pay. He relied on Mburu v Tata Chemicals Magadi Limited [2025] KEELRC 3603 (KLR); Wanja v North Coast Medical Hospital [2025] KEELRC 1241 (KLR), citing The German School Society & another v Helga Ohany [2023] KECA 894 (KLR) on the obligation to consult; and Were v Ketepa Sacco Limited [2026] KEELRC 1518 (KLR), on the requirement of both substantive justification and procedural fairness. 30. On grounds 4 and 5, the Respondent submitted that, the termination having been found unprocedural and unfair, the awards of notice pay under section 35(1)(c), severance pay under section 40(1)(g) and compensation under section 49(1)(c) of the Employment Act were properly within the trial court’s mandate. He urged that the appeal be dismissed with costs. 22

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Elrc Appeal No. E062 Of 2026 E. ANALYSIS AND DETERMINATION (a) The duty of this Court 31. This being a first appeal, this Court is enjoined to reconsider the evidence, evaluate it itself and draw its own conclusions, bearing in mind that it neither saw nor heard the witnesses and giving due allowance for that disadvantage: Selle & another v Associated Motor Boat Company Limited & others [1968] EA 123. An appellate court will not lightly depart from the trial court’s findings of fact, but it will do so where those findings are based on no evidence, on a misapprehension of the evidence, or where the trial court is shown demonstrably to have acted on wrong principles: Peters v Sunday Post Limited [1958] EA 424. 32. Having considered the record, the grounds of appeal and the rival submissions, I discern the following issues for determination: (i) whether the learned trial magistrate erred in her treatment of the order of 25th November 2024, and what the proper scope of the test suit was; 23

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Elrc Appeal No. E062 Of 2026 (ii) whether the Respondent’s contract of service came to an end by the occurrence of the event contemplated by the parties or was terminated by the Appellant, and in particular on account of redundancy; and (iii) whether the reliefs awarded were warranted. (b) Issue (i): The test suit 33. It is convenient to begin with the process that culminated in the order of 25th November 2024, for it sets the frame for everything that followed. The record bears out the following. First, the application of 7th November 2024 expressly identified all five other suits by court and number, three of them pending at Milimani, Nairobi, and two at Mombasa. The trial court was therefore fully aware, when it made the order, that the suits whose fate it was determining were pending both within and outside its own station. Secondly, the application was served and was not opposed; counsel for the Respondent, who acted for all six claimants, drew the court’s attention to the fact that the matters were in different courts and at different stages, and nonetheless expressly conceded 24

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Elrc Appeal No. E062 Of 2026 to the orders, asking only that they operate prospectively on costs. Thirdly, the order was made “as prayed”, without qualification as to the Milimani suits and without any condition that those files be transferred. 34. Fourthly, and importantly, the order was never assailed. The Respondent, and the claimants in the other suits through their common advocates, did not at any time apply for its review, variation or setting aside, nor did they appeal against it. Nothing in the record suggests that they were ever uncomfortable with it. On the contrary, they proceeded to trial on its footing: the Respondent acknowledged in cross-examination that “this is a test suit”, and his own written submissions before the trial court, at paragraph 11, embraced the fact that the cause was a test suit under the orders of 25th November 2024 involving the other suits. The Appellant, for its part, called its evidence on the same footing, its Managing Director testifying that the other claimants had worked under similar terms and left in the same circumstances on the same date. 25

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Elrc Appeal No. E062 Of 2026 35. An order of a court of competent jurisdiction, made with the concurrence of the parties, binds the parties and the court that made it until it is reviewed, varied or set aside through a process known to law. It is not open to a court, in its final judgment, and without any application before it and without hearing the parties on the point, to recast the effect of a subsisting interlocutory order. To do so is, in substance, to review the order suo motu, behind the backs of the parties who had ordered their affairs and conducted the trial in reliance upon it. 36. At the heart of the misstep lies a conflation of two distinct procedural devices: consolidation and the test suit. The Rules themselves draw the distinction. Rule 61 of the Employment and Labour Relations Court (Procedure) Rules, 2024 empowers the Court to consolidate suits where some common question of fact or law arises, or where it is practical and appropriate to proceed with the issues raised in the suits simultaneously. Rule 62, on the other hand, provides, as reproduced in the Respondent’s submissions: 26

