The Employment and Labour Relations Court has handed the United Nations Sacco a major victory, ruling that the society acted within the law when it declined to renew the contract of its former CEO, Nebart Avutswa. The judgement reinforces the employer's right to discretion in fixed-term contracts.

Justice prompted the ruling after Avutswa sued the Sacco, claiming unfair dismissal, defamation, and constitutional violations following his exit in November 2024. The former chief executive argued he had a "legitimate expectation" of renewal based on his performance, citing a self-evaluation score of 83% (4.14 out of 5) and the society's growth during his tenure.

Discretion Over Expectation

"The petitioner was serving on a fixed-term contract which expired by effluxion of time," the court ruled, dismissing Avutswa's claims. The judge emphasized that an employer is generally not obligated to renew a fixed-term contract unless a specific promise was made—something Avutswa failed to prove.

The court also noted that while Avutswa rated himself highly, the Board was not bound to accept his self-assessment. The Sacco had utilized a "balanced scorecard" framework for appraisals, and the Board's decision to part ways was found to be procedurally sound.

• Defamation Tossed: Avutswa's claim that the Sacco defamed him by reporting his exit to the regulator (SASRA) was also thrown out. The court found the reporting to be a statutory requirement, not malice.
• The Precedent: This ruling sets a significant precedent for corporate Kenya, clarifying that "satisfactory performance" does not automatically guarantee a new contract for top executives.

A Clean Break

The decision allows the UN Sacco, one of the wealthiest in the region, to close this chapter and focus on its strategic direction. For executives on contract, however, it serves as a sobering reminder: in the corporate boardroom, the only guarantee is the expiry date written on the paper.

Avutswa, who had sought millions in compensation, walks away with nothing but the court costs, marking a quiet end to a tenure that once promised long-term leadership.