Eldotec Consultancy Services Ltd v Otieno & another (Employment and Labour Relations Cause E019 of 2023) [2025] KEELRC 2078 (KLR)
The bottom line
#A Kenyan court ordered a former employee to repay Kshs 409,359 in overpaid terminal dues because a signed written separation agreement could not be overridden by an unproven verbal promise.
What this practically means
#Executive summary
#Key legal issues
#Whether the mutual separation agreement dated 17th May 2023 was varied by a subsequent oral agreement to pay 52 weeks instead of 26 weeks
The court found no proof of the alleged oral variation; the written agreement remained binding and the excess payment of Kshs. 409,359.44 was made in error and is recoverable
The 1st Respondent alleged an oral agreement doubling the release package to 52 weeks, relying on the payslip and discharge voucher. Citing National Bank of Kenya v Pipeplastic Samkolit, the court held that a party seeking to upset a contract must plead and prove fraud, coercion or undue influence. The 1st Respondent pleaded no such vitiating factors and adduced no proof of the oral variation, so the executed written agreement governed the dues payable.
Whether the 1st Respondent's counterclaim for unfair termination was merited
The counterclaim was dismissed because the employment ended by mutual separation under a signed agreement, not by unfair termination
Both parties alluded to the mutual separation agreement of 17th May 2023, which evidenced a consensual end to employment. The 1st Respondent did not plead coercion, duress, misrepresentation or lack of capacity. Having executed and initialled the agreement, he could not claim he was unlawfully and unfairly terminated, and the claims for notice pay and house allowance fell away.
Whether the 2nd Respondent (bank) was liable to refund the overpaid funds
The claim against the 2nd Respondent was dismissed; it had already disbursed the funds before being served with the freezing order
The account statements showed that by 2nd June 2023 the funds had been disbursed, leaving only Kshs. 725.90 by 6th June 2023. The bank was only served with the court order of 7th December 2023 directing a joint deposit, by which time the account held insufficient funds. The court found no proof of the allegations of collusion or failure to act on the Claimant's instructions.
Legal principles established
#- A contract can only be set aside if shown to have been procured through fraud, coercion or undue influence, and the party alleging such grounds must plead and prove them
- In the absence of proof of a subsequent oral agreement varying a written separation agreement, the written agreement's terms bind the parties and payments outside it are recoverable as money paid in error
Court orders
#- 1.Judgment entered for the Claimant against the 1st Respondent in the sum of Kshs. 409,359.44 as refund of overpaid terminal dues
- 2.The 1st Respondent's counterclaim is dismissed
- 3.The case against the 2nd Respondent is dismissed
- 4.The 1st Respondent shall pay the 2nd Respondent's costs
- 5.No order for costs for the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (claim founded on section 19(1)(c) of the Employment Act 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Eldotec Consultancy Services Ltd v Otieno & another (Employment and Labour Relations Cause E019 of 2023) [2025] KEELRC 2078 (KLR)", Case Analysis (2025). Not stated in the judgment (a test suit related to ELRC Appeals No. E017, E018, E019, E020 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2078/eng@2025-07-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.