The Court of Appeal has dealt a blow to employers who keep workers in permanent roles by using casual or repeated short-term contracts.
In a landmark ruling delivered in Nyeri on July 24, 2026, the court held that employers cannot hide behind the wording of an employment contract to deny statutory rights. It said that if the reality of the employment relationship shows that a worker has been continuously engaged in permanent work, the worker should not be treated as merely “casual” for legal purposes.
The decision arose from a dispute between the Kenya County Government Workers Union and the Embu County Government. Workers accused the county of salary inequality and labour malpractice, arguing that they continued performing duties linked to permanent positions even though they were retained on contractual terms.
They moved to have the county regularise their employment status, seeking orders to change them from casual to permanent and pensionable terms.
In its ruling, the court said the substance of the work and the true relationship between employer and employee carry more weight than the label used in the contract.
The judges said courts will look beyond the label placed on an employment contract and instead examine the substance of the relationship between the worker and the employer. They held that the workers’ relationship with the county government was not casual or temporary. The court ruled that it amounted to permanent, pensionable employment.
The court also ordered the respondents to regularize the workers’ terms and conditions to bring them in line with fair labor practices under the Constitution and the Employment Act.
As a result, workers who have been continuously engaged for long periods under repeated short-term arrangements or who have been classified as casual employees while performing permanent duties may qualify for statutory protections. The judges pointed to Section 37 of the Employment Act and Article 41 of the Constitution, which guarantees the right to fair labor practices.
In effect, the Court of Appeal rejected efforts to use contractual arrangements as a workaround to employment protections. The court stressed that the actual nature of the work and the relationship between the parties matter more than the wording used in the contract.
The ruling also overturned an earlier decision by the Employment and Labour Relations Court, which dismissed the petition in June 2020. That prompted the union to lodge an appeal.
On appeal, the judges found that the lower court erred by failing to properly consider the workers’ discrimination claims. They also said the court wrongly treated the workers’ complaints as issues that should only be handled through a shop-floor union representative.
The judges noted that the petition raised alleged violations of constitutional rights, which placed the matter within the jurisdiction of the Employment and Labour Relations Court.
Ultimately, the Court of Appeal held that the workers’ employment status had been mischaracterized and that their rights under Article 41 of the Constitution and the Employment Act had been violated.