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Elrc Appeal No. E062 Of 2026 “(1) Where two or more persons have instituted suits against the same respondent, the Court may, either on its own motion or upon the application of any of the parties with notice to all the affected parties, if satisfied that the issues to be tried in each suit are similar, make an order— (a) directing that one of the suits be tried as a test case; and (b) staying all the steps in the other suits until the selected suit is determined or fails to be a real trial of the issues. (2) The outcome of a test suit shall be binding on any suit that is stayed under subrule (1).” 37. Consolidation merges two or more suits into a single proceeding. The suits lose their separate procedural lives for purposes of trial: they are heard together, on one record, and determined by one judgment. Consolidation presupposes, therefore, that the court ordering it is seized of all the suits to be consolidated, or that they are first brought before it. Where suits are pending before subordinate courts 27

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Elrc Appeal No. E062 Of 2026 of different stations, bringing them together would first require a transfer, which is ordinarily a matter for a superior court (compare section 18 of the Civil Procedure Act). A test suit is a different creature altogether. The suits are not merged; each retains its separate existence in the court in which it was filed. One of them is selected and tried; the others are stayed; and, by operation of the order and of Rule 62(2), the outcome of the selected suit binds the stayed suits on the issues it was selected to determine. There is no need for the other files to be transferred to, or placed before, the court trying the test suit. Their stay, and the binding effect of the outcome, travel with the order, not with the files. 38. That is precisely why the test suit device was, and remains, the appropriate tool in the circumstances of this matter. Consolidation of suits pending in Mombasa and Nairobi before a single magistrate was not available without transfer. A test suit, however, allowed one court to determine the common questions once, and for that determination to bind the other suits wherever they were 28

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Elrc Appeal No. E062 Of 2026 pending, thereby averting parallel trials, inconsistent findings and the waste of judicial time. The Appellant’s reliance on Mounde v Mekenye (supra) is apt in that regard. 39. It follows that the learned trial magistrate misdirected herself when she directed, at the close of the hearing, that the Milimani files be moved to Mombasa, and more fundamentally when she declared in her judgment that the judgment was “only a test suit for the Mombasa matters” and that “the other matters will have to proceed afresh in Milimani.” Nothing in the order of 25th November 2024, or in Rule 62, made the transfer of the Milimani files a condition precedent to the binding effect of the outcome of the test suit. The declaration was made without any application, without hearing the parties, and in the teeth of a subsisting order to which both parties had submitted. It could not stand. 40. That, however, is not the end of the matter on ground 1. The Appellant framed its complaint as a failure “to determine and/or incorporate all the 5 claims ordered to constitute the 29

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Elrc Appeal No. E062 Of 2026 test suit.” To the extent that this formulation suggests that the test suit was to dispose of the other five suits in their entirety, it misstates the order. It is important to emphasise that the order was not a blanket order. The Appellant itself, by its application, carefully confined the test suit to two questions: (a) the fairness of the termination of employment, which, as the trial court correctly understood, embraces the consequential reliefs of compensation and notice pay; and (b) severance pay or gratuity. The order was made in those very terms. The Respondent is right that other claims in the stayed suits, such as arrears of house allowance in Mombasa CMELRC No. E581 of 2024 and underpayment of wages in Mombasa CMELRC No. E474 of 2024, and any claim for accrued leave or other distinct heads, were never submitted to the test suit, and cannot be determined by it. Those claims turn on facts personal to each claimant, and must proceed to determination in the respective suits. 41. In the premises, ground 1 succeeds, but only to the extent that the learned trial magistrate erred in excluding the Milimani suits from the reach of the test suit. The outcome of 30

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Elrc Appeal No. E062 Of 2026 the test suit binds all five suits listed in the order of 25th November 2024, wherever pending, but only on the two identified issues. Matters raising issues beyond those two shall proceed for determination, on those other issues, in the respective suits. (c) Issue (ii): How did the Respondent’s contract come to an end? 42. I turn to the substance of the dispute, which is the subject of grounds 2 and 3. The starting point is the contract, which the Respondent himself pleaded and produced. Clause 17 provides: “Your contract is tied to continuity of the Cargo Surveillance Scheme (CSU) contract with AKI. This contract terminates Twenty one (21) months from the commencement date which is the date of signature below unless otherwise specifically renewed or CSU contract terminates prematurely.” 43. The clause is not obscure. It told the Respondent, from the day he signed it, three things: that his employment existed 31

