https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1438

REPUBLIC OF KENYA IN THE EMPLOYMENT & LABOUR RELATIONS COURT AT NAKURU ELRC CAUSE NO. E060 OF 2024 (Before Hon. Lady Justice Anna Ngibuini Mwaure) CYNTHIA CHEPKORIR……………...…………….....… CLAIMANT ERGETON UNIVERSITY……..…………………..…... RESPONDENT VERSUS JUDGMENT Introduction 1. The Claimant filed a Statement of Claim dated 18th September 2024 seeking the following reliefs: a.Service pay (15 days for every year of service), amounting to Kshs.185,477.00/= b.Damages Kshs.200,000.00/= c. Terminal dues a. a. Deferred pay: i. May 2022 - June 2023…….. ….Kshs.907,222.05/= ii. July 2023 - December, 2023… Kshs.333,858.60/= b. Gratuity at 31% of basic monthly salary for a period of ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 1 OF 26 2 years.......................................Kshs.822 ,797.04/= c. Leave days not taken for 72 days…. Kshs.890,289.60/= d.Certificate of Service e.Interest on the above at court rates. f. The Respondent to pay costs of this claim. Claimant’s case 2. The Claimant avers that she was engaged by the Respondent in May 2022 on a one-year contract, renewed in May 2023, serving as employee number 13376 in the Department of Pathology, Main Campus, until the expiry of her contract on 11th May 2024. 3. The Claimant avers that the Respondent failed to honour the contractual terms by not paying her full monthly entitlements of Kshs.110,591/= being basic salary, Kshs.55,286 being house allowance, Kshs.14,000/= being the commuter allowance, and Kshs.5,600/= being medical allowance, together with 36 annual leave days and 31% gratuity on basic salary at the end of the contract. ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 2 OF 26 4. The Claimant asserts that arrears accumulated throughout the contract period, and that the Respondent unlawfully failed to pay her terminal dues, thereby subjecting her to financial hardship and loan defaults. 5. The Claimant maintains that the Respondent’s conduct amounted to breach of contract and unfair labour practices, and despite demand and notice of intention to sue, the Respondent has refused to settle the dues. Respondent’s response to the memorandum of claim 6. The Respondent opposed the statement of claim by filing a response to the statement of claim dated 16th December 2025. 7. The Respondent admits that the Claimant was employed as Lecturer Grade 12 in the Department of Human Pathology under a one-year contract from 11th May 2022 to 12th May 2023, which was renewed for a further year from 11th May 2023 to 10th May 2024, and acknowledges her entitlement to the stipulated salary and allowances. ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 3 OF 26 8. However, the Respondent avers that on 27th November 2023, the Claimant was cautioned by the Deputy Vice-Chancellor (Academic Affairs) for substandard handling of exam booklets, and was thereafter summoned before the Staff Disciplinary Committee on 8th April 2024, which she failed to attend, leading to a deferral by letter dated 8th May 2024. 9. The Respondent maintains that the Claimant’s contract expired on 11th May 2024 without renewal, thereby halting the disciplinary process. 10. The Respondent denies any claims of unpaid dues, asserting that all payments were settled through Pay Change Advice Nos. 96 and 98 of 2024, with Cheque Nos. 201068 and 202842 were deposited on 22nd January 2025 and 21st February 2025, respectively. 11. The Respondent further contends that the Claimant breached the Code of Conduct and Ethics Policy, and prays that the suit be dismissed with costs. Claimant’s evidence in court 12. The Claimant, CW1, adopted her written statement dated 18th September, 2024, together with the ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 4 OF 26 bundle of documents dated even date marked as exhibits 1 to 6 respectively as her evidence-in-chief. 13. In cross-examination, CW1 testified that she was employed as a Lecturer Grade 12. She stated that her contract expired on 13th May 2023 and was renewed the same day. She confirmed receipt of a letter dated 8th May 2024 summoning her to a disciplinary hearing, though she recalled the matter arising earlier in April. She stated that the disciplinary hearing was to address issues concerning her handling of examinations. CW1 further stated that in February 2023, she applied for renewal of her contract and retained a copy of the application. She admitted she did not apply for renewal for the 2024– 2025 period, but maintained her claim for deferred pay amounting to Kshs.907,222/= for May 2022–June 2023, together with additional arrears for July 2023, gratuity, and unpaid leave. She explained that she did not attend the disciplinary hearing because she was a witness in a criminal case, and produced a copy of the summons to attend court. She stated that she was not invited to another disciplinary ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 5 OF 26 hearing thereafter, and that her contract expired on 11th May 2024 without further invitation. 