Kalvince Ochieng Akelo v Bulkstream Limited (Consolidated with ELRC Cause Nos. E098 of 2025, E103 of 2025 and E112 of 2025)

ELRC Cause No. E097 of 2025 (Consolidated) JUDGMENT A. INTRODUCTION 1. The four Claimants were, until the end of March 2025, long-serving members of the technical staff of the Respondent, Bulkstream Limited (previously known as Grain Bulk Handlers Limited), a company carrying on business in Mombasa. Each of them was summarily dismissed by a letter dated 28th March 2025, following a disciplinary process that was triggered by an investigation into what the Respondent characterised as a scheme by which overtime hours that had not been worked were fraudulently allocated to members of the technical team, and paid through the payroll, between January and July 2024. 2. Each of the Claimants contends that the dismissal was unfair, procedurally and substantively. Their common refrain is that they had already been disciplined, by way of a first warning letter dated 14th August 2024, and had refunded the excess overtime pay; that the Respondent was therefore not at liberty to visit upon them a second disciplinary process over the same subject matter; and 2

page 2 of 70

ELRC Cause No. E097 of 2025 (Consolidated) that, in any event, the second process was hurried, opaque and unsupported by proof. The Respondent's answer is that the second process was founded on fresh material, a report of the Directorate of Criminal Investigations, which disclosed that the overpayments were not an inadvertent payroll error, as it had initially believed, but the fruit of a corrupt arrangement in which the beneficiaries remitted part of the inflated pay to the clerk who had allocated it. 3. On 9th February 2026, the parties, by consent, consolidated this cause with ELRC Cause No. E098 of 2025, Rambo Mwema v Bulkstream Limited; ELRC Cause No. E103 of 2025, Raphael Ogutu v Bulkstream Limited; and ELRC Cause No. E112 of 2025, Wato Josi Kimambo v Bulkstream Limited, with ELRC Cause No. E097 of 2025 designated as the lead file. In my view, the consolidation was justified. I will say more about it shortly. 4. Further, the parties agreed, again by consent, that the consolidated causes be disposed of on the basis of the pleadings, the witness statements, the documents filed and written submissions, pursuant to Rule 59 of the 3

page 3 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Employment and Labour Relations Court (Procedure) Rules. The Respondent has indicated that its submissions in the lead file apply with equal force to the three other consolidated claims, and the Claimants' advocates have likewise prosecuted the consolidated claims through the submissions filed in the lead file. B. THE CLAIMANTS' CASE 5. The Claimants are represented by the same firm of advocates, and their pleadings are cast in substantially identical terms. Save for the particulars of each Claimant's date of engagement, terminal salary and the sums claimed, the factual narrative and the grounds of complaint are common to all of them. I set out the case as pleaded in the lead file and in Cause Nos. E103 of 2025 and E112 of 2025, whose papers are on record before me, and note where the Claimants' cases diverge. 6. By a Memorandum of Claim filed in 2025, Mr. Kalvince Ochieng Akelo pleaded that he was employed by the Respondent as a Machine Operator on 1st March 2001 and rose through the ranks to the position of Lead Technician, which he held when his employment was terminated on 4

page 4 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 31st March 2025, after a period of service of about twenty-five years. He pleaded that save for the matters that culminated in the termination, he never received any complaint or warning; that he had, indeed, received a letter commending his dedication, hard work and team spirit; and that his terminal salary was Kshs. 101,400/-. 7. He averred that by a letter dated 1st August 2024, served on 2nd August 2024, he was asked to show cause why disciplinary action should not be taken against him for receiving excessive compensation for exaggerated overtime hours, and to respond by 5th August 2024. He contended that he was neither in charge of the allocation, processing nor payment of overtime. A hearing was held on 8th August 2024, following which he was issued with a first warning letter dated 14th August 2024, informing him that he had been found culpable of receiving excess overtime and failing to inform his supervisor. The excess overtime was recovered from him. He was instructed to remit part of it, which he did. He was, he says, entitled to believe that the matter had thereby been brought to a close. 5

page 5 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 8. To his surprise and shock, he received another notice to show cause dated 9th January 2025, which concerned "fraudulent payment of overtime allocation overtime". He resulting pleaded that to excess although differently worded, the second notice raised the same issue as the first, and that it required him to respond by 11th January 2025, a period which he characterised as no more than a day. He responded by a letter dated 10th January 2025 in which he stated that the overtime issue had been dealt with in August 2024 and had not recurred, and, as to the sums he had sent to one Bryton Oluoch, that they were for a sugar cane farming venture in which the two were jointly engaged. 9. He pleaded that the Respondent nonetheless proceeded with a second disciplinary hearing and terminated his employment by a letter dated 28th March 2025. He contended that the termination was unlawful and unfair, in that: the Respondent failed to prove the reason for termination as required by the Employment Act; he was not afforded adequate time to respond to the notice to show cause and, thus, was not accorded a fair hearing; he 6

page 6 of 70

ELRC Cause No. E097 of 2025 (Consolidated) was punished twice for the same matter, in breach of the rule against double jeopardy; and his terminal dues were withheld. 10. He sought: a declaration that the termination was unlawful and unfair; pay in lieu of notice, Kshs. 101,400/-; a refund of the money deducted from his salary, Kshs. 75,000/-; salary for March 2025, Kshs. 101,400/-; compensation for unfair termination equivalent to twelve months' salary, Kshs. 1,216,800/-; interest; and costs. 11. In Cause No. E112 of 2025, Mr. Wato Josi Kimambo pleaded that he was employed as a Technician on 4th August 2015, rose to the position of Senior Technician, and served until 31st March 2025, earning a terminal monthly salary of Kshs. 83,274.89, as communicated in a letter dated 17th February 2025. He received a notice to show cause dated 5th August 2024 on the same subject of excessive overtime compensation and was required to respond by 8th August 2024. In his response he stated that he had been on leave and had not seen his pay slip, that he was not in charge of the payment of overtime, and that he did not recall interfering with overtime payments. 7