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Elrc Appeal No. E062 Of 2026 by reason of, and was tied to, the CSU contract with AKI; that it had a defined term, subject to renewal; and that, even within that term, it would end if the CSU contract ended. The contract was, in short, a contract for a specific project, whose duration was fixed not only by reference to a period of time but by reference to the life of the CSU contract. 44. The Respondent pleaded that after the twenty-one months his employment simply “continued” until 31st December 2023, and the argument was faintly made that it thereby shed its connection to the CSU contract. The evidence does not bear this out. The record shows that the continuation of the Respondent’s engagement was at every stage expressly anchored on the renewals of the CSU contract: the Appellant’s email of 20th December 2017 informed the CSU staff that the CSU contract had been renewed by AKI for two years and that the contracts of CSU staff had “equally been renewed for another two years”; its email of 2nd October 2019 gave notice to terminate the employment contracts of all CSU staff on 31st December 2019 when the CSU contract expired, but stated that should the contract be renewed, the 32

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Elrc Appeal No. E062 Of 2026 employment contracts would be automatically renewed; and upon AKI’s renewal of 22nd October 2019 for the period 1st January 2020 to 31st December 2023, the contracts continued for precisely that period. In any event, where parties continue in an employment relationship after the stipulated term without expressly agreeing new terms, the relationship continues on the terms previously agreed, save as may be inconsistent with the continuation. The tie to the CSU contract was the very foundation of the renewals; it was not displaced by them. 45. More decisively, there is no dispute on the point, because the Respondent admitted it. Under cross-examination, with clause 17 read to him, he accepted that his contract was tied to the contract with AKI; that the Appellant “has been renewing our contract every time the contract is renewed by AKI”; that he was aware that the AKI contract had been renewed from time to time; that he had never written to disagree with the Appellant’s communication on the consequences of the expiry of the CSU contract; and, most tellingly, that “our contract was terminated because AKI 33

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Elrc Appeal No. E062 Of 2026 terminated contract with the respondent” and “contract terminated because AKI never renewed the contract.” His email of 5th February 2024, written on behalf of the entire CSU team, is to the same effect: “As we all know that CSU contract lapsed on 31st December 2023, this implies that all your employees working under the CSU department are no longer on duty.” 46. It was, therefore, largely admitted that the Respondent’s contract came to an end when the CSU contract with AKI came to an end. That was the bargain the parties struck. Parties are bound by the terms of their contract, and it is a golden principle that courts of law do not rewrite contracts for parties. As the Court of Appeal stated in National Bank of Kenya Limited v Pipeplastic Samkolit (K) Limited & another [2001] KECA 362 (KLR): “A court of law cannot rewrite a contract between the parties. The parties are bound by the terms of 34

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Elrc Appeal No. E062 Of 2026 their contract, unless coercion, fraud or undue influence are pleaded and proved.” 47. No coercion, fraud, undue influence, illegality or unconscionability was pleaded or proved in respect of clause 17. The employment statute does not forbid contracts of this kind; to the contrary, it recognises that a contract of service may be for a specified period or for specific work, and section 35(1) of the Employment Act, which deems certain contracts terminable by notice, is expressly directed to contracts of service “not being a contract to perform specific work”. 48. Just as a contract fixed in time carries within itself an appointed moment of lapse by reference to a specified date, a contract made contingent upon the occurrence of a defined event carries within itself an appointed point of termination: the day on which the event occurs. In the former case the calendar ends the contract; in the latter, the event does. In neither case does the employer terminate the contract; the contract terminates itself, by the operation of 35

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Elrc Appeal No. E062 Of 2026 its own terms, upon a contingency to which both parties agreed at its making. Here the contingency was identified with complete clarity, it lay outside the control of the Appellant, and it occurred: AKI declined the Appellant’s proposal on 20th December 2023, and the CSU contract expired on 31st December 2023. On that day, by the parties’ own agreement, the Respondent’s contract came to an end. 49. That conclusion is fortified by the manner in which the Appellant conducted itself, both on this occasion and on the earlier one in 2019. On each occasion it received notice from AKI and promptly relayed the implications to the staff: on 21st November 2023, more than a month before the expiry, it reminded all CSU staff that the CSU contract would lapse on 31st December 2023, that it had tendered, and that should the bid succeed their contracts would be automatically renewed, but that if it failed their contracts would lapse on 31st December 2023. On 20th December 2023, the very communicated the day AKI’s outcome. letter The was AKI received, letters of it 3rd November 2023 and 20th December 2023 were produced. 36

