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ELRCDismissedCause No E898 of 2024· [2025] KEELRC 2907 (KLR)
Chekati v Printing Services Limited (Cause E898 of 2024) [2025] KEELRC 2907 (KLR)
Employment and Labour Relations Court of Kenya
24 October 2025
1,685 words in judgment
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#What this practically means
#Executive summary
#This ruling by the Employment and Labour Relations Court at Nairobi, delivered by Agnes Kitiku Nzei, Judge, on 24th October 2025, determines a preliminary objection raised by the Claimant, a former employee, against the Respondent employer's Counter-Claim. The Claimant's Memorandum of Claim sought declarations of unfair termination and compensation exceeding Kshs.22 million. The Respondent denied the claim, justified the termination, and counter-claimed for approximately Kshs.254 million in alleged embezzled monies, comprising unauthorised withdrawals, unauthorised service and leave pay, conflict-of-interest dealings, and losses from procurement violations and fictitious invoices. The Claimant objected that the Court lacked jurisdiction over the Counter-Claim, contending that the germane issues concerned conversion, a tort, and debt recovery, falling outside Article 162(2)(a) and (3) of the Constitution and Section 12 of the ELRC Act. The Court held that Article 162(2)(a) and Section 12(1)(a) of the ELRC Act confer exclusive jurisdiction over all disputes relating to or arising out of employment, that employment contracts are contracts to which ordinary contractual principles apply, and that an employer alleging conversion or misconduct by a claiming employee in the course of employment may properly counter-claim. Relying on Paramount Bank Ltd v Vaqvi Syed Qamara & Another [2017] eKLR, the Court dismissed the preliminary objection with costs to the Respondent and directed that the Counter-Claim proceed to trial alongside the Claim.
Key legal issues
#01
Whether the ELRC has jurisdiction over the employer's Counter-Claim pleaded as conversion, debt recovery, conflict of interest and procurement malpractice
Holding
The Court has jurisdiction; the matters pleaded in the Counter-Claim arise out of the employment relationship and are connected to the employment contract.
Reasoning
Article 162(2)(a) establishes the Court for employment and labour relations disputes and Section 12(1)(a) of the ELRC Act grants exclusive jurisdiction over disputes relating to or arising out of employment. Employment contracts are contracts in law to which ordinary contractual principles apply. An employer alleging conversion of funds or misconduct by a claiming employee in the course of employment may validly counter-claim. Parties cannot purport to limit the Court's jurisdiction.
p. 4
Legal principles established
#- All matters touching on and arising from an employment contract or employer-employee relationship fall squarely within the exclusive jurisdiction of the ELRC, including an employer's counter-claim for losses arising from the employment
- An employer who alleges that his money was unlawfully withdrawn or converted by a claiming employee in the course of employment may properly counter-claim against such employee
- An employee can be held liable to compensate the employer for proved loss arising from breach of the employment contract
Court orders
#- 1.The Preliminary Objection dated 28th February, 2025 is dismissed with costs to the Respondent/employer
- 2.The Counter-Claim shall go for trial alongside the suit/claim in accordance with the applicable Rules of Procedure
- Jurisdiction invoked
- Article 162(2)(a) and (3) of the Constitution and Section 12(1)(a) of the Employment and Labour Relations Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Chekati v Printing Services Limited (Cause E898 of 2024) [2025] KEELRC 2907 (KLR)", Case Analysis (2025). Cause No E898 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2907/eng@2025-10-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.