The Court of Appeal has once again reaffirmed a
fundamental principle of Kenyan employment law: an employer cannot evade
statutory employment obligations by repeatedly engaging employees under casual
or rolling short-term contracts where the reality of the employment
relationship demonstrates continuous service and work of a permanent nature.
In its recent
decision in Kenya County Government Workers' Union v
Embu County Government & another (Civil Appeal 178 of 2020) [2026] KECA
1481 (KLR) (24 July 2026) (Judgment) the Court held that prolonged engagement
under casual or successive short-term contracts constitutes a deliberate
circumvention of labour protections and infringes the constitutional right to
fair labour practices under Article
41 of the Constitution.
The Court observed that the true character of an
employment relationship is determined not by the label assigned by the
employer, but by its substance. Consequently, employees who perform continuous
work over an extended period cannot be denied statutory protections simply
because their contracts describe them as "casual",
"temporary", or "fixed-term" employees.
This position is firmly anchored in section 37 of the Employment Act, 2007,
which was enacted to prevent employers from disguising permanent employment
relationships as casual employment. Where an employee works continuously in
circumstances contemplated by section 37, the law affords that employee the
protections applicable to regular employment, irrespective of the contractual
description adopted by the employer.
Equally significant is the Court's unequivocal
condemnation of the practice of successive fixed-term contracts used to avoid
statutory obligations. The Court stated:
"An employer cannot
retain an employee under casual or rolling short-term arrangements for long
periods as such conduct is a deliberate circumvention of labour protections;
and it violates the right to fair labour practices under Article 41 of the
Constitution."
This pronouncement builds upon the Court's earlier
decision in Kenyatta
University v Maina (Civil Appeal No. 261 of 2020) [2022] KECA 1201 (KLR), where it held that
the repeated execution of three-month contracts was "a roundabout way of avoiding the provisions of the law on casual
employment." The Court further agreed that prolonged and continuous
service transformed what was described as temporary employment into employment
that was, in substance, permanent and pensionable.
The decision is also consistent with Nanyuki Water & Sewerage Company
Limited v Benson Mwiti Ntiritu & 4 Others [2018] KECA 196 (KLR), where the Court
emphasized that the label attached to an employment contract is not decisive.
Rather, courts must examine the reality of the employment relationship,
including the continuity of service, the nature of the work, and the employer's
operational requirements.
Collectively, these decisions establish an important
principle in Kenyan employment jurisprudence: the substance of the employment relationship prevails
over its form. Employers who retain employees on rolling
fixed-term or casual arrangements for years, while assigning them work that is
continuous and integral to the enterprise, risk judicial findings that the
employees are entitled to the rights, benefits, and protections afforded to
permanent employees under the Employment Act.
The Court of Appeal's recent pronouncements therefore
serve as a timely reminder that employment contracts must reflect the genuine
nature of the relationship. Reliance on repeated short-term contracts or casual
designations as a mechanism to avoid statutory obligations is unlikely to
withstand judicial scrutiny. Such practices not only contravene section 37 of the Employment Act
but also offend the constitutional guarantee of fair labour practices under Article 41,
exposing employers to significant legal and financial consequences.
As
Kenyan employment law continues to evolve, employers should review their
workforce structures and contractual arrangements to ensure compliance with
both the Employment Act and the Constitution. The era in which contractual
labels alone could determine employment status has firmly come to an end.
Prepared by:
PATRICKS LAW ASSOCIATES
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Written
by Bridget Inyanje