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Elrc Appeal No. E062 Of 2026 There was no suggestion, let alone evidence, that the Appellant engineered the loss of the CSU contract, or that the event was a pretext for dispensing with the Respondent’s services. Had there been such evidence, the analysis would have been different, for a court will look beyond the form of a contract to guard against a disguised redundancy. There was none. Redundancy was neither pleaded nor established 50. The learned trial magistrate’s finding that the Respondent “was declared redundant” calls for close scrutiny, because it was the foundation of the entire judgment. The Respondent’s claim, as pleaded, was a conventional claim of unfair termination. Its particulars were drawn from the vocabulary of disciplinary dismissal: termination without notice, without a hearing, without a show-cause letter, without “proof” of any wrongdoing. Nowhere did the Respondent plead that his position had become superfluous, that the Appellant had terminated his employment on account of redundancy, or that the Appellant had failed to 37

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Elrc Appeal No. E062 Of 2026 comply with any of the conditions in section 40 of the Employment Act. The solitary reference, in a particular relating to severance pay, to the Appellant’s failure to pay severance pay “if indeed that the work volume had reduced or no work”, is conditional and speculative; it is not an averment of redundancy as a material fact, and it did not put the Appellant on notice that it was to meet a case under section 40. 51. Redundancy is a specific, statutorily regulated mode of termination with its own conditions precedent and its own remedies. If the Respondent intended it to be the basis of his case, it was a material fact which he was bound to plead, so that the Appellant could meet it and the court could frame an issue upon it. It is trite that parties are bound by their pleadings, and that a court determines the case the parties have brought, not a case of its own making or one introduced for the first time in submissions: Raila Amolo Odinga & another v Independent Electoral and Boundaries Commission & 2 others [2017] eKLR. The purpose of pleadings is to define the issues with precision and to 38

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Elrc Appeal No. E062 Of 2026 prevent either party from being taken by surprise. The redundancy case surfaced for the first time in the Respondent’s written submissions before the trial court, which opened with the assertion that “it is not in any doubt that the claimant was declared redundant.” Submissions, however eloquent, are not a substitute for pleadings, nor for evidence. They are the parties’ marshalling of the case pleaded and proved; they cannot enlarge it. 52. The learned trial magistrate, therefore, had no basis to proceed on the premise that the Respondent’s claim was a claim for unfair termination on account of redundancy. Her finding on this point is, with respect, unsupported by any reasoning. Having recited the Appellant’s submissions on clause 17 and the authorities cited, she did not engage with them at all. She did not construe clause 17, nor consider the course of dealing, nor the Respondent’s admissions. Her conclusion that the Respondent “[was] declared redundant on account that the contract with AKI was not renewed [and] it was not the fault of the Respondent/employer” is, moreover, internally inconsistent: it accepts that the cause 39

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Elrc Appeal No. E062 Of 2026 of the end of the employment was the non-renewal of the AKI contract, an event which the parties had agreed would end the employment, and yet characterises it as a redundancy effected by the employer. The framing of the issue as one of termination “on retirement grounds” and of whether the Respondent was an independent contractor, neither of which was in contest, and the reliance on section 41 of the Employment Act, which governs termination on grounds of misconduct, poor performance or physical incapacity, point to the same misdirection. 53. Even on its merits, the redundancy characterisation does not survive the statutory definition. Section 2 of the Employment Act defines redundancy as “the loss of employment, occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are distinguishes superfluous redundancy …”. from The every element other that ending of employment through no fault of the employee is that the termination is “at the initiative of the employer.” That 40

