By Maryanne Wambui
Advocate of the High Court of Kenya, Junior Associate, Conveyancing & Commercial Department
Reviewed by Dennis Juma Mogaka
Advocate of the High Court, Managing Partner, Chege Kibathi & Company Advocates LLP
ABSTRACT
The Court of Appeal’s decision in Kenya County Government Workers’ Union vs. Embu County Government & Another represents a significant pronouncement on fair labour practices and the legal consequences of prolonged casual and successive short-term employment arrangements. The judgment reinforces the constitutional protection afforded to employees who, despite being engaged under casual or successive short-term arrangements, perform work of a continuous and permanent nature.
In allowing the appeal, the Court held, in substance, that employers cannot rely on contractual labels or repeated short-term engagements to defeat mandatory statutory protections where the practical reality of the employment relationship demonstrates continuous employment of a permanent nature. The Court further reaffirmed the protective purpose of Article 41 of the Constitution and section 37 of the Employment Act.
The decision is particularly significant because it illustrates the need to distinguish between legitimate fixed-term employment and arrangements which, through repeated renewals or inappropriate classification, may operate to circumvent statutory employment protections.
This article analyses the Court’s reasoning, the statutory and constitutional framework, the distinction between fixed-term and casual employment, the evidentiary issues arising from the proceedings, and the broader implications of the judgment for county governments, public and private employers, human resource practitioners, employees and trade unions.
INTRODUCTION
Employment relationships in Kenya have undergone a profound constitutional transformation since the promulgation of the Constitution of Kenya, 2010. While contractual principles continue to govern many aspects of the employment relationship, employment law is also informed by mandatory statutory protections and constitutional guarantees.
Article 41 introduced a constitutional guarantee of fair labour practices, elevating employment rights beyond purely contractual entitlements. Consequently, employers cannot rely solely on contractual documentation where the practical reality of the employment relationship demonstrates that mandatory statutory or constitutional protections have been engaged.
The Court of Appeal’s judgment in Kenya County Government Workers’ Union vs. Embu County Government & Another illustrates this constitutional and statutory shift. Rather than focusing exclusively on the labels used in appointment letters or employment contracts, the Court examined the substance and continuity of the employment relationship, the nature of the work performed and the statutory framework governing casual employment.
The judgment is therefore significant not because it renders fixed-term contracts unlawful, but because it demonstrates that legitimate contractual arrangements cannot be used as a mechanism for defeating mandatory employment protections. Where the circumstances of employment are inconsistent with the contractual label, courts may examine the substance of the relationship and apply the law accordingly.
BACKGROUND OF THE DISPUTE
The dispute arose following the transition from the former local authority and Hospital Management Board system to county governments after devolution. The Kenya County Government Workers’ Union instituted constitutional proceedings before the Employment and Labour Relations Court (ELRC) on behalf of approximately 256 employees working in various health facilities within Embu County.
According to the Union, many of its members had initially been engaged under contracts lasting between three months and one year. Although the contracts repeatedly expired, the employees continued working without interruption for periods extending to almost two decades. Throughout that period, the employees allegedly performed duties of a continuous and permanent nature, received monthly salaries, remained continuously on the employer’s payroll, were denied certain employment benefits and remained uncertain regarding their employment status. The Union further alleged that newer employees were subsequently employed on permanent and pensionable terms while the affected employees continued serving under temporary arrangements.
The Union alleged violations of Articles 27 and 41 of the Constitution and sections 5, 7, 9, 10 and 37 of the Employment Act. The principal remedies sought included declarations concerning violation of constitutional rights, conversion of employment into permanent and pensionable terms, equal remuneration and protection against arbitrary recruitment and dismissal.
DECISION OF THE EMPLOYMENT AND LABOUR RELATIONS COURT
The ELRC dismissed the Petition in its entirety. The Court held that the Union had not proved discrimination, that the Petition lacked merit and that the industrial dispute ought first to have been pursued through appropriate workplace mechanisms. The Court further found that no constitutional violation had been demonstrated and dismissed the Petition with costs.