14. In re-examination, CW1 clarified that on the date of the disciplinary meeting, she attended a criminal case and was assured by the Respondent that she would be informed of the next hearing date. She stated that no subsequent communication or invitation was ever issued to her regarding another disciplinary hearing. Respondent’s evidence in court 15. RW1, Janet Bii, the Respondent’s legal officer, adopted her witness statement dated 13th September, 2025, together with the bundle of documents dated even date marked as exhibits 1 to 15 as her evidence in chief. 16. In cross-examination, RW1 testified that CW1 was employed by the Respondent under two successive contracts. The first contract ran from 11th May 2022 to 10th May 2023, following a letter of offer dated 12th April 2022 and accepted on 27th April 2022. The second contract was issued on 15th March 2023, accepted on 5th June 2023, and was to run until 11th May 2024. RW1 confirmed that CW1’s basic salary ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 6 OF 26 was Kshs. 110,059/= and that she was entitled to gratuity at 31% of the basic salary. She reiterated that gratuity of Kshs.299,560/= was paid, subject to 30% tax, with tabulation prepared by the Human Resources office. 17. RW1 further stated that CW1 had been summoned for a disciplinary hearing, but wrote to the chair indicating she had a matter in Kibera. Another hearing was contemplated, but her contract expired before it could be convened. RW1 explained that payslips are issued to staff, though the November 2023 payslip was unavailable due to data protection laws. She stated that in December 2023, the CW1 payslip reflected deferred earnings of Kshs.1,241,080.65/=, though calculations showed Kshs.1,091,565/=. 18. RW1 maintained that the Respondent does not owe CW1 any dues, as she was paid Kshs.762,805.46/= into her KCB account. She emphasized that CW1 was not entitled to 36 leave days per year, nor to cash conversion of leave days. She reiterated that leave applications must be made online, approved by the head of department, and cannot be carried forward. RW1 stated that CW1 was aware of this procedure, as ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 7 OF 26 one logs in using a payroll number. She referred to circulars dated September 2023, 8th April 2024, 9th April 2024, and 18th April 2024, which prohibited the conversion of leave days into cash. She stated that these circulars were addressed to CEOs of State Corporations, pinned on notice boards, and circulated via email, though she did not have photographic evidence of the noticeboard. Finally, RW1 confirmed that NSSF and NHIF contributions were remitted by cheque for all employees. 19. In re-examination, RW1 maintained that gratuity calculations are handled by the Human Resource Department and insisted that no error had occurred in the calculations. She explained that if there had been a mistake, it should have been formally communicated in writing. On deferred pay, she reiterated that the computation was accurate and confirmed, and emphasized that CW1 had received all her dues payable. RW1 clarified that gratuity is only reflected for the months actually worked, and CW1 had not served continuously for 24 months. She referred to the 2013–2017 Collective Bargaining Agreement (CBA), noting that although it was ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 8 OF 26 implemented in 2021, its provisions applied nationally once effected, and salary adjustments followed accordingly. RW1 further stated that CW1 was deducted Kshs.98,246.49/= due to an overpayment, and the court had ruled that a double payment had indeed occurred. 20. The court directed the parties to put in their respective written submissions. Claimant’s submissions 21. The Claimant submitted that entitlement to leave is governed by section 28 of the Employment Act, which provides for a minimum of 21 leave days per year of service, though employers may grant more under internal policies. The Claimant argued that her contract expressly provided for 36 annual leave days, and she worked for two years without taking any leave, thereby accruing 72 days valued at Kshs. 890,289.60/=. The Respondent sought to rely on government circulars dated 27th September 2023 and 9th April 2024, which directed institutions to enforce leave plans and prevent accumulation beyond 30th June 2024. However, the Claimant was not notified of these circulars, no leave plans were prepared for her, ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 9 OF 26 and she was not provided with an email or platform to apply for leave. Moreover, her contract ended in May 2024, prior to the circular deadline. The Respondent therefore failed to facilitate her leave, and the court finds that she is entitled to compensation for the unutilized 72 days, as the argument that payment could not be made under the circulars is untenable. 