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ELRCPartially AllowedNot stated in the judgment as provided· [2025] KEELRC 2147 (KLR)

Mbogo v Harley’s Limited (Cause 4 of 2017) [2025] KEELRC 2147 (KLR)

Employment and Labour Relations Court
18 July 2025
3,485 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled an employer fairly suspected an employee of theft, but won only had to pay notice pay because it skipped the proper disciplinary hearing.

What this practically means

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Executive summary

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The claimant, formerly employed by the respondent as a warehouse assistant (confirmed permanent in July 2016), claimed damages of Kshs. 205,368/- (12 months' salary) for what he pleaded was a redundant, unfair and unprocedural termination on 30th August 2016, plus a certificate of service and costs. The termination followed the discovery of missing pharmaceutical drugs (Isoptin and others worth over Kshs. 1 million) at the respondent's warehouse; the claimant and colleagues were arrested, released on police bail, cleared by police, and then issued with termination letters stating their services 'will not be required'. The respondent maintained the claimant was negligent and part of a syndicate responsible for the loss and had been accorded a fair hearing. The court framed three issues: redundancy, fairness/unlawfulness of the termination, and entitlement to reliefs. It held the termination was not redundancy since the employee was not innocent but faced theft allegations. On substantive fairness, guided by Galgalo Jarso Jillo and Kenya Revenue Authority v Gitahi, the court found the employer genuinely and reasonably believed the claimant was responsible, satisfying sections 43 and 45(2). However, the 30th August 2016 meeting was an investigation report, not a section 41 disciplinary hearing; the claimant was not warned of its nature nor of his right to accompaniment, so the termination was procedurally unfair. The declaration of redundancy and the pleaded 12 months' compensatory damages were refused; the claim was allowed only in part, with judgment for one month's notice pay of Kshs. 17,114 with interest from filing, a certificate of service under section 51, and costs of the suit to the claimant.

Key legal issues

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01

Whether the termination amounted to redundancy

Holding

Not redundancy; the claimant was facing theft allegations and was not an innocent employee whose services became superfluous.

Reasoning

The court defined redundancy under the Employment Act as loss of employment through no fault of the employee. The termination letter did not state a reason, but the surrounding circumstances - the police report, arrest, suspension letter citing pending investigations - showed the termination was informed by the alleged theft. In redundancy the employee must be at no fault, so the declaration of redundancy failed.

p. 4
02

Substantive fairness - whether the reason for termination was valid

Holding

The respondent had a justified/reasonable basis to suspect the claimant and colleagues were responsible for the missing drugs; substantive fairness was satisfied.

Reasoning

Relying on section 43 of the Employment Act and the Jillo and KRA decisions, the court held the employer need only show it genuinely believed on reasonable grounds that the reasons existed. The audit findings, incomplete ledgers, police report and the claimant's own cross-examination concession established a reasonable basis for suspicion on a balance of probability, even though police cleared him.

p. 6
03

Procedural fairness under section 41 of the Employment Act

Holding

The termination was procedurally unfair; the meeting of 30th August 2016 was an investigation report, not a disciplinary hearing under section 41.

Reasoning

The 30th August 2016 document was an investigation meeting convened to conclude investigations, not a disciplinary hearing. The claimant was not warned it was disciplinary, not informed of his right to be accompanied by a shop floor union representative or fellow employee, and termination letters were pre-agreed before explanations were heard. Section 41 process was therefore not undertaken before termination.

p. 7
04

Reliefs payable

Holding

Only one month's notice pay (Kshs. 17,114) with interest, a certificate of service under section 51, and costs were awarded.

Reasoning

Having found substantive justification but procedural unfairness, the court limited compensation to one month's notice pay, declining the pleaded 12 months' compensatory damages of Kshs. 205,368/-. A certificate of service was ordered under section 51 of the Employment Act.

p. 7

Legal principles established

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  • An employer need only prove it genuinely believed, on a reasonable basis, that the grounds for termination existed at the time; the ground need not in fact have existed, applying the band of reasonable responses test.
  • A meeting held to conclude investigations, at which the employee is not warned it is a disciplinary hearing nor informed of the right to be accompanied, does not satisfy section 41 of the Employment Act; termination without that process is procedurally unfair.
  • Redundancy requires loss of employment through no fault of the employee; a termination informed by theft allegations is not redundancy.

Court orders

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  1. 1.Notice pay of 1 month salary of Kshs. 17,114 with interest at court rates from date of filing suit
  2. 2.Certificate of service to issue under section 51 of the Employment Act
  3. 3.Costs of the suit to the claimant

Authorities

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Legislation

  • Employment Actdefinition of redundancy (section 2)
  • Employment Actsection 45(2)
  • Employment Actsection 43
  • Employment Actsection 41
  • Employment Actsection 51

Cases cited (4)

  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • Galgalo Jarso Jillo v Agricultural Finance Corporation
    [2021] eKLR
  • Kenya Revenue Authority v Reuwel Waithaka Gitahi & 2 others
    [2019] eKLR
  • Matsesho v Newton
    (2022) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Employment Act); specific enabling provision not stated in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Mbogo v Harley’s Limited (Cause 4 of 2017) [2025] KEELRC 2147 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2147/eng@2025-07-18

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.