THE COURT OF APPEAL’S APPROACH
The Court of Appeal adopted a different analytical approach. Rather than focusing solely on the wording of the individual employment arrangements, the Court considered the actual relationship between the parties, including the duration and continuity of employment, the nature of the work performed, the statutory framework governing employment and the constitutional protection afforded by Article 41.
The decision reinforces the principle that employment law is protective legislation intended, among other things, to address the inherent inequality in bargaining power between employers and employees. Courts must therefore examine the practical realities of an employment relationship where the contractual description appears inconsistent with the statutory framework.
This does not, however, mean that contractual terms are irrelevant or that every long-serving fixed-term employee is automatically entitled to permanent employment. The nature of the engagement, the applicable statutory provisions and the facts of each case remain critical.
SECTION 37 OF THE EMPLOYMENT ACT: THE CORNERSTONE OF THE DECISION
The Court’s reasoning centered significantly on section 37 of the Employment Act. The provision addresses circumstances in which a person engaged as a casual employee performs work continuously or performs work which cannot reasonably be expected to be completed within the statutory period. Where the statutory conditions for conversion are established, the employee’s status is affected by operation of law rather than merely by the employer’s contractual designation. The significance of section 37 is therefore that an employer cannot avoid the statutory consequences applicable to casual employment merely by continuing to describe an employee as a casual where the factual circumstances satisfy the statutory requirements.
It is important, however, to distinguish this statutory mechanism from a general rule that every fixed-term contract automatically converts into permanent employment merely because it has been renewed several times. Fixed-term contracts are recognised forms of employment and may be legitimate where justified by the nature and circumstances of the work. The critical question is whether the contractual arrangement is genuine and consistent with the applicable law or whether the contractual structure is being used to circumvent mandatory statutory protections.
SUBSTANCE PREVAILS OVER FORM
Perhaps the most important contribution of the judgment is the Court’s insistence that the legal character of an employment relationship cannot always be determined by the label attached to it. The Court considered factors including continuity of service, the nature of the work performed, remuneration, payroll status and the length of service. The employees had worked continuously, earned monthly wages, remained on the payroll and performed institutional functions over extended periods.
These circumstances were inconsistent with the ordinary concept of intermittent casual employment and therefore required the Court to examine the relationship beyond the terminology used in the relevant employment documents. The principle is particularly important for employers. Employment documentation should accurately reflect the nature of the relationship and should not be structured merely to avoid statutory obligations.
At the same time, the principle should not be interpreted as rendering all fixed-term contracts suspect. Fixed-term employment remains legitimate where it is genuinely temporary, project-specific, seasonal, donor-funded or otherwise justified by the circumstances of the engagement.
ARTICLE 41 OF THE CONSTITUTION: THE RIGHT TO FAIR LABOUR PRACTICES
One of the significant aspects of the Court of Appeal’s judgment lies in its treatment of Article 41 of the Constitution. Article 41(1) provides that “Every person has the right to fair labour practices.” Article 41(2) further guarantees workers various rights, including fair remuneration, reasonable working conditions and the right to form, join or participate in the activities of a trade union.
These constitutional protections operate alongside the statutory framework governing employment. Contractual terms cannot lawfully be used to defeat mandatory statutory or constitutional protections.
The Court recognised the constitutional implications of repeated short-term engagements where employees had, in substance, been performing continuous work for many years while being denied the employment security and benefits associated with their actual circumstances.
The decision therefore reinforces the principle that fair labour practices are concerned not only with the wording of a contract but also with the manner in which the employment relationship operates in practice.
ROLLING FIXED-TERM CONTRACTS AND DISGUISED EMPLOYMENT
Fixed-term contracts are lawful and serve legitimate purposes. Employers may properly use them where employment is seasonal, project-specific, donor-funded or genuinely temporary.
The difficulty arises where successive short-term contracts are used over an extended period in circumstances where the employee performs continuous work of a permanent institutional nature.