22. The Claimant relied on the case of John Kyalo Mulela v Pan African Logistics Limited [2017] KEELRC 1059 (KLR), where the Claimant in this case demanded unpaid annual leave at Kshs.244,999/= between 2008 and 2015. Among the claims for compensation for unfair termination, the Claimant demanded unpaid annual leave at Kshs.244,999. This was for the period between 2008 and 2015. The Respondent stated that if he had not taken leave in the previous years, then the annual leave must have been forfeited. The court’s response to this position was that: “There is no provision in the Employment Act which supports forfeiture of annual leave. Annual leave is either utilized by the Employee or paid for in cash by the Employer. Forfeiture of annual leave is a term which is alien to the ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 10 OF 26 Employment Act 2007.” The court found that he was entitled under his contract to 21 days annually. Over a period of 7 years, this would translate into 7 x 21 days = 147 days – 28 days = 119 days of annual leave. 119 x a daily rate of Kshs.2,692 = Kshs.320,348. He was allowed the prayer for annual leave pay at Kshs.320,348/=. 23. In Rumba Mnyika Nguta v Southern Hills Development Agency Limited t/a Radio Kaya [2020] KEELRC 85 (KLR), the court held that: “The Employment Act does not support the leave forfeiture clause, contained in Claimant’s contract. The Court does not agree that leave entitlement was forfeited, when it was not utilized. There is no provision in law, supporting forfeiture. Leave, when not taken, becomes an accrued benefit, which is monetized, and paid out, at the request or demand, of the Employee.” ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 11 OF 26 24. In Joaqim Mbithi Mulinge v Transoceanic Projects & Development [K] Limited [2017] KEELRC 1050 (KLR), the court stated as follows: “There is no employment policy which supersedes the law. The law under Section 28 of the Employment Act 2007 does not sanction the practice of forfeiture of unutilized leave. The law entitles Employees, after 12 consecutive months of service with the Employer, to a minimum of 21 days of fully paid annual leave. There is no provision for forfeiture. The policy of forfeiture of annual leave days, adopted by some Employers, has no foundation in law.” In this case, for the 63 days of annual leave earned but not taken, the employee was awarded annual leave pay at Kshs.411,923/=. 25. The Claimant also relied on the case of Lukalia v West Kenya Sugar Company Limited [2025] KEELRC 1416 (KLR), where the court held as follows: ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 12 OF 26 “The Claimant further prayed for leave dues. Section 28 of the Act provides for annual leave for any employee who works for a minimum of 2 months. The Claimant worked for more than 2 months and was therefore entitled to annual leave. The Respondent stated that the Claimant’s terms of employment did not attract annual leave, meaning that there was an admission that the Claimant never went on annual leave. The Claimant, having worked for the Respondent for the entire period from 2007 to 2016 without leave, I award him the same at 21 days per year, being 189 days. Based on Kshs.429 per day, he is entitled to Kshs.81,081, which I award him.” 26. In Mombasa Coffee Limited v Shuke [2024] KEELRC 444, the court awarded leave pay where the employer failed to produce records as required under Section 74(f) of the Employment Act, holding that employees are entitled to 21 days for each completed year of service. Similarly, in Shah v ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 13 OF 26 Vitafoam Products Limited [2024] KEELRC 2278, the court rejected the employer’s reliance on appointment letters to deny leave, reiterating that forfeiture clauses are unlawful, citing the case of Rumba Mnyika Nguta v Southern Hills Development Agency Limited(supra), which held that unutilized leave becomes an accrued benefit payable to the employee. In David Njoroge Njenga v Getrio Insurance Brokers Limited [2018] KEELRC 2326 (KLR), the court awarded compensation for 94 unutilized leave days, emphasizing the employer’s duty to ensure employees proceed on leave. Accordingly, the Claimant is entitled to payment for the 72 unutilized leave days, amounting to Kshs. 890,289.60/=. 27. On gratuity, the Claimant submitted that both of her contracts expressly provided for 31% of basic salary per year, amounting to Kshs.822,797.04/= for two years, yet only Kshs.279,560.48/= was paid, leaving Kshs.411,398.52/= outstanding. 28. On deferred pay, the Claimant submitted that her payslips show arrears of Kshs.1,241,080.65/=, but only Kshs. 762,805.46/= was paid after unlawful ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 14 OF 26 deductions, contrary to the contract and unsupported by evidence. Reliance is placed on Edgar Kiplangat Mutai v James Kipkech Toroitich Kisa & Another [2022] KEELRC, where the court held that withholding salary without justification is a fundamental breach of contract. 29. On service pay, the Claimant submitted that the Respondent failed to demonstrate NSSF or SHA remittances, entitling the Claimant to Kshs.185,477.00/= under section 35(5) of the Employment Act, as affirmed in Workers & Another v Frankmart Supermarket Limited & Another [2023] KEELRC 28. 