1. Introduction
The judgment in Changalwa v Unga Limited represents a pivotal
development in the jurisprudence of Kenyan employment law, particularly
regarding the interface between fixed-term contracts and the constitutional
guarantee of fair labour practices. The case interrogates whether an employee’s
prolonged engagement on consecutive fixed-term contracts, coupled with
treatment equivalent to that of permanent staff, can create a legitimate
expectation of renewal or prior notice of non-renewal.
Through this decision, the Employment and Labour Relations
Court (ELRC) reaffirmed its commitment to constitutionalising employment
relations and ensuring that formal contractual arrangements do not undermine
substantive fairness. The court’s reasoning reflects an increasingly purposive
interpretation of Article 41 of the Constitution of Kenya, 2010,
and a recognition that the doctrine of legitimate expectation—traditionally
confined to public and administrative law—has a central role in promoting
equity in the workplace.
2. Factual Matrix
The claimant had served Unga Limited for thirteen
consecutive years under a series of fixed-term contracts. Despite the
ostensibly temporary character of these arrangements, the claimant was enrolled
in a gratuity scheme reserved exclusively for permanent employees.
Upon expiry of the final contract, the respondent neither
renewed the agreement nor gave advance notice of non-renewal. The claimant
contended that the employer’s conduct over the years—especially the inclusion
in permanent staff benefits—had generated a legitimate expectation of
continued employment or, at minimum, of notice prior to disengagement.
Conversely, the employer maintained that the contract had lapsed
by effluxion of time and that the doctrine of legitimate expectation was
inapplicable to fixed-term contracts, which, by definition, are
self-terminating.
3. Issue for Determination
The court was invited to determine whether continuous
employment under successive fixed-term contracts, combined with treatment
indistinguishable from that of permanent employees, could give rise to a legitimate
expectation of renewal or reasonable notice of non-renewal, and
whether failure to meet such expectation amounted to unfair labour practice.
4. Judicial Determination
The ELRC held that the claimant’s long-term service, coupled
with participation in a gratuity scheme reserved for permanent employees,
created a legitimate expectation of renewal or, at the very least,
advance notice of non-renewal. The respondent’s abrupt cessation of the
employment relationship was found to contravene the claimant’s rights under Article
41 of the Constitution and Section 45 of the Employment Act (2007).
The court therefore declared the non-renewal procedurally
and substantively unfair, awarding appropriate remedies by way of compensation
and/or payment in lieu of notice.
5. Analytical Discussion
5.1 The Nature of Fixed-Term Contracts
A fixed-term contract is one whose duration is defined at
the outset and which ordinarily terminates automatically upon expiry.
Kenyan courts have consistently recognised that, absent express agreement, no
expectation of renewal arises from such contracts. This principle was
reaffirmed in Registered Trustees of the Presbyterian Church of East Africa
& Another v Ruth Gathoni Ngotho-Kariuki.
Nevertheless, the practical realities of modern
employment often complicate this strict contractual position. Many
employers engage workers on rolling fixed-term contracts spanning several
years, effectively creating indefinite employment relationships in substance,
though not in form. Changalwa exposes the tension between contractual
orthodoxy and equitable fairness, emphasising that adherence to formal expiry
clauses cannot legitimise practices that amount to disguised permanency.
5.2 The Doctrine of Legitimate Expectation in Employment
Relations
The doctrine of legitimate expectation, a construct of administrative
law, traditionally protects individuals from arbitrary deviation from
established policies or representations by public authorities. In employment
law, its adaptation serves a similar purpose—shielding employees from abrupt,
unjustified, or inconsistent conduct by employers who have fostered an
expectation of continuity.
In Changalwa, the court applied this doctrine to the
employment context, holding that legitimate expectation arises where:
- There
is a consistent pattern of contract renewals;
- The
employer’s conduct conveys an assurance of continued engagement; and
- The
employee reasonably relies on that assurance to expect renewal or at least
notice of cessation.
The decision echoes earlier jurisprudence such as Elizabeth
Washeke & Others v Airtel Networks (K) Ltd and Transparency
International Kenya v Sheila M. M’Mbijjewe & Others, both of which
recognised that legitimate expectation may arise where an employer’s actions
undermine the predictability and fairness of employment relationships.