The respondents argued that the employees had voluntarily entered into contracts of three months, six months or one year and that the courts should not rewrite those agreements. Ordinarily, this argument reflects the principle that courts should not rewrite contracts freely entered into by parties. However, employment law is not governed exclusively by ordinary contractual principles. It also contains mandatory statutory protections designed to regulate the employment relationship.
Where contractual arrangements are deliberately structured to defeat statutory rights, the courts may intervene to give effect to the applicable law. The Court relied on its earlier decision in Kenyatta University vs. Maina, in which it considered the effect of repeatedly renewing short-term contracts over an extended period.
The broader lesson is therefore not that fixed-term contracts are unlawful, but that repeated renewals must have a legitimate basis and should not be used as an artificial mechanism for avoiding statutory employment obligations.
THE PURPOSE AND PROTECTIVE NATURE OF SECTION 37
Section 37 of the Employment Act is an important employee-protective provision. Its purpose includes preventing employers from retaining employees indefinitely as casual workers while assigning them continuous work. Casual employment is conceptually distinct from genuine fixed-term employment. A casual arrangement ordinarily concerns work of an intermittent or short-term nature, whereas a fixed-term contract has a defined contractual duration and may be legitimate even where the employment is not casual.
The Court’s decision underscores the importance of examining the actual circumstances of engagement. Where the statutory requirements for conversion are satisfied, an employer cannot defeat those consequences simply by continuing to use a different contractual description. Where Parliament has prescribed the legal consequences of a particular employment relationship, parties cannot contract out of mandatory statutory requirements merely through terminology.
THE COURT’S REJECTION OF FORMALISM
An important jurisprudential feature of the decision is the Court’s rejection of an approach that focuses exclusively on formal contractual descriptions. A purely formal approach asks what the contract calls the employee. A substantive approach asks what work was actually performed, for how long, under what conditions and whether the employment arrangement was consistent with the applicable statutory framework.
The Court’s approach reflects the broader principle that contractual labels cannot, by themselves, determine the legal consequences of an employment relationship where the facts demonstrate otherwise. This approach is particularly relevant in employment disputes because of the imbalance in bargaining power between employers and employees and the protective purpose of labour legislation.
EMPLOYMENT SECURITY AND THE QUESTION OF LEGITIMATE EXPECTATION
Although the Court did not expressly base its decision on the doctrine of legitimate expectation, aspects of its reasoning raise an important question concerning employment security and the expectations created by prolonged employment arrangements.
The employees had worked continuously for many years, received repeated renewals and remained in employment notwithstanding the expiry and renewal of successive arrangements.
These circumstances may, depending on the facts of a particular case, be relevant to an employee’s reasonable expectations concerning continuity and regularisation of employment.
It is important, however, not to treat legitimate expectation as an express holding of the Court in this case. Rather, the concept provides a useful analytical lens through which the broader implications of prolonged and repeated employment arrangements may be considered. The more immediate legal foundation of the decision remains the applicable constitutional and statutory framework governing fair labour practices and casual employment.
PUBLIC EMPLOYERS AND THEIR CONSTITUTIONAL OBLIGATIONS
The respondents in the case were a County Government and a County Public Service Board. The decision is therefore particularly relevant to public employers. Public institutions are subject to constitutional values and principles governing public administration and employment. They must ensure that their employment practices are consistent with constitutional and statutory requirements.
The judgment should therefore prompt public institutions to examine long-serving employees engaged under casual or successive short-term arrangements, particularly where such employees perform continuous functions that form part of the ordinary operations of the institution.
This does not mean that every temporary or fixed-term employee must automatically be absorbed into permanent and pensionable establishment. Rather, public employers must ensure that the classification and treatment of employees are objectively justified and consistent with applicable law and public-service requirements.
EQUAL PAY AND DISCRIMINATION: A MORE NUANCED ANALYSIS
The Court also considered allegations of discrimination and unequal remuneration. The Appellant alleged that employees performing similar duties received different remuneration and benefits. The Court recognised that differential treatment, where based on a prohibited ground and sufficiently established, may engage Article 27 of the Constitution and section 5 of the Employment Act.