page 7 of 70

ELRC Cause No. E097 of 2025 (Consolidated) He was taken through a hearing, issued with a first warning letter dated 14th August 2024, and, by a letter dated 4th September 2024, informed that the excess overtime compensation would be recovered. He complied. 12. Mr. Kimambo's second notice to show cause, dated 9th January 2025, faulted him for having sent Bryton Oluoch a total of Kshs. 14,500/- between January and July 2024. He pleaded that he was given less than a day to respond, that his plea for more time was not entertained, that the Directorate of Criminal Investigations report referred to in the notice was never supplied to him, and that the proceedings were a re-trial of issues determined in August 2024. He sought a declaration of unfair termination; pay in lieu of notice, Kshs. 83,274.89; a refund of Kshs. 14,500/-; salary for March 2025, Kshs. 83,274.89; and compensation equivalent to twelve months' salary, Kshs. 999,298.68, together with interest and costs. He added that his dismissal was part of an elaborate scheme to rid the Respondent of long-serving staff so as to avoid paying them their terminal dues. 8

page 8 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 13. In Cause No. E103 of 2025, Mr. Raphael Ogutu Otieno stated that he was employed by the Respondent on 7th February 2000 as a Mechanical Equipment Operator on permanent terms, and that he served it continuously for twenty-five years and one month, until his employment was terminated on 31st March 2025 by a letter dated 28th March 2025. At the time of the termination, he earned a gross monthly salary of Kshs. 107,502.42/-. On 7th August 2024, he was served with a notice to show cause dated 5th August 2024, alleging that he had benefited from exaggerated overtime compensation, and was required to respond by 8th August 2024, which, he stated, gave him less than twenty-four hours. In his response, he stated that the allocation and processing of overtime were not within his control and that all his working hours were logged on the biometric clock-in system. He stated that he was subjected to a disciplinary hearing on the same day, 8th August 2024, without any formal notice of it, and was thereafter issued with a warning letter dated 14th August 2024. By a letter dated 4th September 2024, the Respondent informed him that the excess overtime would 9

page 9 of 70

ELRC Cause No. E097 of 2025 (Consolidated) be recovered from his pay. The recovery was effected, and he complied, in the understanding that the disciplinary process had been concluded. 14. On 10th January 2025, Mr. Ogutu was served with a second notice to show cause, dated 9th January 2025, which, he contended, raised substantially the same allegation of fraudulent overtime payments. In his response dated 11th January 2025, he stated that he had not sent Kshs. 75,000/- to Bryton Oluoch, as alleged, but only Kshs. 11,646/-, as his M-Pesa statement shows; that the sum was a repayment of a personal loan which Mr. Oluoch had advanced to him when his mother passed away in 2023; and that the overtime issue had been determined in August 2024, when he was warned and the money was deducted from his salary. He stated that he was nonetheless subjected to a further disciplinary hearing on 14th March 2025, without formal notice and without adequate time to prepare, and that the investigation report referred to by the Respondent was never supplied to him. He contended that the termination was unlawful, unprocedural and unfair because he was 10

page 10 of 70

ELRC Cause No. E097 of 2025 (Consolidated) denied adequate time to respond to both notices to show cause; he was subjected to double jeopardy, being punished twice for the same allegations; the Respondent failed to prove a valid reason for the termination as required by section 43 of the Employment Act; and his legitimate expectation that the matter had been concluded with the August 2024 warning was disregarded. He added that the second process was merely cosmetic, the Respondent having already made up its mind to terminate his employment, and that he has suffered economic loss, psychological distress and social hardship. He sought: a declaration that the termination was unlawful and unfair; damages of Kshs. 1,580,033.88/-, as particularised in his Memorandum of Claim; interest thereon from 28th March 2025 until payment in full; and costs. 15. The Respondent's Response to the Memorandum of Claim and the witness statement of its Human Resource Manager, Ms. Lily Mwasho, in Cause No. E103 of 2025 are in substantially the same terms as those filed in the lead file, which I set out below. Specific to Mr. Ogutu, the 11

page 11 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Respondent pleaded that he was engaged under a contract of service dated 7th February 2000 as a mechanical equipment operator, at a starting consolidated monthly salary of Kshs. 11,000/-; that he acknowledged receipt of its Code of Conduct and Ethics by signing it on 31st May 2019; that he received the notice to show cause dated 9th January 2025 on 10th January 2025, and the invitation to the disciplinary hearing on 11th March 2025, and did not protest that the notice was inadequate; that he did not exercise his right of appeal; and that, his terminal dues having been applied to his outstanding Sacco loan obligations, he was issued with a certificate of service dated 1st April 2025 and a final discharge letter dated 14th April 2025. 16. The Claimants' witness statements, which they adopted as their evidence in chief, reiterate the averments in their respective Memoranda of Claim. Mr. Akelo produced, among other documents, his certificate of service, the salary adjustment letter, the two notices to show cause and his responses to them, the first warning letter, the evidence of his remittance of Kshs. 70,000/- to the 12

page 12 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Respondent on 23rd August 2024, and the letter of summary dismissal. Mr. Kimambo produced his certificate of service, the commendation and salary adjustment letter dated 17th February 2025, the notice to show cause dated 5th August 2024 and his response to it, the first warning letter, the letter dated 4th September 2024, the notice to show cause dated 9th January 2025, the dismissal letter and his advocates' demand letter dated 29th September 2025. C. THE RESPONDENT'S CASE 17. The Respondent filed a Response to the Memorandum of Claim in each cause, together with the witness statement of its Human Resource and Administration Manager, Ms. Lily Mwasho, and a list and bundle of documents. It admitted the employment relationship with each Claimant. It averred that the standard working hours at all material times were 200 hours per month, rostered according to operational requirements, and that each Claimant was issued with, and acknowledged receipt of by signing, the Respondent's Corporate Code of Conduct and Ethics. It singled out three clauses of that Code: clause 3.1.2 13

page 13 of 70

ELRC Cause No. E097 of 2025 (Consolidated) (Accountability), which requires employees to act at all times in a responsible manner and in compliance with the Respondent's regulations and policies; clause 3.1.8 (Bribery and Corruption), which prohibits the offering or acceptance of unofficial or unorthodox payments or benefits in return for favourable treatment and requires employees to report any person suspected of soliciting or offering personal payments or favours; and clause 3.1.9, which requires employees to be fair and honest in their dealings with the Respondent and with one another, and not to attempt to derive a secret benefit not authorised by management. 18. The Respondent averred that in or about 2024 it came to its knowledge that the employee in charge of overtime allocation, a technical clerk, Mr. Bryton Oluoch, was working in cahoots with other employees, including the Claimants, to falsify and exaggerate the overtime hours worked; and that the beneficiaries of the exaggerated overtime would remit part of the excess pay to him. Initially, when the Claimants and others were found to have received exaggerated overtime pay, management 14

