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ELRCPartially AllowedNot stated in the judgment· [2023] KEELRC 994 (KLR)

Odhiambo v University of Nairobi Enterprises and Services Limited (Cause E497 of 2021) [2023] KEELRC 994 (KLR)

Employment and Labour Relations Court
18 April 2023
5,201 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court ruled a former employee deserved his full gratuity and dues, but his unfair termination claim failed because his fixed-term contract simply expired.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 26th April 2012 on successive fixed-term contracts, last renewed on 7th May 2018 for three years, sought a declaration that his termination was unfair, unlawful and wrongful, together with 12 months' salary compensation, gratuity at 31% of basic salary, severance pay, salary in lieu of notice, outstanding leave days, day trip allowance and a long service award. His request for renewal was rejected in April 2021 on cost-containment/outsourcing grounds, and processing of his terminal dues was suspended pending investigations following his whistleblowing on alleged irregularities concerning the Managing Director's office. The Respondent denied unfair termination, asserting the contract lapsed by effluxion of time with no expectation of renewal, and counterclaimed for Kshs. 4,500,000/- allegedly lost in projects under the Claimant's supervision, contending he failed to complete exit clearance. The court held that the 2018 HR Policy & Procedure Manual, not brought to the Claimant's attention, did not apply; the 2016 HR Manual governed, entitling him to gratuity and terminal dues. The incomplete clearance form was attributable to the biased MD, not the Claimant. The Counterclaim, being unproven and an attempt to punish the whistleblower, failed. However, the Claimant was not entitled to automatic renewal and could not sustain the unfair termination claim. The court ordered payment of terminal dues, with tabulation and a report to court within 14 days for entry of final figures.

Key legal issues

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01

Legitimate expectation of renewal of a fixed-term contract

Holding

The Claimant had an expectation of renewal but was not entitled to automatic renewal; non-renewal did not amount to unfair termination

Reasoning

The Claimant relied on paragraph 4.8(a) of the 2016 HR Manual and case law on legitimate expectation. The court accepted he had an expectation but held he was not entitled to automatic renewal. The Respondent's right to reorganize its business prevailed, so the non-renewal did not constitute unfair or unlawful termination.

p. 8
02

Applicable HR Manual (2016 vs 2018)

Holding

The 2018 HR Policy & Procedure Manual did not apply to the Claimant; the 2016 HR Manual governed

Reasoning

The 2018 Manual was not brought to the attention of the Claimant or signed by employees, and the Respondent filed only extracts. A manual hidden from employees cannot override the one signed and made known to them. Therefore the gratuity and other terms in the 2016 Manual remained operative.

p. 5
03

Terminal dues and clearance

Holding

The Claimant was entitled to payment of terminal dues including gratuity notwithstanding the disputed clearance

Reasoning

The court found the clearance form incomplete only because the MD, who was biased against the Claimant over his whistleblowing, refused to sign. The Respondent's suspension of dues processing was an attempt to penalize the Claimant. Terminal dues including gratuity per the 2016 Manual were payable.

p. 8
04

The Counterclaim for Kshs. 4,500,000/-

Holding

The Counterclaim was rejected; the alleged loss was traceable to the whistleblowing incident against the MD and the Respondent failed to prove it against the Claimant

Reasoning

The court observed the claim was 'spurious' and that the loss arose from a whistleblowing incident concerning the MD's office. The Respondent should have looked to its management for recovery rather than imposing it on the Claimant. No breakdown or proof of loss attributable to the Claimant was adduced.

p. 8

Legal principles established

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  • A human resource manual not brought to the attention of employees cannot override the manual that was brought to their attention and signed by them, and cannot be used to backtrack on contractual obligations
  • An employer cannot rely on an incomplete clearance form where the failure to sign is attributable to its own biased officer; failure to complete clearance by the employer is not a basis to deny an employee his dues

Court orders

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  1. 1.The Respondent to pay the Claimant his terminal dues including gratuity as per his contract of employment since the 2018 HR procedures manual does not apply to him
  2. 2.Tabulation of dues to be made and a report made to Court within 14 days, after which the final figures will be entered in the judgment, since the Respondent has to calculate the gratuity due to complete and finalize the termination

Authorities

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Legislation

  • Evidence Actsection 107(1)(2)
  • Employment Actsection 74(1)(f)
  • Leadership and Integrity Act, 2012section 46

Cases cited (11)

  • Teresa Carlo Omondi v Transparency International - Kenya
    [2017] eKLR
  • Geofrey Kariuki Mwaniki v Managing Director Nanak Trucking Co. Ltd
    [2013] eKLR
  • Amatsi Water Services v Francis Shire Chachi
    [2018] eKLR
  • Margaret A Ochieng v National Water Conservation & Pipeline Corporation
    [2014] eKLR
  • Bernard Wanjohi Muriuki v Kirinyaga Water & Sanitation Company Limited & another
    [2012] eKLR
  • Isaiah Makhoha v Basco Products (K) Ltd
    [2014] eKLR
  • Stephen M. Kitheka v Kevita International Limited
    [2018] eKLR
  • Enid Nkirote Mukire v Kenya Yearbook Editorial Board
    [2022] eKLR
  • Martin Kurla Mwai v Shree Logic Management Consultants Limited
    [2019] eKLR
  • James Ang'awa Okeyo v Kenya Plant Health Inspectorate Services
    [2021] eKLR
  • Daniel Mwanzau Nzioka v Brinks Security Services Limited
    [2020] eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court (claim filed by Memorandum of Claim)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Odhiambo v University of Nairobi Enterprises and Services Limited (Cause E497 of 2021) [2023] KEELRC 994 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/994/eng@2023-04-18

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.