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Elrc Appeal No. E062 Of 2026 element is wholly absent here. The Appellant took no decision to terminate; it exercised no discretion to abolish an office or to reduce its establishment. The employment ended because an event, beyond the Appellant’s control, occurred, and because both parties had agreed that upon its occurrence the employment would end. That the Respondent lost his employment through no fault of his own is true, and it is not a matter of small consequence to him; but the absence of fault on the employee’s part is only one element of the definition, and it does not by itself convert the lapse of a contract into a redundancy. I respectfully agree with the reasoning in Ombewa v Ezeetec Limited [2024] KEELRC 776 (KLR) and Kenya Union of Commercial, Food and Allied Workers v DHL Supply Chain Kenya Limited [2025] KEELRC 2034 (KLR), cited by the Appellant, that the ending of a contract with the life of the project to which it was tied, as agreed by the parties from the outset, is not a redundancy. 54. The authorities relied upon by the Respondent, namely Mburu v Tata Chemicals Magadi Limited, Wanja v North Coast Medical Hospital and Were v Ketepa Sacco Limited, all 41

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Elrc Appeal No. E062 Of 2026 concerned terminations effected at the employer’s initiative, whether on account of redundancy or otherwise. They restate sound principles on the procedural protections that attend such terminations, but they do not assist in a case where there was no termination at the employer’s initiative at all. The Respondent’s reliance on the fact that the notices were sent to the group email address is likewise misplaced; the requirement in section 40(1)(b) that an employee be notified personally in writing and the labour officer notified is a condition of a termination on account of redundancy, and it does not arise where, as here, there was no such termination. The record shows, in any case, that the group addresses were the established channel of communication with the CSU staff on all matters touching their contracts, that the Respondent received the communications, and that he responded to them. 55. Section 47(5) of the Employment Act places upon the employee the burden of proving that an unfair termination of employment has occurred, and upon the employer the burden of justifying the grounds of termination. The first 42

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Elrc Appeal No. E062 Of 2026 burden is a threshold one. It is only when the employee establishes, at least prima facie, that his employment was terminated by the employer in circumstances that are unfair, that the employer is called upon to justify the reason and the process. The Respondent’s own contract, his own correspondence and his own admissions established that his employment ended by the occurrence of the contemplated event, and not by any act of termination at the initiative of the Appellant. In fact, there was no termination at the initiative of the Appellant at all. The Respondent did not, therefore, discharge the initial burden, and the question of whether the Appellant had a valid reason or followed a fair procedure did not arise. 56. Grounds 2 and 3 of the appeal therefore succeed. The basis upon which the learned trial magistrate found that the Respondent’s employment was unfairly terminated was erroneous. 43

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Elrc Appeal No. E062 Of 2026 (d) Issue (iii): Were the reliefs warranted? 57. The reliefs awarded by the trial court were, without exception, predicated on the finding of an unfair termination on account of redundancy. That foundation having fallen away, the edifice built upon it cannot stand. For completeness, I address each award in turn. 58. The declaration. The declaration that the Respondent’s termination was unprocedural and unfair cannot survive the finding that there was no termination by the Appellant, the contract having ended by its own terms. 59. Notice pay. Notice pay compensates an employee for the employer’s failure to give the notice required to bring a contract to an end at its instance. Where a contract comes to an end by the occurrence of the event upon which the parties agreed it would end, no notice to terminate is required, because the employer does not terminate it. The notice clause in the contract, enabling either party to terminate on one month’s notice, addressed termination at the instance of a party during the life of the contract; it did 44

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Elrc Appeal No. E062 Of 2026 not govern the automatic ending of the contract under clause 17. As already noted, section 35(1) of the Employment Act does not apply to a contract to perform specific work. In any event, the Respondent was, in fact, told on 21st November 2023, more than one month before 31st December 2023, that his contract would lapse on that date if the Appellant’s bid failed. The award of Kshs. 29,000 as notice pay was not warranted. 60. Severance pay. Severance pay under section 40(1)(g) of the Employment Act is payable to “an employee declared redundant.” It is a creature of redundancy and has no application where there has been no redundancy. The trial court’s award of Kshs. 145,000 was expressly founded on the premise that “the Claimant was declared redundant.” That premise having been displaced, the award cannot stand. Insofar as the trial court also observed that there was no proof that NSSF contributions were deducted and remitted, that observation could not found an award of severance pay under section 40, and no claim for service pay under section 35(5) was pleaded or determined on that 45