page 14 of 70

ELRC Cause No. E097 of 2025 (Consolidated) sanctioned them, by way of warning, for failing to report the overpayments. At that time, management deemed the matter an isolated event and believed that the overpayments were the result of an inadvertent error. 19. Later, it came to the Respondent's knowledge that, contrary to its earlier belief, the Claimants were party to an elaborate, dishonest and corrupt scheme to defraud it. The Respondent engaged the Directorate of Criminal Investigations (the DCI) to establish whether the employees had colluded to obtain pay for overtime not worked, to confirm whether they had indeed been paid more than their due pay, and to identify the perpetrators. By a report dated 16th December 2024, the DCI confirmed the scheme and recommended that all the suspects, the Claimants included, be prosecuted for the offences of stealing by servant, contrary to section 281 as read with section 268 of the Penal Code, and conspiracy to defraud, contrary to section 317 of the Penal Code. The Respondent elected, as it put it, out of magnanimity, not to pursue criminal charges, and instead subjected the Claimants to its internal disciplinary process under its 15

page 15 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Human Resource and Procedure Manual and Code of Conduct and Ethics. 20. It set out the chronology of the process: each Claimant was served with a notice to show cause dated 9th January 2025 which stated the offence complained of and required a response by close of business on 11th January 2025; dissatisfied with the responses, the Respondent, by letters dated 10th March 2025 and received on 11th March 2025, invited each Claimant to a disciplinary hearing on 14th March 2025 and informed him of his right to be accompanied by a representative of his choice; the Claimants did not protest that the notice was inadequate; the hearings proceeded as scheduled; and the disciplinary committee unanimously resolved to summarily dismiss each of them, which decision was communicated by letters dated 28th March 2025. 21. The reasons for the dismissal, the Respondent averred, were well spelt out in the dismissal letters: breach of clauses 3.1.2, 3.1.8 and 3.1.9 of the Code of Conduct and Ethics, conduct which manifested a fundamental breach of the Claimants' obligations under their contracts of service 16

page 16 of 70

ELRC Cause No. E097 of 2025 (Consolidated) within the meaning of clause 11.4.2 of the Human Resource and Procedure Manual, and which entitled the Respondent to summarily dismiss them under section 44(4)(g) of the Employment Act. Each Claimant was informed of his right of appeal under clause 11.3.1 of the Manual but did not exercise it. The Claimants' terminal dues were computed, applied to their outstanding Sacco loan obligations upon clearance, and each was issued with a certificate of service and executed a discharge letter dated 14th April 2025. 22. The Respondent's bundle of documents included, among others, the contracts of employment, the signed Code of Conduct and Ethics, the letters dated 4th September 2024 on the recovery of excess overtime compensation, the DCI report dated 16th December 2024, the notices to show cause dated 9th January 2025 and the Claimants' responses, the invitations to the disciplinary hearing, the minutes of the disciplinary hearings held on 14th March 2025, the letters of summary dismissal, the March 2025 pay slips, the computations 17 of terminal dues, the

page 17 of 70

ELRC Cause No. E097 of 2025 (Consolidated) clearance forms, the certificates of service, the cheques for the terminal dues and the discharge letters. D. THE CLAIMANTS' SUBMISSIONS 23. The Claimants' written submissions are dated 13th March 2026. Counsel opened with the proposition that one cannot be punished twice for the same wrongdoing, and that the doctrine of double jeopardy, though at home in criminal proceedings, disciplinary applies processes in with equal employment. force That, to counsel submitted, is the gravamen of the Claimants' case. 24. On procedural fairness, counsel submitted that section 41 of the Employment Act was not complied with, for three reasons. First, the notices to show cause were vague: they did not disclose the number of excess overtime hours, the dates on which or the months in which the excess overtime was paid, or the amount of excess compensation received. Further, the notice to show cause dated 9th January 2025 served upon Mr. Akelo stated the sum sent to Bryton Oluoch as Kshs. 30,500/-, while the copy produced by the Respondent bears a handwritten amendment to "75K", which was never communicated to 18

page 18 of 70

ELRC Cause No. E097 of 2025 (Consolidated) him. Second, the Claimants were not given adequate time to prepare their defence. The notice to show cause was served on Thursday, 9th January 2025, with a response due by close of business on Saturday, 11th January 2025, leaving only one clear day; and the invitation to the hearing was received on Tuesday, 11th March 2025, for a hearing on Friday, 14th March 2025, leaving two clear days. Reliance was placed on Nyambu v Consolbase Limited [2025] KEELRC 260 (KLR), for the proposition that an employee must be given not less than three clear days to respond to a notice to show cause, and on Bakery Confectionery Manufacturing & Allied Workers Union v Kenafric Industries Limited [2025] KEELRC 3681 (KLR), for the proposition that a termination following inadequate notice is unfair even where the employee responded. Third, the DCI report was never supplied to the Claimants. Counsel argued that the copy of the report produced by the Respondent bears a receiving stamp of 15th February 2025, more than a month after the notices to show cause, which, it was argued, demonstrates that the report referred to in the notices did not then exist. 19

page 19 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 25. On substantive fairness, counsel submitted that section 43 of the Act places the burden of proving the reasons for termination upon the employer, and that the Respondent had not discharged it. The Respondent's workplace is biometrically controlled, and clause 3.1.24 of its Code of Conduct requires monthly attendance returns to be forwarded to Human Resources. The Respondent therefore had, but did not produce, records that would have established the hours actually worked, the overtime claimed and the pay received. Under section 10(6) and (7) of the Employment Act, the burden of producing such records rests on the employer. In their absence, it was argued, there was no proof of excess overtime. As for the DCI report, it did not disclose the hours or dates of the alleged excess overtime, took no statement from Bryton Oluoch or from management, did not consider time sheets or clock records, and did not achieve its own stated objectives. It was, in counsel's words, merely cosmetic. Further, it was submitted, the disciplinary committee wrongly placed the burden on the Claimants to dispel the Respondent's suspicion; Mr. Akelo had explained that the 20

