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ELRCPartially AllowedCause No E034 of 2024· [2025] KEELRC 2779 (KLR)

Ngatia & 61 others v Univeristy; University of Eldoret (Third party) (Cause E034 of 2024) [2025] KEELRC 2779 (KLR)

Employment and Labour Relations Court
9 October 2025
6,918 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled Moi University's 2001 retrenchment of 62 staff was procedurally unfair, awarding each four months' salary but rejecting most monetary claims for lack of proof.

What this practically means

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Executive summary

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Sixty-two former employees of Moi University, retrenched on 31st March 2001 during a Government-led Civil Service Reform and Retrenchment Program, sued for Kshs. 31,141,365 in unpaid dues comprising unsupplied uniforms, overtime, the balance of the golden handshake, training, transport, leave allowances, gratuity and severance, and declarations that the retrenchment was unlawful and discriminatory. Moi University defended the retrenchment as a lawful government initiative and joined the University of Eldoret as Third Party seeking contribution or indemnity under a 2014 handover agreement. The court found the retrenchment substantively justified as a genuine government cost-reduction exercise but procedurally unfair: no evidence showed written notice to the employees' union KUDHEIHA or the local Labour Officer as required under section 16A of the repealed Employment Act, and the retrenchment letters were undated. However, the specific monetary claims failed for want of proof: witnesses conceded the CBA did not provide for training, transport or golden handshake payments, no evidence showed the Kshs. 7.65 billion budget allocation was disbursed to the university, and cheque schedules confirmed severance and gratuity were paid. The court awarded each Claimant four months' consolidated salary as compensation for procedural unfairness, following Kenya Airways and Kenya Plantation authorities. The Third Party claim failed entirely, as the University of Eldoret did not exist when the retrenchment occurred and the handover agreement assigned no such liabilities. General damages were declined for lack of proof. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether the retrenchment was procedurally fair

Holding

Procedurally unfair for want of notice to employees, KUDHEIHA union and the local Labour Officer

Reasoning

Section 16A of the repealed Employment Act and the principles in section 40 of the Employment Act, 2007 require notice to the employee, union and Labour Officer and a compliant selection criterion. Despite the Respondent's assertion of consultation, no minutes of consultative meetings or notices were produced; the retrenchment letters were undated, undermining the claim of adequate notice. The reason was genuine but the procedure defective.

p. 11
02

Whether the Claimants proved the monetary claims

Holding

No; the specific claims for uniforms, overtime, golden handshake balance, training, transport and leave were unsubstantiated

Reasoning

The Claimants bore the burden of proof. No requisition records, overtime sheets, or employment records were produced; witnesses conceded during cross-examination that the CBA did not provide for training, transport or golden handshake; cheque release schedules confirmed severance and gratuity were paid. Only the Budget Speech was produced, with no evidence of disbursement to the Respondent.

p. 12
03

Remedy for procedurally unfair retrenchment

Holding

Compensation of four months' consolidated salary per Claimant awarded in lieu of the monetary claims

Reasoning

Following Kenya Airways and Kenya Plantation authorities, where redundancy is substantively justified but procedurally unfair, compensation is the suitable remedy. Considering the government-driven nature of the exercise and substantial terminal dues already paid, four months' consolidated salary was held fair and reasonable.

p. 13
04

Third Party liability

Holding

University of Eldoret bears no liability or contribution

Reasoning

The retrenchment occurred in March 2001, before the Third Party's charter in February 2013. The Partial Handing Over Agreement of 15th December 2014 contained no clause assigning retrenchment liabilities, and the Third Party never employed the Claimants. The claim for contribution was misconceived and the Third-Party notice dismissed.

p. 13

Legal principles established

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  • Redundancy or retrenchment requires due notice to the employee, the relevant union and the local Labour Officer, and a compliant selection criterion; failure to involve the union or issue proper notice renders the process irregular and amounts to unfair termination.
  • Where redundancy is substantively justified but procedurally unfair, compensation rather than reinstatement is the appropriate remedy.
  • A legal entity cannot be held liable for obligations arising before its existence.
  • The burden of proving employment claims such as unpaid overtime lies on the employee.

Court orders

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  1. 1.A declaration that the retrenchment of the Claimants by the Respondent was procedurally unfair for want of notice to the employees, employees' union and Labour Officer
  2. 2.The Respondent shall pay each of the sixty-two (62) Claimants compensation equivalent to four (4) months' consolidated salary based on their last rate of pay for the procedural unfairness in the retrenchment process
  3. 3.The prayer for payment of golden handshake at Kshs. 240,000 was dismissed as not proved
  4. 4.All other claims, including for uniforms, training, transport allowances, leave dues and overtime allowance, dismissed for want of proof
  5. 5.Each party shall bear its own costs
  6. 6.The Third-Party notice dated 7th December 2021 dismissed with no orders as to costs

Authorities

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Legislation

  • Employment Act (repealed) (Cap. 226)section 16A, section 16A(1)(f)
  • Employment Act, 2007section 40
  • Evidence Actsection 107
  • Limitation of Actions Actsix-year limitation period for contract
  • Universities Actre-chartering of universities
  • Constitution of Kenyaalleged violation (by Claimants)
  • Presidential Legal Notice No. 125 of 2010 / Chepkoilel University College Order, 2010establishment of Chepkoilel as constituent college
  • Presidential Legal Notice No. 4 of 2010 (as pleaded by Third Party)establishment of Chepkoilel Campus
  • Moi University Charter, 2013clause 5.3.3
  • University of Eldoret Chartertransitional provisions

Cases cited (2)

  • Kenya Airways Ltd v Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • Kenya Plantation & Agricultural Workers Union v James Finlay (K) Ltd
    [2018] eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction over claims of unfair termination and retrenchment benefits

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, "Ngatia & 61 others v Univeristy; University of Eldoret (Third party) (Cause E034 of 2024) [2025] KEELRC 2779 (KLR)", Case Analysis (2025). Cause No E034 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2779/eng@2025-10-09

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