However, the Court found that the Appellant had not provided sufficient documentary evidence comparing the relevant salary scales, job descriptions, qualifications and employment benefits to sustain the discrimination claim. This aspect of the judgment demonstrates that allegations of discrimination must still be supported by sufficient factual and evidentiary material.
At the same time, section 5(7) of the Employment Act places an evidential burden on an employer where discrimination is alleged. Employers should therefore maintain adequate employment records capable of explaining differences in remuneration, benefits and treatment.
The practical lesson is that employers should ensure that distinctions in employment terms are objectively supportable and properly documented.
EVIDENTIARY BURDENS IN EMPLOYMENT LITIGATION
Another significant procedural aspect of the decision concerns the evidentiary burden in employment disputes. Ordinarily, under the Evidence Act, the legal burden rests upon the party asserting a fact. Employment legislation, however, modifies this general position in specific circumstances, including allegations of discrimination.
Section 7(5) of the Employment Act places an evidential burden upon the employer in relation to allegations of discrimination. This reflects the practical reality that employment records and comparative information are frequently within the employer’s control.
The Court nevertheless found that the Appellant had not produced sufficient comparative evidence to establish its discrimination claim. The case therefore illustrates that the statutory evidential burden does not eliminate the need for a claimant to place sufficient material before the Court to establish an arguable factual basis for the allegation. Employers should, in turn, be prepared to produce relevant employment records and evidence explaining any differential treatment.
THE CONSEQUENCES OF FAILING TO TEST EVIDENCE THROUGH CROSS-EXAMINATION
An equally important procedural lesson concerns the consequences of failing to challenge disputed evidence. The respondents filed replying affidavits but did not call witnesses to testify and subject the evidence to cross-examination. The Court considered the evidentiary consequences of that approach and referred to the principles articulated in Mohamed Abdi Mahamud vs. Ahmed Abdullahi Mohamad & 3 Others.
Where factual allegations are disputed and a party elects not to call appropriate witnesses or test evidence through cross-examination, the Court may draw appropriate inferences from the evidentiary record.
This does not mean that an untested affidavit automatically has no evidentiary value. Rather, the weight attached to evidence will depend upon the circumstances of the case and the manner in which the evidence has been challenged or supported.
For employers defending employment claims, the practical lesson is clear: where factual issues are material to the dispute, appropriate witnesses should be identified and presented to explain employment practices, managerial decisions and the circumstances surrounding the disputed employment arrangements.
TRADE UNIONS AS CONSTITUTIONAL LITIGANTS
The Court also considered the argument that the dispute ought first to have been addressed through workplace or industrial relations mechanisms. In reversing the trial court’s approach, the Court distinguished ordinary workplace grievances from claims alleging violations of constitutional rights. Where employees allege violations of constitutional rights, including the right to fair labour practices under Article 41 or equality under Article 27, the Employment and Labour Relations Court has jurisdiction to determine the constitutional questions arising within its mandate.
The decision therefore reinforces the role of trade unions not only as collective bargaining representatives but also, where the constitutional requirements are met, as institutions capable of pursuing claims concerning the protection of workers’ constitutional rights.
THE ERRORS OF THE EMPLOYMENT AND LABOUR RELATIONS COURT
The Court of Appeal identified significant shortcomings in the approach adopted by the trial court.
a) Failure to Examine the True Nature of the Employment Relationship
The trial court focused substantially on the contractual description of the employees’ engagement without sufficiently examining whether the continuity of service, nature of the work and repeated renewals had legal consequences under section 37 of the Employment Act.