page 20 of 70

ELRC Cause No. E097 of 2025 (Consolidated) money he sent to Bryton Oluoch was for a sugar cane farming venture in Migori, and no evidence was adduced to contradict that explanation. 26. On double jeopardy, counsel relied on Co-operative Bank of Kenya Limited v Yator [2021] KECA 95 (KLR), where the Court of Appeal held that a complaint which had been resolved "was as good as buried forever" and could not be revived as the basis of a summary dismissal; Brinks Security Services Limited v Mudaki & another [2025] KEELRC 3562 (KLR); and Mbugua v Powermax General Electrical Merchants [2024] KEELRC 620 (KLR). It was submitted that the Respondent took the Claimants through two disciplinary hearings over the same series of events, warned and surcharged them in the first and dismissed them in the second; that the Respondent had, in the meantime, commended Mr. Akelo and increased his salary by 4% with effect from 1st January 2025, signalling that the matter had been closed; and that the second process was an afterthought and a sham. 27. On reliefs, counsel urged the Court to take into account the Claimants' long service and the manner of their 21

page 21 of 70

ELRC Cause No. E097 of 2025 (Consolidated) dismissal and to award the reliefs sought, which, for Mr. Akelo, counsel tabulated at Kshs. 1,490,100/-, comprising notice pay, a refund of Kshs. 70,500/-, salary for March 2025 and twelve months' compensation, together with costs. E. THE RESPONDENT'S SUBMISSIONS 28. The Respondent's written submissions were expressed to apply to the lead file and the other three consolidated claims. Counsel identified four issues: whether the termination was fair and justified; whether the rule against double jeopardy applied; whether there was procedural fairness; and whether the Claimants were entitled to the reliefs sought. 29. Counsel submitted that an employer may justifiably terminate the services of an employee on account of dishonesty. Reliance was placed on Bamburi Cement Limited v William Kilonzi [2016] eKLR, in which the Court of Appeal adopted, through its earlier decision in Judicial Service Commission v Gladys Boss Shollei (Civil Appeal No. 50 of 2014), the test articulated by the Supreme Court of Canada in McKinley v BC Tel [2001] 2 SCR 161, namely, 22

page 22 of 70

ELRC Cause No. E097 of 2025 (Consolidated) whether the employee's dishonesty gave rise to a breakdown in the employment relationship. It was argued that the Claimants, with full knowledge and dishonestly, conspired to receive overtime pay to which they were not entitled, in breach of clauses 3.1.2, 3.1.8 and 3.1.9 of the Code of Conduct and Ethics, thereby violating an essential condition of their contracts and occasioning an irretrievable breakdown in the relationship. 30. On double jeopardy, counsel submitted that the first process was undertaken to recover the funds wrongly and dishonestly procured through overtime pay for hours not worked, while the second was a disciplinary process undertaken upon new evidence coming into the Respondent's possession showing that the Claimants were involved in a larger scheme to defraud the company. Reliance was placed on Kalasinga & 3 others v Moi University [2023] KEELRC 1454 (KLR), where the Court held, at paragraph 55, that an employer is within its right to punish an employee for obtaining money irregularly and at the same time to recover the money, and that this does not constitute double punishment, since the recovery is 23

page 23 of 70

ELRC Cause No. E097 of 2025 (Consolidated) for money wrongfully received while the disciplinary action is for the offence of wrongfully obtaining it. 31. On procedure, counsel recounted the chronology already set out and submitted that the process was within the confines of the law. On reliefs, counsel submitted that since the dismissal was justified, the Claimants were not entitled to notice pay or compensation; that, in any event, the Claimants' conduct precluded an award of maximum compensation, on the authority of Kenya Airways Limited v Alex Wainaina Mbugua [2019] eKLR; that the deductions were a lawful surcharge of money the Claimants received for hours they did not work and were therefore not refundable; and that the Claimants had not demonstrated an entitlement to salary for March 2025. F. ISSUES FOR DETERMINATION 32. I have carefully considered the pleadings, the witness statements, the documents filed and the written submissions in the consolidated causes. In my view, two issues emerge for determination: 24

page 24 of 70

ELRC Cause No. E097 of 2025 (Consolidated) (i) Whether the termination of the Claimants' respective contracts of employment was fair; and (ii) Whether the Claimants are entitled to the reliefs sought. 33. The Claimants' plea of double jeopardy, which their counsel elevated to a separate issue, is, properly understood, an attack on the validity of the reason for which they were dismissed. I will consider it under the first issue, as part of the inquiry into substantive fairness. G. ANALYSIS AND DETERMINATION (a) Preliminary: the consolidation of the suits and the mode of hearing 34. Before I turn to the issues, it is necessary to say a word on the consolidation. Consolidation is a procedural device by which two or more suits that share common questions of law or fact, that arise out of the same transaction or series of transactions, and that involve the same or substantially the same parties, are heard and determined together. Its value lies in the economy of judicial time and of the parties' resources, in the avoidance of a multiplicity of 25

page 25 of 70

ELRC Cause No. E097 of 2025 (Consolidated) proceedings, and, perhaps most importantly, in the avoidance of the embarrassment of conflicting decisions on the same questions by courts of coordinate jurisdiction. It is an instrument of the principle, in Article 159(2)(b) of the Constitution, that justice shall not be delayed, and of the principal objective of this Court, under section 3 of the Employment and Labour Relations Court Act, to facilitate the just, expeditious and proportionate resolution of disputes. 35. The Supreme Court, in Law Society of Kenya v Centre for Human Rights & Democracy & 12 others [2014] eKLR (Petition No. 14 of 2013), described the essence of consolidation thus: "The essence of consolidation is to facilitate the efficient and expeditious disposal of disputes, and to provide a framework for a fair and impartial dispensation of justice to the parties. Consolidation was never meant to confer any undue advantage upon the party that seeks it, nor was it intended to occasion any disadvantage towards the party that opposes it." 26

