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ELRCDismissed· [2025] KEELRC 566 (KLR)

Kanyangi v University of Nairobi Enterprises and Services Limited (Employment and Labour Relations Cause E804 of 2023) [2025] KEELRC 566 (KLR)

Employment and Labour Relations Court
27 February 2025
6,266 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court dismissed a former procurement officer's claim for Ksh. 1.8 million in terminal dues because he sued before finishing his employer's clearance process.

What this practically means

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Executive summary

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The Claimant, formerly the Respondent's Procurement Officer under a fixed-term contract, resigned on 19th December 2022, with resignation effective 18th January 2023, and was issued a Clearance Certificate on 18th January 2023. He sought Ksh. 1,800,876.86 in gratuity plus interest, contending the Respondent refused to release his terminal dues. The Respondent resisted, asserting the Claimant had not finalized clearance because of an outstanding audit query in the Auditor General's report dated 27th June 2023 concerning an irregularly awarded staff medical insurance tender to a firm later placed under statutory management. The court framed two issues: whether the Claimant completed the clearance process and whether the Respondent was obliged to release his dues. It held that under clause 9.10 of the Respondent's HR Manual, the separation process is cumulative and only closes when the Human Resource Office computes and releases terminal dues. Since the audit query was flagged before computation, it fell within the clearance process and was a historical liability (relating to FY 2020/21) which the Respondent was entitled to raise. The court found the Claimant legally responsible for the procurement process as head of procurement and de facto committee secretary under section 46(4)(c) of the Public Procurement and Asset Disposal Act. It rejected the Claimant's post-employment disciplinary control argument, holding parties may settle contract-related liabilities at exit. Notably, the court found the Respondent's officers backdated a letter of 18th January 2023 to serve an ulterior purpose, conduct it deprecated. The claimant's authorities on post-employment claims were distinguished; the unpleaded resignation-copied-to-HR argument was disregarded. The suit was dismissed as premature, with each party bearing own costs.

Key legal issues

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01

Whether the Claimant completed the clearance process

Holding

The Claimant had not finalized the clearance process; the audit query was raised before computation and payment of terminal dues, hence fell within the clearance process

Reasoning

Clause 9.10 of the HR Manual sets out a cumulative separation procedure culminating in computation of dues by the Human Resource Office under clause 9.10(i). Until computation occurred, the Respondent remained entitled to raise outstanding issues including the audit query. The query related to FY 2020/21 and so was a historical, not future, liability raised at the tail end of the clearance process.

p. 8
02

Whether the Respondent's letter of 18th January 2023 was genuine

Holding

The court found the letter was backdated to serve an ulterior purpose, since the audit report it referenced was only received on 27th June 2023

Reasoning

The Respondent's witness admitted receipt of the Auditor General's report on 27th June 2023. It was therefore inconceivable that the Respondent could have written on 18th January 2023 about queries flagged in a report prepared six months later. The forwarding of the letter on 12th September 2023, after a demand letter, confirmed the manipulation. The court deprecated the conduct but decided the matter justly on the whole evidence.

p. 7
03

Whether the Respondent was exercising post-employment disciplinary control

Holding

No; demanding that the Claimant address the audit query was part of ascertaining liabilities during the clearance process, not disciplinary control

Reasoning

An employer is not barred from seeking indemnity from a departing employee for losses caused by the employee's actions, as evidenced by section 19(1)(d) of the Employment Act. Parties to a closed contract may settle associated liabilities during clearance. The claimant's authorities on post-employment disciplinary jurisdiction were distinguished because the instant case rests on an HR Manual regulating separation.

p. 9
04

Responsibility for the impugned tender

Holding

In law the Claimant was responsible for the procurement process as head of procurement and de facto member/secretary of the Tender Evaluation Committee

Reasoning

Under section 46(4)(c) of the Public Procurement and Asset Disposal Act the head of procurement serves as secretary to the evaluation committee, so the Claimant was deemed party to the Committee's reports including the due diligence report, and under sections 47(2) and 84 and the Leadership and Integrity Code he was obligated to render a sound professional opinion.

p. 9

Legal principles established

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  • The clearance/separation process under an HR Manual is cumulative, not disjunctive; a clearance certificate alone does not close the process until terminal dues are computed and released
  • Parties to a closed contract of service may settle liabilities arising from the contract as part of the clearance process without it amounting to post-employment disciplinary control
  • Parties are bound by their pleadings and the court cannot decide a dispute on unpleaded matters

Court orders

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  1. 1.The Claimant's suit was found to have been instituted prematurely before he had finalized clearing with the Respondent
  2. 2.The case fails and is hereby dismissed
  3. 3.Each party shall bear own costs

Authorities

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Legislation

  • Public Procurement and Asset Disposal Actsection 46, section 46(4)(c), sections 47(2), 84
  • Employment Actsection 19(1)(d)
  • ELRC Procedure RulesRule 28(3)

Cases cited (5)

  • Mtati v KPMG Services (Pty) Ltd (J2277/16) [2016] ZALCJHB 403
    [2016] ZALCJHB 403
  • Ansari v Capcom Limited & another [2024] KEELRC 2319 (KLR)
    [2024] KEELRC 2319 (KLR)
  • Achieng’ v Africa Diatomite Industries Limited & another (Employment and Labour Relations Cause 13 of 2020) [2023] KEELRC 293 (KLR)
    [2023] KEELRC 293 (KLR)
  • Odhiambo v University of Nairobi Enterprises and Services Limited (Cause E497 of 2021) [2023] KEELRC 994 (KLR)
    [2023] KEELRC 994 (KLR)
  • South Nyanza Sugar Company Limited v John Gituki Gomba [2022] eKLR
    [2022] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and ELRC Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kanyangi v University of Nairobi Enterprises and Services Limited (Employment and Labour Relations Cause E804 of 2023) [2025] KEELRC 566 (KLR)", Case Analysis (2025). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/566/eng@2025-02-27

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