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Elrc Appeal No. E062 Of 2026 basis. The Respondent himself produced his NSSF statement to prove his employment and testified that the Appellant remitted NSSF contributions on his behalf, and his contract provided for NSSF contributions in accordance with the law. Under section 35(6)(d) of the Employment Act, service pay under section 35(5) is not payable to an employee who is a member of the National Social Security Fund. There was, accordingly, no basis in law or on the evidence for the sum of Kshs. 145,000 under any guise. 61. Compensation. Compensation under section 49(1)(c) of the Employment Act is a remedy for summary dismissal or termination that is unjustified or unfair. It presupposes a termination by the employer which is found to be unfair. There having been none, the award of Kshs. 87,000, being three months’ salary, has no foundation and must be set aside. 62. Certificate of service. The entitlement to a certificate of service is a statutory right under section 51 of the Employment Act, which does not depend on the fairness of 46

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Elrc Appeal No. E062 Of 2026 the ending of employment. The record shows that the Appellant issued the Respondent with a certificate of service dated 2nd January 2024, which the Respondent himself pleaded and produced. No further order is required in that respect. 63. Grounds 4 and 5 of the appeal therefore succeed. Before leaving this issue, I should add that the Court is not unmindful of the hardship that the loss of the CSU contract visited upon the Respondent and his colleagues, some of whom had served for over a decade. The law, however, gives effect to the bargain the parties made, and the Court cannot, out of sympathy, award what the contract and the statute do not provide. The Appellant’s own undertaking, in its email of 29th December 2023, to give the former CSU staff first priority when vacancies arise, is a matter which, it is hoped, it will honour in good faith. F. COSTS 64. Costs follow the event, but they remain in the discretion of the Court, to be exercised judicially. In the peculiar 47

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Elrc Appeal No. E062 Of 2026 circumstances of this matter, where the Respondent and his colleagues lost their livelihood through no fault of their own, upon the loss of a third-party contract, and where part of the complexity in the appeal was occasioned by the trial court’s own departure from its order rather than by the conduct of either party, I consider that the justice of the case is best served by an order that each party bears its own costs, both of this appeal and of the proceedings before the trial court. G. DISPOSITION 65. For the foregoing reasons, the appeal succeeds. I make the following final orders: (a) The appeal is allowed. (b) The Judgment and Decree of the Chief Magistrate’s Court at Mombasa (Hon. D. W. Nyambu, CM) delivered on 12th March 2026 in Mombasa MCELRC No. E264 of 2024 is set aside in its entirety, and is substituted with an order dismissing the Respondent’s claim in that suit. (c) The pronouncement in the said judgment that it applied only to the Mombasa matters and that the Milimani 48

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Elrc Appeal No. E062 Of 2026 matters would have to proceed afresh is set aside. The order of 25th November 2024 stands. (d) In accordance with the order of 25th November 2024 and Rule 62(2) of the Employment and Labour Relations Court (Procedure) Rules, 2024, this judgment shall apply to, and bind, the following suits, for which Mombasa MCELRC No. E264 of 2024 acted as the test suit, only with regard to the two identified issues, namely (i) the fairness of the termination of employment, including the claims for a declaration of unfair termination, compensation and notice pay, and (ii) severance pay or gratuity: Mombasa CM ELRC No. E581 of 2024; Mombasa CM ELRC No. E474 of 2024; Milimani CM ELRC No. E910 of 2024; Milimani CM ELRC No. E1431 of 2024; and Milimani CM ELRC No. E1261 of 2024. The claims in those suits on the said two issues shall stand determined in terms of this judgment. (e) Any claims in the said suits raising issues beyond the two identified issues, including but not limited to the claim for arrears of house allowance in Mombasa CM 49

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Elrc Appeal No. E062 Of 2026 ELRC No. E581 of 2024 and the claim for underpayment of wages in Mombasa CM ELRC No. E474 of 2024, are not affected by this judgment. The stay of those suits is lifted to that extent, and such claims shall proceed for hearing and determination in the respective courts. (f) Each party shall bear its own costs of this appeal and of the proceedings before the trial court. (g) The Deputy Registrar shall transmit a copy of this judgment to the Chief Magistrate’s Courts at Mombasa and at Milimani, Nairobi, for placement in each of the files listed in order (d) above. DATED, SIGNED AND DELIVERED at MOMBASA this 25th day of September 2026. OCHARO KEBIRA JUDGE 50

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