30. The Claimant submitted that she is entitled to Kshs. 200,000/= being damages for inconvenience and financial strain, together with a certificate of service, interest at court rates, and costs of the suit under section 27(1) of the Civil Procedure Act. 31. In conclusion, the Claimant urged this Honourable court to enter judgment in her favour and grant costs and interest of the suit. ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 15 OF 26 Respondent’s submissions 32. The Respondent submitted that the Claimant was engaged on a fixed-term contract from 11th May 2022 to 10th May 2024, which lapsed by effluxion of time without renewal. The Respondent also submitted that a fixed-term contract terminates automatically upon expiry and does not create a legitimate expectation of renewal unless expressly promised. Reliance is placed on Margaret A Ochieng v National Water Conservation & Pipeline Corporation [2014] KEELRC 328 (KLR), where the court held that no notice is required upon expiry of a fixed-term contract, and Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho- Kariuki [2017] KECA 194 (KLR), which affirmed that expiry of a contract does not amount to unfair termination. The Respondent further contended that although the Claimant had been cited for dereliction of duty and unprofessional handling of examinations, the disciplinary process could not be concluded as the contract had expired. ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 16 OF 26 33. On remedies, the Respondent submits that gratuity and deferred pay were processed and settled through PCA Nos. 96 and 98 of 2024, evidenced by cheques and deposit slips. The claim for 72 leave days is opposed on the basis of government circulars requiring staff to take leave within the relevant year, with no provision for indefinite accumulation. Reference is made to section 28 of the Employment Act, which grants annual leave but does not permit indefinite carry-over. The Respondent argues that the Claimant produced no leave records or applications to prove denial of leave. 34. On service pay, the Respondent submitted that under section 35(5) of the Employment Act, service pay is only payable where employment is terminated, and the employee is not a member of a pension or gratuity scheme. Since the Claimant’s contract expired naturally and gratuity was already provided, service pay is not applicable. 35. On damages, the Respondent relied on Kenya Revenue Authority v Murgani [2010] KECA 508 (KLR), where the Court held that ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 17 OF 26 damages for breach of employment contract are limited to statutory or contractual provisions. 36. Finally, on costs, the Respondent relied on section 27 of the Civil Procedure Act and submitted that costs follow the event, but the Court retains discretion. The Respondent argued that the Claimant filed suit prematurely before internal processes were concluded and payments finalized, rendering the suit unnecessary. The Respondent therefore prays that the claim be dismissed with costs. Analysis and determination 37. The court has considered the pleadings by both parties together with the rival submissions by both counsels; there are two issues for determination, which are as follows: i. Whether the claim is merited and is the Claimant entitled to the reliefs claimed? ii. Who should bear the costs of the suit? 38. In Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho- Kariuki(supra), where the Court of Appeal stated as follows: ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 18 OF 26 “Bearing the foregoing in mind, we note that fixed term contract carries no rights, obligations, or expectations beyond the date of expiry. Accordingly, any claim based after the expiry of the respondent’s contract ought not to have been maintained. This is in relation to the salary of the months 5th of April up to May, 2010. Similarly, since the respondent’s contract came to an end by effluxion of time any claim for wrongful termination could not be maintained.” 39. In Margaret A Ochieng v National Water Conservation & Pipeline Corporation(supra) the court stated as follows: “Automatic renewal would undermine the very purpose of the fixed-term contract, and revert to indeterminate contracts of employment……. courts have upheld the principle that fixed- term contracts carry no expectancy of renewal, in a catena of judicial authorities…… the court is persuaded that the claim has no merit. The fixed term contract had its own in-built termination notice, in that the date of termination was advised to the claimant on execution of the three-year contract ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 19 OF 26 in December 2008. She knew termination would be upon the lapse of the three years in 2011…” 40. In Transparency International - Kenya v Omondi [2023] KECA 174 (KLR), the Court of Appeal held stated as follows: “We dare say that an automatically renewable fixed-term contract is a contradiction in terms, as it would subject the parties to an indeterminate employment contract. The respondent was under a fixed-term contract with a definite commencement date and termination date. There was no ambiguity created to create an expectation of contract renewal by the appellant’s issuance of a fixed-term contract. The contract terminated automatically when the termination date arrived. Whether a contract with a renewal clause will be extended or not, is an issue that is at the discretion of the employer, and it cannot create a legal right under the doctrine of legitimate expectation.” 