The National Treasury office building.
The government is facing a fresh legal challenge over a Sh1.6 billion compensation claim by more than 5,000 former civil servants retrenched 26 years ago under a controversial public service downsizing programme.
Fresh court filings show the payout has been stalled by years of bureaucratic hurdles, including the failure to trace thousands of personnel files needed to verify individual claims arising from the retrenchment programme carried out in 2000.
Officials say verification has also been complicated by repeated government restructuring, with some of the ministries where the affected workers served no longer existing in their original form.
The former workers have returned to court seeking orders to compel the attorney-general and the National Treasury to pay the long-outstanding award, arguing that more than two decades after their retrenchment and over a decade after the courts ruled in their favour, they are yet to receive their compensation.
Fresh court filings show the payout has been stalled by years of bureaucratic hurdles.
The dispute stems from the government's Civil Service Reform Programme, under which thousands of public servants from various ministries were retrenched or forced into early retirement. The exercise aimed at reducing the size of the government workforce and cutting expenditure.
But in a landmark judgment delivered in 2012, the High Court declared the retrenchment exercise unlawful, unconstitutional and in breach of employment laws. The court found that the exercise breached employment protections and public service rules.
It later awarded the claimants compensation, including salary arrears, damages, pension-related payments, costs and interest.
However, despite the issuance of decrees and certificates of costs, payment has remained elusive.
Court documents filed by the National Treasury show that a certificate of costs amounting to Sh1.65 billion was issued in July 2020 but no payment has been made.
The claimants’ advocates argue that the government has failed, refused or neglected to settle the decretal amount despite repeated demands.
"The applicants obtained a valid judgment, decree, and certificate of costs in their favor," the claimants state in their submissions.
"Despite repeated demands and the lapse of over five years since the issuance of the Certificate of Costs in 2020 and over a decade since the initial judgment in 2012, the respondents have failed, refused, or neglected to settle the decretal amount."
Missing files
The government, however, attributes the delay to difficulties in verifying individual claims for thousands of beneficiaries drawn from different ministries and departments.
According to a replying affidavit sworn by National Treasury Principal Secretary Chris Kiptoo, an inter-ministerial committee was established to facilitate implementation of the decree.
The committee found that computation of the final amounts payable required retrieval and verification of personnel records for all affected workers.
Mr Kiptoo told the court that only 2,719 personnel files had been traced and verified, while 2,412 files remained missing.
"To date, only 2,719 files have been successfully retrieved and verified, while 2,412 files remain missing, thereby hindering final computation of the decretal sum," he stated.
The Treasury further said the delay was not caused by refusal to comply with the court judgment but by administrative challenges arising from the age and complexity of the claim.
National Treasury Principal Secretary Chris Kiptoo when he appeared before the National Assembly Public Accounts Committee at County Hall, Nairobi on March 25, 2026.
The claimants reject that explanation, arguing that the government has had years to resolve the issue and cannot continue using internal administrative processes to delay satisfaction of a lawful court decree.
The case affects more than 5,000 former public servants who worked in ministries that have since undergone restructuring, mergers or renaming, making retrieval of historical records difficult.
Government correspondence shows officials have been exchanging letters for several years while seeking records and funding for settlement of the award.
In 2022, the Attorney-General's office acknowledged that the matter involved more than 5,100 claimants from multiple ministries and said consultations were ongoing to determine modalities for payment.
Subsequent reports prepared by an inter-ministerial committee show that the Ministry of Public Service requested funding from the National Treasury while officers continued tracing personnel files across government departments.
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