page 26 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 36. The four causes now before me arise from the same factual matrix. The Claimants were employed in the same department of the same employer. They were caught up in the same investigation into the same overtime scheme, allegedly orchestrated by the same individual. They were subjected to the same disciplinary process in August 2024, the same DCI investigation in December 2024, and the same second disciplinary process in January to March 2025, before the same disciplinary committee, and were dismissed by letters of the same date, on the same grounds and in substantially identical terms. They are represented by the same advocates and make the same complaints. To have heard the four causes separately would have been to invite four separate determinations of the same questions, with the attendant risk of inconsistent outcomes. In the circumstances, the parties' decision to consolidate the suits was, in my view, a proper and prudent one, and I commend it. 37. Similarly, the parties consented to the disposal of the consolidated causes under Rule 59, on the strength of the documents filed and written submissions, without the oral 27

page 27 of 70

ELRC Cause No. E097 of 2025 (Consolidated) testimony of witnesses. That choice has consequences, to which I shall return. For now, it suffices to observe that a party who elects that mode of hearing elects to stand on its documentary record. It forgoes the opportunity to test the opposing party's documents by cross-examination, and it accepts that the Court will evaluate those documents as they stand. (b) Whether the termination of the Claimants' employment was fair The burden of proof under section 47(5) of the Employment Act 38. Section 47(5) of the Employment Act provides: "For any complaint of unfair termination of employment or wrongful dismissal the burden of proving that an unfair termination of employment or wrongful dismissal has occurred shall rest on the employee, while the burden of justifying the grounds for the termination of employment or wrongful dismissal shall rest on the employer." 39. The provision creates a sequential duty. The employee bears the initial burden of establishing that an unfair 28

page 28 of 70

ELRC Cause No. E097 of 2025 (Consolidated) termination or wrongful dismissal has occurred. It is only upon the discharge of that burden that the evidential burden shifts to the employer to justify the grounds of the termination. The employer is not called upon to justify a termination that the employee has not first shown, on a prima facie basis, to have occurred unfairly. This is the reading that the Court of Appeal gave to the provision in Muthaiga Country Club v Kudheiha Workers [2017] KECA 282 (KLR) (Civil Appeal No. 184 of 2015). There, the Court found that the grievants, by denying, through their testimony, the reasons the employer had given for their termination, had discharged their obligation under section 47(5); that this brought into play sections 43(1) and 47(5), placing the burden on the employer to prove the reasons for termination and to justify them; and that, the employer having failed to do so, the termination was unfair for want of a valid reason. 40. In the present causes, the Claimants have each pleaded and placed before the Court the letters by which they were summarily dismissed, the notices to show cause that preceded them, and their responses. They have each 29

page 29 of 70

ELRC Cause No. E097 of 2025 (Consolidated) asserted, with particulars, that the termination was unfair: that the process was hurried, that the evidence was withheld from them, that the reasons were not proved, and that they were punished twice for the same matter. In my view, in the circumstances of these matters, the Claimants discharged their initial burden under section 47(5). The burden therefore shifted to the Respondent to justify the grounds of the terminations. 41. The fairness of a termination of employment has two aspects: procedural fairness and substantive justification. An employer must establish both. A termination that is substantively justified but procedurally unfair is unfair, and so is a termination that is procedurally impeccable but without a valid reason. I turn to each aspect. (i) Procedural fairness 42. Section 41 procedure of the Employment Act that an employer must prescribes follow the before terminating an employee's employment, or summarily dismissing him, on the grounds of misconduct, poor performance or physical incapacity. It provides: 30

page 30 of 70

ELRC Cause No. E097 of 2025 (Consolidated) "(1) Subject to section 42(1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation. (2) Notwithstanding any other provision of this Part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under section 44(3) or (4) hear and consider any representations which the employee misconduct or may on the grounds poor performance, and of the person, if any, chosen by the employee within subsection (1), make." 43. The provision distils the essential elements of a fair hearing in the employment context: the employee must be informed of the charge he is to meet; he must be afforded an opportunity to make representations in answer to it; he is entitled to be accompanied by a colleague or union representative of his choice; and the 31

page 31 of 70

ELRC Cause No. E097 of 2025 (Consolidated) employer must hear and consider his representations, and those of his chosen companion, before it decides. 44. These requirements are not a matter of mere statutory form. Procedural fairness in a disciplinary process is a constitutional imperative, rooted in the right to fair administrative action under Article 47, the right to a fair hearing under Article 50(1) and the right to fair labour practices under Article 41 of the Constitution. The Supreme Court, in Judiciary & 2 others v LMN (Petition E040 of 2024) [2025] KESC 53 (KLR), began its judgment with this declaration: "We begin this judgment by declaring that the fairness of any disciplinary process is today a constitutional imperative, irrespective of the status of the officer involved. The process must uphold all the tenets of fair administrative action under Article 47 and the right to a fair hearing under Article 50 of the Constitution." 45. The Supreme Court went on, in that case, to restate the principles of a fair disciplinary process, which include that the employee be given reasonable time to prepare and present his defence; that the basis of the complaint be 32

page 32 of 70

ELRC Cause No. E097 of 2025 (Consolidated) clearly communicated to him; that he be given access to the documents relied upon; that he be entitled to appear in person, accompanied by a representative of his choice; and that the decision be a reasoned one. The question in these causes is whether the process to which the Claimants were subjected measured up to that standard. I have considered the process as a whole, from the notices to show cause to the hearings and the decisions, and I am persuaded that it did. 46. The process bore the hallmarks of a fair hearing. Each Claimant was served with a written notice to show cause dated 9th January 2025. Each notice set out the background to the charge, namely the Claimant's meeting with the DCI in December 2024 regarding fraudulent overtime allocation resulting in excess payment to his salary between January and July 2024; it stated the specific act alleged against the Claimant, namely that he had sent a stated sum of money to Bryton Oluoch during that period; and it identified the specific provisions of the Code of Conduct and Ethics, clauses 3.1.2, 3.1.8 and 3.1.9, which the conduct was alleged to have breached. Each 33

