Wambui v Wananchi Sacco Society Limited (Employment and Labour Relations Cause 451 of 2017) [2025] KEELRC 1475 (KLR)
The bottom line
#A Kenyan court ordered a SACCO to pay its former loan officer nearly Kshs.500,000 because it couldn't prove he committed the fraud used to fire him.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the termination of the claimant's employment contract was unfair and unlawful
- 2.Whether the claimant is entitled to the reliefs sought
- 3.Whether the respondent's counterclaim is merited
Key legal issues
#Whether the reason for the termination was valid
The respondent failed to prove that the alleged irregularities were done by the claimant; the reason for termination was not valid.
Although the court was satisfied that irregularities and breach of loan policy occurred at Gakindu Branch in 2013 and 2014, the investigation report supporting the alleged fraud was not produced in court. The claimant's unrebuted evidence that the fake documents were prepared by banks and factory managers, and that the system was insecure and editable after approval, meant there was no evidence linking him to the offences. Generalized offences in the termination letter lacked particulars.
Whether a fair procedure was followed before termination
The process did not amount to a fair hearing: the notice was short, did not disclose the disciplinary purpose, did not inform the claimant of his right to accompaniment, and documents and cross-examination opportunities were denied.
The respondent never pleaded that it accorded the claimant a hearing and none of its witnesses indicated a disciplinary hearing was done. The letter inviting the claimant to the Board meeting of 19th April 2017 was silent on its purpose. The claimant's evidence that he was denied documents and the opportunity to cross-examine persons who adversely mentioned him was not rebutted. The court applied section 41 of the Employment Act and the Kenfreight authority.
Remedies for unfair termination
Ten months' salary as compensation (Kshs.722,482.50) based on gross salary of Kshs.72,248.25, considering long service; the retirement-age claim was declined.
Compensation under section 49 principles considered the claimant's long service without proven misconduct. The court awarded ten months' gross salary as at February 2017. The claim for future salary up to retirement age of 60 was rejected as not founded on law or contract.
Whether the respondent's counterclaim was merited
Partially merited: Kshs.227,126 awarded as the outstanding loan balance, per the respondent's own court acknowledgment, not the pleaded Kshs.266,790.70.
The respondent had pleaded a loan deficit of Kshs.266,790.70 after terminal dues, deposits and savings. However, on 15th March 2019 the respondent acknowledged in court that the loan was Kshs.762,968.68 less Kshs.535,841.98 recovered, leaving Kshs.227,126. The court awarded the acknowledged figure.
Legal principles established
#- An employer must prove both a valid and fair reason for termination and that a fair procedure was followed; the burden of proof lies on the employer under section 45 of the Employment Act.
- Where the investigation report and other evidence alleged to support misconduct are not produced in court, the employer fails to prove the validity of the reason for termination.
- A disciplinary hearing notice that is too short, does not disclose the purpose of the meeting, and does not inform the employee of the right to be accompanied, does not amount to a fair hearing under section 41 of the Employment Act.
Court orders
#- 1.Award of Kshs.722,482.50 to the claimant being ten (10) months' salary as compensation for unfair termination
- 2.Less loan balance of Kshs.227,126.00 due to the respondent on its counterclaim
- 3.Net due to the claimant: Kshs.495,356.50
- 4.The award is subject to statutory deductions
- 5.The claimant is awarded costs plus interest from the date of the judgment
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Court of Appeal
- Not stated in judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (the matter came up for fresh hearing 'as directed by the Court of Appeal'); no specific constitutional or statutory provision invoked for jurisdiction.
Relief refused
#Claim for Kshs.13,871,664 being salary for 16 years before normal retirement at age 60
The claim was not founded on any law or on the claimant's written contract of employment
Portion of the respondent's counterclaim (Kshs.266,790.70 as pleaded)
The respondent acknowledged in court that the outstanding loan was Kshs.227,126, which is the amount awarded
Costs
The claimant is awarded costs plus interest from the date of this judgment.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
I find that the respondent has proved that it followed a fair procedure before terminating the claimant's employment. This finding plus the earlier finding that there was no valid reason to justify the termination, I proceed to hold that the termination of the claimant's contract of employment was unfair and unlawful within the meaning of section 45 of the Employment Act.
Consequently, I find that respondent has not proved by evidence that the alleged irregularities were done by the claimant. As such, I must hold that the reason for the termination was not valid.
Such process cannot amount to fair hearing. First, the notice was too short. Second, the letter did not indicate that meeting was for his disciplinary hearing.
The claim for Kshs.13,871,664 being the salary he expected to earn before reaching normal retirement age of 60 years, is declined because it is not founded on any law or his written contract.
a. Award of…………………………Kshs.722,482.50 b. Less loan balance…………………Kshs.227,126.00 Net due Kshs.495,356.50 c. The award is subject to statutory deductions. d. The claimant is awarded costs plus interest from the date of this judgment.
Issues in the judgment
#Internal contradiction on the fair-procedure finding: the court detailed four defects in the disciplinary process and held the process 'cannot amount to fair hearing', yet immediately afterwards stated the opposite, that the respondent proved a fair procedure, while still concluding the termination was unfair.
Inconsistent dates for the dismissal letter: paragraph 10 refers to 'a letter dated 3rd July 2017' while the termination letter reproduced at paragraph 17 is dated 3rd June 2017 and takes effect from 2nd June 2017.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wambui v Wananchi Sacco Society Limited (Employment and Labour Relations Cause 451 of 2017) [2025] KEELRC 1475 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1475/eng@2025-05-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.