5.3 Constitutionalisation of Employment Fairness
The court’s reasoning reflects the ongoing constitutionalisation
of employment law in Kenya. Article 41(1) of the Constitution
guarantees every worker the right to fair labour practices, while Section
45(2) of the Employment Act prohibits unfair termination. Although
non-renewal of a fixed-term contract does not technically amount to
termination, the court adopted a substantive approach—holding that the
spirit of the Constitution demands fairness in all employment decisions,
including decisions not to renew.
By invoking Article 41, the court moved beyond the
confines of contractual formalism and infused the employment relationship with constitutional
morality—a recognition that fairness, good faith, and transparency are not
mere aspirations but binding obligations on employers. This interpretation
situates Changalwa within a transformative constitutional framework
where the substance of justice supersedes the form of contract.
5.4 Fair Labour Practice and the Rule of Good Faith
The decision reinforces the principle that employers must
act in good faith and with procedural transparency when deciding
not to renew fixed-term contracts. Even where renewal is not guaranteed,
fairness demands that employees be given adequate notice to plan for
transition.
The court implicitly recognised that prolonged reliance on
short-term contracts may constitute an abuse of managerial discretion,
especially where the nature of work is permanent and ongoing. The case
therefore contributes to the development of an equitable jurisprudence
preventing employers from using fixed-term labels to circumvent obligations
associated with permanent employment—such as job security, redundancy
procedures, and long-term benefits.
5.5 Policy and Institutional Implications
From a policy perspective, Changalwa invites
employers to re-examine the structure and administration of fixed-term
engagements. The following practices emerge as essential for compliance with
fair labour standards:
- Transparency:
Communicate renewal or non-renewal decisions in advance and record the
reasons for discontinuation.
- Role
Segregation: Avoid conflating permanent and fixed-term benefit schemes
unless justified by clear operational rationale.
- Continuity
Assessment: Where employment is continuous and the position permanent
in nature, consider conversion to an indefinite contract to reflect
reality.
- Procedural
Safeguards: Ensure that decisions regarding non-renewal are
accompanied by consultation and fair notice to the employee.
Adherence to these principles not only mitigates legal
exposure but also enhances institutional reputation and employee morale.
6. Ratio Decidendi
Where an employee serves for an extended period under successive
fixed-term contracts and receives treatment equivalent to that of permanent
staff, the employer’s conduct may give rise to a legitimate expectation
of renewal or prior notice of non-renewal. Failure to meet that expectation
constitutes a breach of fair labour practice, contrary to Article 41
of the Constitution and Section 45 of the Employment Act (2007).
7. Significance of the Decision
Changalwa is emblematic of a broader judicial trend
in which Kenyan courts seek to reconcile contractual certainty with social
justice. It affirms that employment relationships are not merely commercial
but are constitutional and relational, grounded in mutual trust and
fairness.
By extending the doctrine of legitimate expectation into
private employment, the court fortifies the normative foundation of Kenyan
labour law, aligning it with global best practices and ILO standards that
emphasise security of tenure and fair treatment.
The decision thus marks a continued evolution from formalist
contract enforcement to transformative adjudication—an approach that
evaluates employment relations through the lens of equality, good faith, and
constitutional justice.
8. Conclusion
The ruling in Changalwa v Unga Limited underscores
the judiciary’s insistence that fairness and good faith are the cornerstones of
modern employment relations. Employers who perpetuate long-term fixed-term
arrangements while extending permanent benefits must now recognise that such
conduct may give rise to enforceable legitimate expectations.
The case stands as a cautionary precedent: the form of a
contract cannot defeat the substance of fairness. As Kenyan employment law
continues to evolve under the Constitution’s transformative ethos, Changalwa
will likely serve as a reference point in defining the contours of legitimate
expectation and fair labour practice in the era of flexible work arrangements.
References
- Changalwa
v Unga Limited [2025] KEELRC 1389 (KLR).
- Registered
Trustees of the Presbyterian Church of East Africa & Another v Ruth
Gathoni Ngotho-Kariuki [2017] eKLR.
- Elizabeth
Washeke & Others v Airtel Networks (K) Ltd [2013] eKLR.
- Transparency
International Kenya v Sheila M. M’Mbijjewe & 2 Others [2022] eKLR.
Disclaimer: This article
is for informational purposes only and does not constitute legal advice.
