The Court of Appeal on Friday, February 17, ruled that employers are not obligated to extend employees’ contracts upon expiry.
In a ruling delivered on Friday, a three-judge bench comprising Justice Fatuma Sichale, Lydia Achole, and Mwangi Gachoka reversed a verdict by the Labour and Employment Relations Court that had ruled an employee had a right to demand compensation over unfair termination in 2017.
The former employer had filed an appeal at the Appellate Court to challenge the validity of the verdict issued by the Labour Relations Court.
The three judges noted that the employee in the aforementioned case was under a fixed contract as signed between her and the employer and was aware of the definite date of termination.
As such, the bench was convinced that it would be unjust for an employee in such a scenario to lay a claim for wrongful termination and compensation over the same.
They ruled that fixed-term contracts carry no rights, obligations, or expectations beyond the date of expiry.
“We dare say that an automatically renewable fixed-term contract is a contradiction in terms, as it would subject the parties to an indeterminate employment contract. The respondent was under a fixed-term contract with a definite commencement date and termination date.
There was no ambiguity created to create an expectation of contract renewal by the appellant’s issuance of a fixed-term contract,” the judgement read.
Henceforth, the decision of whether to renew or extend an employee’s contract will be made at the discretion of the employer and cannot be regarded as a legal right of the employee.
According to the judges, there was no promise to the employee about an extension hence the claim for compensation fell short in justifying the case.
“It is old hat, that parties are bound by the terms of the contracts they enter into,” the Court established.
The case was among the bundle of rulings delivered on Friday, February 17, by the Appellate Court.
Source: kENYANS.CO.KE