Employment disputes require courts to consider the practical realities of the relationship where the statutory framework makes those realities legally relevant.
b) Failure to Apply the Constitutional Standard
The trial court treated the dispute largely as a contractual disagreement. The Court of Appeal emphasised that allegations concerning Articles 27 and 41 required consideration of the employer’s conduct against the applicable constitutional and statutory standards. Contractual drafting cannot displace mandatory constitutional or statutory protections.
c) Failure to Properly Evaluate the Evidence
The Court of Appeal also found shortcomings in the evaluation of the evidence before the trial court, including the significance of the respondents’ evidence and their failure to call witnesses.
A court of first instance has a duty to evaluate the evidence, identify the issues in dispute and provide adequate reasons for accepting or rejecting material evidence.
CONCLUSION
The decision in Kenya County Government Workers’ Union vs. Embu County Government & Another is significant not because it abolishes fixed-term employment, but because it reinforces the principle that employment arrangements must comply with mandatory statutory and constitutional protections. The judgment demonstrates that employers may legitimately use fixed-term contracts where the nature and circumstances of the work justify them. However, contractual labels and repeated renewals cannot be used to defeat statutory protections where the substance of the employment relationship demonstrates circumstances attracting those protections. The decision therefore provides important guidance to employers, employees, trade unions and courts alike.
THE PRACTICAL IMPLICATIONS FOR COUNTY GOVERNMENTS
County governments should undertake comprehensive audits of their workforce to identify employees who:
a) have served continuously for extended periods;
b) perform duties of a permanent or continuing institutional nature;
c) have been subjected to repeated short-term contract renewals without clear objective justification; or
d) continue to be designated as casual or temporary employees despite the factual circumstances of their engagement.
Such audits should distinguish between genuine fixed-term employment and casual employment that may fall within the statutory framework contemplated by section 37. County governments should also ensure that any transition to permanent and pensionable employment is undertaken in accordance with the applicable public-service laws, establishment structures and pension arrangements.
IMPLICATIONS FOR HUMAN RESOURCE MANAGEMENT
The judgment provides important guidance for human resource practitioners in both the public and private sectors. First, employers should avoid using rolling short-term contracts as a substitute for permanent employment where there is no legitimate justification for the arrangement.
Secondly, employment documentation should accurately reflect the true nature and purpose of the engagement. Inconsistencies between appointment letters, payroll records and actual working arrangements may undermine an employer’s position in litigation. Thirdly, employers should establish clear and objective policies governing contract renewals. Repeated renewals over many years, particularly where the work remains continuous and institutional, may expose the employer to legal challenge.
Fourthly, employers should maintain adequate employment records, including contracts, payroll records, job descriptions, remuneration structures and evidence supporting decisions concerning renewal, non-renewal or differential treatment. Finally, organisations should ensure that differences in remuneration and employment benefits are objectively justifiable and properly documented. While differences in pay are not inherently unlawful, employers should be able to explain the basis for any distinction where challenged.
IMPLICATIONS FOR EMPLOYEES AND TRADE UNIONS
Employees facing prolonged casual or successive short-term engagements should preserve documentary evidence demonstrating the actual nature and continuity of their employment, including contracts, payslips, payroll records, correspondence and evidence of the duties performed. Trade unions, on the other hand, should carefully assess whether a dispute concerns an ordinary workplace grievance, a collective bargaining issue or an alleged constitutional violation, as the legal and procedural consequences may differ.
STRENGTHENING CONSTITUTIONAL LABOUR JURISPRUDENCE
Beyond its immediate factual context, the judgment contributes to the development of constitutional labour jurisprudence in Kenya. It demonstrates that employment relationships are not viewed solely through the lens of contractual autonomy. They also engage constitutional values such as dignity, equality, social justice and fair labour practices.
The Court’s insistence that substance must be considered alongside form, together with its application of Article 41 and the Employment Act, reinforces the principle that statutory protections cannot be undermined through contractual arrangements designed to circumvent mandatory legal obligations.
The broader lesson for employers is therefore one of proper classification, objective justification and accurate documentation. Fixed-term employment remains a legitimate and useful mechanism where genuinely justified. What the law does not permit is the use of contractual form to disguise a relationship whose substance attracts protections that the law makes mandatory.