page 33 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Claimant was required to submit a written defence, and each did so. Each was then invited, in writing, to a disciplinary hearing on a specified date, at a specified time and venue. The invitation identified the misconduct as the breaches set out in the notice to show cause, named the members of the disciplinary committee, told the Claimant that he was entitled to be accompanied by a representative of his choice, informed him that all documentation relating to the matter was available for his review at the Human Resource office before the hearing, and assured him that he and his representative had full rights to be heard and to have their submissions objectively deliberated upon. 47. The minutes of the hearing in respect of Mr. Kimambo are illustrative. The Chairman invited him to choose the language of the proceedings, and he chose Kiswahili. He was accompanied by a colleague, Mr. Elias Nyae, as his representative, whose role was explained to him. He was asked whether he had any objection to any member of the panel, and he had none. He was told the purpose of the meeting, which was to review the notice to show cause 34

page 34 of 70

ELRC Cause No. E097 of 2025 (Consolidated) and to understand the reasons behind his M-Pesa transactions to Bryton Oluoch. He was questioned by several members of the committee, and he answered. He was then given the opportunity to make a plea, and so was his representative, who stated, for the record, that the meeting had been fairly conducted. Each dismissal letter, in turn, recounted the charge, the Claimant's written and oral representations and those of his representative, the findings of the committee and the reasons for them, the provisions of the Code, the Manual and the Act relied upon, and the decision; and it informed the Claimant of his right of appeal under clause 11.3.1 of the Manual. None of the Claimants exercised that right. 48. The Claimants' complaint that the notices were vague does not, with respect, withstand scrutiny. The notices were explicit on the accusations. The charge against each Claimant was not that he had worked fewer hours than he was paid for; that matter had been dealt with in August 2024. It was that he had remitted money to the very clerk who allocated overtime, during the very period in which the overtime was fraudulently allocated, and that the 35

page 35 of 70

ELRC Cause No. E097 of 2025 (Consolidated) remittances implicated him in the scheme. The number of hours, and the dates on which the excess overtime was paid, were not the gravamen of the second charge. The accusations were, in my view, not complex. They concerned facts that were peculiarly within the Claimants' own knowledge: whether each of them had sent money to Bryton Oluoch, and, if so, why. In the circumstances, the notices were not unreasonable, and they told each Claimant, with sufficient precision, the case he had to meet. 49. I am fortified in that view by a fact which, in my assessment, speaks louder than any submission on the alleged vagueness of the notices. Following the August 2024 process, each of the Claimants undertook to refund, and refunded, the overtime pay he had received for hours not worked, and each executed a document by which the refund was effected or acknowledged. The letters dated 4th September compensation 2024, for reiterating overtime not that worked the excess would be recovered from payroll, were signed by the Claimants in acknowledgment of receipt and understanding. Mr. Akelo, 36

page 36 of 70

ELRC Cause No. E097 of 2025 (Consolidated) by his own pleading and submissions, remitted Kshs. 70,000/- to the Respondent's account on 23rd August 2024, and the balance was recovered from his salary. According to the statement he gave to the DCI, which stands uncontroverted, he was asked to pay for the extra hours amounting to Kshs. 89,000/-, and he took a loan from the Sacco to pay Kshs. 70,000/- of it, the remaining sum of about Kshs. 19,000/- being deducted from his salary in September 2024. Mr. Kimambo, by the same token, told the DCI that he deposited Kshs. 40,500/- at the bank and that a further Kshs. 20,931/- was deducted from his salary. Mr. Raphael Ogutu (referred to in the DCI report as Raphael Otieno Ogutu) told the DCI that he was informed he had been paid for 52 hours that he had not worked, amounting to Kshs. 31,850/-, and that he signed a consent for the money to be deducted from his pay slip. Mr. Rambo Mwema (referred to in the DCI report as Mwema Rambo Mulwa) likewise told the DCI that he was advised to pay or to sign a consent for deduction of the money paid to him for extra hours he had not worked, and that he agreed to those terms. 37

page 37 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 50. These undertakings and acts of refund speak to one thing: the Claimants understood how much overtime had been wrongfully paid to them, and for how many hours. A man does not borrow money from his Sacco to refund an employer a sum of Kshs. 70,000/- unless he accepts that the sum is owed. An employee does not sign a consent for the deduction of a computed sum from his salary, for a stated number of hours, unless he accepts that he was paid for those hours and did not work them. If any of the Claimants believed that he had in fact worked the hours for which he was paid, or that the figures presented to him were wrong, the time to say so was then, and the means were at hand: the biometric records and the attendance returns to which their counsel now refers. None of them did. None of them protested the computation, demanded the records, or refunded under protest. Not one of them has pleaded that his consent or his refund was procured by coercion, fraud or mistake. The submission that the Claimants paid "in order to retain their jobs" is made from the bar; it finds no support in any contemporaneous document. 38

page 38 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 51. The legal consequence is significant. An admission, within the meaning of section 17 of the Evidence Act, is a statement, oral or documentary, which suggests an inference as to a fact in issue or a relevant fact, and it may be proved against the person who makes it. By their conduct, by the documents they signed and, indeed, by their own pleadings, which acknowledge that the excess overtime was recovered from them and that they remitted it as instructed, the Claimants admitted that they had been paid overtime for hours they did not work, and they admitted the quantum. It does not lie in their mouths to turn around, in these proceedings, and contend that the Respondent was obliged to prove, through time sheets and clock records, the very overpayment they had acknowledged and refunded. Nor can they be heard to say that they did not know the particulars of the overtime which lay behind the charge. They knew those particulars better than anyone. The complaint about the absence of particulars of hours and dates in the notices to show cause, and the related argument under section 10(6) and (7) of the Employment Act, therefore fail. I would add that 39

page 39 of 70

ELRC Cause No. E097 of 2025 (Consolidated) the Claimants cannot, in one breath, rely on the refund as the completed punishment for the overtime and, in the next, seek its return as money unlawfully deducted. They cannot approbate and reprobate. 52. I turn to the complaint about the time afforded to the Claimants. The notices to show cause were served on 9th January 2025 and required a response by close of business on 11th January 2025. The invitations to the hearing were received on 11th March 2025, for a hearing on 14th March 2025, a period of three days. The Claimants contend that these periods were too short. With respect, I do not agree. In my view, a period of three days to prepare for the hearing was, in the circumstances of these matters, not unreasonable. 53. Section 41 of the Employment Act does not prescribe a minimum period of notice either for a response to a notice to show cause or for a disciplinary hearing. What the law requires is that the employee be given a reasonable opportunity to prepare and present his defence. What is reasonable is not a matter of arithmetic but of context. It depends on the nature and complexity of the charge, on 40