41. In this instant case, it is not disputed that the Claimant was engaged by the Respondent as a Lecturer Grade 12 under successive fixed-term ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 20 OF 26 contracts, the first term running from 11th May 2022 to 12th May 2023 and renewed for a further year until 10th May 2024. She was invited to a disciplinary hearing on allegations of substandard handling of exam booklets, but the hearing was deferred and ultimately did not proceed owing to the expiry of her contract. The Respondent contends that the contract lapsed on 11th May 2024 without renewal, thereby bringing the disciplinary process to an end. It further denies liability for any outstanding dues, asserting that all payments were duly settled through Pay Change Advice Nos. 96 and 98 of 2024, with Cheque Nos. 201068 and 202842 were deposited on 22nd January 2025 and 21st February 2025, respectively. 42. The court is in agreement the Claimant’s contract came to an end by effluxion of time and, consequently, she could not be subjected to disciplinary proceedings thereafter. The Claimant nonetheless seeks payment of her final dues, which the court finds she is entitled to upon expiry of the contract. In Odhiambo v University of Nairobi Enterprises and Services Limited [2023] KEELRC 994 (KLR), the court directed the Respondent to ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 21 OF 26 settle the Claimant’s terminal dues, including gratuity under the contract of employment, noting that the 2018 HR Procedures Manual was inapplicable. The court holds the contract of the Claimant expired with effluxion of time. 43. The Claimant’s letter of appointment clearly demonstrates she was on one year fixed contract upto 10th May 2024. She was to be paid the underlisted for her remuneration:- (1) Salary (2) House allowance - Kshs.110,591/= - Kshs.55,286/= (3) Medical allowance - Kshs.5,600/= (4) Commutter allowance - Kshs.14,000/= (5) The earlier contract which was renewed with this one upon expiration provided for 31% gratuity for every year worked based on basic salary. (6) She was entitiled to 36 days’ leave. 44. The Claimant is seeking the following reliefs: (1) Service pay - Kshs.185,477/= ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 22 OF 26 The Claimant terms of contract was a fixed term of one year. She was not declared redundant but her employment terminated by affluxion of time. The prayer for service pay is not applicable and is rejected. (2) Damages of Kshs.200,000/= are in abstract. There is no evidence to support this prayer and no basis for the same. The court cannot grant an uproven and unsubstianted relief. So the same is disallowed. (3) Terminal dues which in particular refer to Deferred pay. The Claimant has not tendered proof of the deferred pay. This court being established to render justice to all the parties without undue regard to technicalities, will give the parties time to reconcile this deferred pay and give clear and supported figures of the same. (4) The same orders given on the deferred pay will also apply to the claimed gratuity. If the Respondent paid gratuity for the 2 years worked, it is a very easy task to produce proof of such payment. ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 23 OF 26 (5) As for leave days, the Claimant needed to demonstrate she applied for leave and the same was denied during those two years. In the absence of any such proof, the court cannot award a blanket figure of Ksh.890,000/=. She can however have equivalent of leave for the final year she worked for the Respondent amounting to Kshs.188,477/=. (6) The Claimant is to be given her certificate of service within 30 days from the date of this judgment. (7) The court will exercise its inherent discretion and order each party to meet their own costs. The case will be mentioned on 1st July 2026 for the parties to give their support documents with clear, precise explanations to enable court finalise on the award and in particular on deferred pay and gratuity. IT IS SO ORDERED. Dated, Signed and Delivered virtually at Nakuru this 28th Day of May, 2026. ANNA NGIBUINI MWAURE JUDGE ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 24 OF 26 ORDER In view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open Court. In permitting this course, this Court has been guided by Article 159(2)(d) of the Constitution which requires the Court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this Court the duty of the Court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes. A signed copy will be availed to each party upon payment of Court fees. ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 25 OF 26 ANNA NGIBUINI MWAURE JUDGE ELRC CAUSE NO E060 OF 2024 JUDGMENT PAGE 26 OF 26