Mwonya v Egerton University (Cause E036 of 2022) [2025] KEELRC 307 (KLR)
The bottom line
#Kenya's Employment Court ruled that money an employer deducts but fails to remit to pension schemes or SACCOs must be refunded to the employee, awarding a retired professor over Kshs 10 million.
What this practically means
#Executive summary
#Key legal issues
#Whether the ELRC has jurisdiction over claims for gratuity, unremitted pension deductions and unremitted SACCO deductions
The court has jurisdiction; the cause of action arises from the employment contract and relationship, and unremitted deductions are unlawfully withheld salary and emoluments refundable to the employee, not civil debts outside the court's mandate.
The employment relationship from 1987 to 2021 was not contested, so any claim arising from it falls under Article 162(2)(a) and Section 12 of the ELRC Act. Monies deducted from salary but not remitted to the pension scheme or SACCOs are unlawful deductions under Sections 17 and 19 of the Employment Act. It would have been misjoinder to include the SACCOs or pension scheme, who never received the monies. The employer's failure to prove remittance, despite its statutory duty under Sections 10 and 74 to keep records, confirms liability.
Whether the claimant is entitled to gratuity notwithstanding membership of a pension scheme (Section 35, Employment Act)
Gratuity is payable. Although the law bars concurrent receipt of pension and gratuity, the respondent's failure to remit pension contributions deprived the claimant of pension eligibility, leaving the contractual gratuity as her fallback; the court applies the more favourable option.
Clause 13 of the letter of appointment provided for gratuity of 31% of annual basic salary upon successful completion of the contract. The respondent admitted the sum of Kshs10,168,766.40 through its legal officer via a tabulation produced in evidence and never disowned or countered. While Section 35 disallows gratuity for a pension scheme member, the respondent's non-remittance meant the claimant could not access pension, and the court applies the more favourable option to the employee. The claim is a refund of unremitted deductions, not a pension claim colliding with gratuity.
Whether unremitted SACCO deductions are recoverable by the claimant in this court
Yes. The claims of Kshs75,000/= (Egerton University Sacco) and Kshs13,500/= (Winam Sacco) were not denied and no evidence of payment or remittance was availed; both sums are awarded.
The respondent argued these are civil debts recoverable under the Co-operative Societies Act by the SACCOs or the Commissioner of Co-operatives, but the court held the deductions were made under the employment relationship and, being unremitted, are unlawfully withheld emoluments refundable to the employee. The respondent did not discharge its duty under Sections 10 and 74 of the Employment Act to prove remittance, and the monies lawfully belong to the claimant.
Whether the claimant should be barred from the reliefs for alleged mismanagement as vice-chancellor
No. No evidence of mismanagement or inaction was availed, the claimant was never surcharged or charged, and the respondent filed no counterclaim; the allegations are mere allegations outside the subject matter of this cause.
RW1 conceded that the respondent's financial woes preceded and continued beyond the claimant's tenure and were not attributable to her, and that she was never surcharged or prosecuted. The suspension attempts were quashed by the court in Nakuru ELRC JR No. 2 of 2018. Without a counterclaim or evidence, the court cannot deny terminal dues on that basis.
Legal principles established
#- Deductions made from an employee's salary but not remitted to the intended institutions (pension scheme or SACCOs) are unlawfully withheld salary and emoluments, refundable and payable to the employee by the employer, and are justiciable in the ELRC.
- Where a contract or admission provides for gratuity and pension concurrently, which Section 35 of the Employment Act disallows, the court applies the more favourable option to the employee.
- An employer's formal admission of a claim, once made, is binding and may only be set aside on established grounds such as mistake, misrepresentation or fraud.
Court orders
#- 1.Awarded the claimant gratuity and unremitted pension of Kshs10,168,766/=, unremitted deductions to Egerton University Sacco of Kshs75,000/= and unremitted deductions to Winam Sacco of Kshs13,500/=, totalling Kshs10,257,266/=
- 2.Costs of the cause to the claimant
- 3.Interest to the claimant at court rates from the date of the judgment till payment in full
- 4.Declared that the award is NOT subject to any deductions
- Jurisdiction invoked
- Article 162(2)(a) of the Constitution and Section 12 of the Employment and Labour Relations Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwonya v Egerton University (Cause E036 of 2022) [2025] KEELRC 307 (KLR)", Case Analysis (2025). ELRC Cause (Nakuru), Statement of Claim dated 26th September, 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/307/eng@2025-02-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.