page 40 of 70

ELRC Cause No. E097 of 2025 (Consolidated) the volume and character of the material the employee must assimilate, on the extent to which the facts are within his own knowledge, on how long he has known of the matters in issue, and on whether he sought more time and was refused. A period that would be manifestly inadequate for an employee facing a complex charge founded on voluminous financial records may be perfectly adequate for one asked to explain a handful of transactions that he himself made. 54. Against that yardstick, the following considerations persuade me that the Claimants were not prejudiced. First, as I have found, the accusation was a simple one, and the facts were within the Claimants' personal knowledge. Second, the matter was not sprung on them. Each of the Claimants had been interviewed by, and had recorded a statement with, the DCI in December 2024, on the very subject of the overtime and the money sent to Bryton Oluoch. The notices to show cause expressly referred to that meeting. Third, the Claimants were able to, and did, respond to the notices within the time allowed. Mr. Kimambo's handwritten response was received by the 41

page 41 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Respondent on 10th January 2025, a day before the deadline, and Mr. Akelo's response, by his own pleading, is dated 10th January 2025. Fourth, and importantly, the hearing was not held within three days of the charge. It was held on 14th March 2025, more than two months after the Claimants received the notices to show cause and responded to them. The three days' notice of the date of the hearing was, therefore, not the totality of the time available to the Claimants to prepare their defence; it was merely notice of a date for a hearing of a charge with which they had been familiar for over two months. Fifth, none of the Claimants objected, upon receipt of the invitation or at the commencement of the hearing, that the notice was inadequate, or asked for an adjournment. Each attended with a representative of his choice, and, as the minutes in respect of Mr. Kimambo show, the representative affirmed that the hearing was fairly conducted. Mr. Kimambo's assertion that he sought, and was denied, more time to respond is a bare one. It is not supported by any written request or other document, and 42

page 42 of 70

ELRC Cause No. E097 of 2025 (Consolidated) it sits uneasily with the fact that he responded before the deadline. 55. It is also of significance that the Claimants do not assert that the time given to them breached any provision of the Respondent's Human Resource and Procedure Manual, any term of their contracts of service, any collective agreement, or any established practice at the workplace. There is, in this regard, a material distinction between these causes and the circumstances in Judiciary & 2 others v LMN (supra). There, the officer was given one day's telephone notice of a disciplinary hearing in the face of a regulation, couched in mandatory terms, that required written notice of not less than fourteen days. It was the breach of that mandatory timeline that rendered the proceedings unfair. Here, there was no prescribed timeline to breach, and the Claimants point to none. The question is therefore one of reasonableness in all the circumstances, and, for the reasons I have given, the periods afforded were not unreasonable. 56. I have considered the decisions in Nyambu v Consolbase Limited (supra) and Bakery Confectionery Manufacturing & 43

page 43 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Allied Workers Union v Kenafric Industries Limited (supra). With the greatest respect, I do not read them as laying down an inflexible rule that a period of less than three clear days is, of itself and irrespective of the circumstances, fatal to a disciplinary process. Section 41 does not say so, and a rule of that rigidity would substitute a formula for the contextual inquiry into fairness that the section and the Constitution demand. Each case must turn on its own facts. In Nyambu, the show cause letter and the dismissal letter were, on the claimant's case, served together and the employee was dismissed within two days of the alleged incident. The facts of these causes are far removed from that. 57. Further relevant points emerge from the documents. On the complaint that the DCI report was not supplied, it is to be observed that the invitations to the disciplinary hearing stated, in terms, that all documentation relating to the matter was available for the Claimant's review at the Human Resource office before the hearing. There is no evidence that any of the Claimants took up that invitation, or that any request to see the report was made and 44

page 44 of 70

ELRC Cause No. E097 of 2025 (Consolidated) refused. In any event, the substance of the report, as it related to each Claimant, had been disclosed to him: the notice to show cause told him what the report said about him, namely that he had sent a stated sum to Bryton Oluoch between January and July 2024. Procedural fairness requires that an employee be told the case he has to meet with sufficient particularity to enable him to answer it. The Claimants were told, and they answered. 58. On the argument that the report did not exist when the notices to show cause were issued, because the copy produced bears a receiving stamp of 15th February 2025, I am not persuaded. The report is dated 16th December 2024, before the notices to show cause were issued. The notices themselves refer to the Claimants' meeting with the DCI in December 2024. The amount stated in Mr. Kimambo's notice, for instance, corresponds to the analysis of his M-Pesa transactions contained in the report. A receiving stamp on a particular copy of a document records when that copy was received in a particular office; it does not prove that the document, or its findings, were not in existence, or not known to the Respondent, at an 45

page 45 of 70

ELRC Cause No. E097 of 2025 (Consolidated) earlier date. In any event, it is not disputed that the report was in the Respondent's possession and available for review well before the hearing of 14th March 2025. 59. As for the variance, in Mr. Akelo's case, between the sum of Kshs. 30,500/- stated in the notice served upon him and the handwritten "75K" on the Respondent's office copy, I find it to be immaterial. The gravamen of the charge was not the precise quantum of the remittances but the fact of the remittances to Bryton Oluoch during the period of the fraudulent allocation, and the reason for them. Mr. Akelo admitted, in his response to the notice to show cause and at the hearing, that he had sent money to Bryton Oluoch, and he offered his explanation for it. He was neither misled nor prejudiced by the variance. 60. Finally on procedure, much of the Claimants' criticism is directed at the process of August 2024: the brevity of the notice to show cause served then, the absence of a formal invitation to the hearing of 8th August 2024, and the want of particulars. That process, however, did not result in the termination of anyone's employment. It resulted in warnings and in refunds which, as I have found, the 46

