A fixed-term contract is a contract of service that specifies the start date and the end date of the employment. Termination of this type of contract or
expectation of renewal has been left to the interpretation of the court and theapplication of the principle of legitimate expectation.

The Court of Appeal of Kenya has in Transparency International-Kenya v Teresa Carlo Omondi Civil Appeal No 81 of 2018 held that there cannot be a legitimate expectation of renewal of a fixed-term employment contract. Once a fixed term contract has come to an end, the employer has no obligation to justify termination on other grounds beyond the lapse of the fixed period. The Burden of proof is always on the employee to prove that they legitimately expected their contract to be renewed. The employee is to prove that the employer either expressly or impliedly expressed renewal of the contract.

Whether a contract with a renewable clause will be extended or not is an issue that is at the discretion of the employer and cannot create a legal right under the doctrine of legitimate expectation. The court held that to require an Employer to give reasons would be the same thing as requiring an employer to give reasons to a potential employee for rejecting their application.

Once a fixed-term contract has expired, parties can only engage thereafter on a tabula rasa. The general principle is that a fixed-term contract carries no rights, obligations, or expectations beyond the date of expiry.

This means that once a fixed-term contract is at the end, the employer has no obligation to justify termination on other grounds beyond the lapse of the fixed period hence any claim for wrongful termination in this regard cannot be maintained.

This is not to be understood that there cannot be a legitimate expectation on renewal of a fixed-term contract. It only means that the legitimate expectation has to be proved arising from the employer to the employee. Without this proof, legitimate expectations cannot be pleaded.

The court further explained that the burden of proof, in legitimate expectation claims, is always on the Employee. It must be shown that the Employer, through regular practice, or an express promise, leads the Employee to legitimately expect there would be renewal. The expectation becomes legally protected, and ought not to be ignored by the Employer when managerial prerogative on the subject is exercised. The legitimate expectation is not the same thing as anticipation, desire, or hope. It is a principle based on a right, grounded on the larger principles of reasonableness and fair dealing between Employers and Employees.  The Employee must demonstrate some rational and objective reason, for her expectation. The representation underlying the expectation must be unambiguous. The expectation must be induced by the decision maker. The decision maker must have the authority to renew. Repeated renewals, extended service beyond the period provided for in the fixed-term contract, and promise of renewal, are some of the elements that would amount to objective reasons underlying the expectation of renewal. The presence of these elements, however, is not to be taken as conclusive proof of legitimate expectation.

You can read more of this principle in The Court of Appeal of Kenya in Transparency International-Kenya v Teresa Carlo Omondi Civil Appeal No 81 of 2018.


As Imperial Registrars, we shall be pleased to assist you or your company in the preparation and undertaking of relevant compliance measures concerning the Fixed Term contracts. Kindly get in touch with us via (info@imperialregistrars.co.ke) for further assistance.

This article does not constitute legal advice and should be relied on as such. No responsibility for the accuracy or correctness of the information in the article should be held without seeking specific legal advice on the subject matter. If you have any queries regarding the same, please do not hesitate to contact us at info@imperialregistrars.co.ke

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