page 46 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Claimants accepted without demur. The process whose fairness this Court is called upon to assess under section 41 is the one that culminated in the dismissals, and it is that process that I have examined. 61. In the upshot, I find that the Respondent complied with the requirements of section 41 of the Employment Act and the constitutional standards of a fair hearing. The termination employment was of the Claimants' procedurally fair. (ii) Substantive justification 62. Procedural fairness, though necessary, is not sufficient. The employer must also prove that it had a valid and fair reason to terminate the employment. Section 43 of the Employment Act provides: "(1) In any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45. (2) The reason or reasons for termination of a contract are the matters that the employer at 47

page 47 of 70

ELRC Cause No. E097 of 2025 (Consolidated) the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee." 63. Section 45(2) provides that a termination of employment is unfair if the employer fails to prove that the reason for the termination is valid, that the reason is a fair reason related to the employee's conduct, capacity or compatibility or based on the operational requirements of the employer, and that the employment was terminated in accordance with fair procedure. The Court of Appeal, in Pius Machafu Isindu v Lavington Security Guards Limited [2017] eKLR (Civil Appeal No. 301 of 2015), summarised the heavy obligations that the Act places on employers in these terms: "The employer must prove the reasons for termination/dismissal (section 43); prove the reasons are valid and fair (section 45); prove that the grounds are justified (section 47(5)) ... A mandatory and elaborate process is then set up under section 41 requiring notification and hearing before termination." 48

page 48 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 64. The Supreme Court, in Kenfreight (EA) Limited v Benson K. Nguti [2019] KESC 79 (KLR), affirmed that, whatever the mode by which an employment is brought to an end, the termination remains subject to the statutory standards of fairness, and that where an employer fails to demonstrate a valid reason for the termination and to accord the employee a hearing, the termination is unfair and the remedies under section 49 of the Act are engaged. The two limbs of fairness, substantive and procedural, must both be satisfied. 65. Section 43(2) is the key to the standard of proof that the employer must meet. The reasons for termination are the matters which the employer, at the time of termination, genuinely believed to exist, and which caused it to terminate the employment. The test is partly subjective. The employer is not required to prove the employee's guilt beyond reasonable doubt, as the State must in a criminal trial, nor even to establish, as a matter of objective fact, that the employee committed the misconduct alleged. It is required to prove that it genuinely believed that the matters existed, and that its belief was founded on 49

page 49 of 70

ELRC Cause No. E097 of 2025 (Consolidated) reasonable grounds after such investigation as was reasonable in the circumstances. Section 44(4)(g) is of a piece with this. It permits summary dismissal where an employee commits, or on reasonable and sufficient grounds is suspected of having committed, a criminal offence against or to the substantial detriment of his employer or his employer's property. The law, in other words, does not require an employer to await a criminal conviction before it may act. It may act on reasonable suspicion. 66. The objective element of the test is supplied by the standard of the reasonable employer. The Court does not ask whether it would itself have dismissed the employee; it asks whether the employer's decision to dismiss fell within the range of responses that a reasonable employer, confronted with the same facts, might have adopted. Halsbury's Laws of England, 4th Edition, Volume 16(1B), paragraph 642, states the test in these terms: "The function of the tribunal is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which 50

page 50 of 70

ELRC Cause No. E097 of 2025 (Consolidated) a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair; if the dismissal falls outside the band it is unfair." 67. Lord Denning MR put it with characteristic clarity in British Leyland UK Ltd v Swift [1981] IRLR 91: "The correct test is: Was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view: another quite reasonably take a different view." 68. Our Court of Appeal has embraced this test. In Director General, National Intelligence Service & another v Chelimo [2024] KECA 606 (KLR) (Civil Appeal No. 645 of 2019), the Court held that the standard of proof in a dismissal case is on a balance of probabilities, that the employer need only prove the reasons that it genuinely believed to exist, which is a partly subjective test, and, drawing on the passage from Halsbury's Laws of England cited above, 51

page 51 of 70

ELRC Cause No. E097 of 2025 (Consolidated) that the court must determine whether the decision to dismiss fell within the band of reasonable responses that a reasonable employer might have adopted. And in Bamburi Cement Limited v William Kilonzi (supra), the Court of Appeal framed the inquiry under section 44(4)(g) as whether the employer's suspicion was based on reasonable and sufficient grounds. 69. It is against these principles that I now examine the reasons for which the Claimants were dismissed. 70. The contract of employment is not merely an exchange of labour for wages. Implied in every such contract is a duty of mutual trust and confidence, and, on the part of the employee, a duty of fidelity and good faith towards the employer. The Respondent's Code of Conduct and Ethics, which each Claimant signed, gives express content to that duty: the employee must act responsibly, must be fair and honest in his dealings with the employer and his colleagues, must not attempt to derive a secret benefit not authorised by management, must not accept unofficial or unorthodox payments or benefits, and must report any person soliciting or offering personal payments or favours. 52

page 52 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Honesty in matters of money is at the very core of that duty. 71. An employee who notices that his pay slip reflects sums to which he is not entitled is, by that duty, obliged to bring the anomaly to his employer's attention. One who instead keeps silent and consumes the money, not once or twice but month after month, breaches the trust reposed in him. His silence is not neutral; it is a choice to retain and enjoy the employer's money at the employer's expense. In the present causes, the uncontroverted material is that the inflated overtime ran from about January to July 2024, a period of some six months. The sums involved were not trifling. Mr. Akelo was asked to refund Kshs. 89,000/-; Mr. Kimambo refunded over Kshs. 60,000/-; Mr. Ogutu's excess was computed at 52 hours. Whatever might be said of a single unexplained credit on a single pay slip, an employee receiving such sums, consistently and over such a period, cannot plausibly claim not to have noticed. Mr. Akelo's explanation in August 2024, that he did not report the excess because the Respondent did not post it on the notice board, and Mr. Kimambo's, that he was on leave 53

page 53 of 70

ELRC Cause No. E097 of 2025 (Consolidated) and had not seen his pay slip, do not, with respect, rise to the level of a credible explanation for months of silence. 72. That breach, however, was the subject of the August 2024 warnings. What came to light later was graver. The DCI investigation revealed that the beneficiaries of the inflated overtime were sending money to Bryton Oluoch, the technical clerk who was said to be in charge of allocating overtime and who, the report found, did so fraudulently and was the mastermind of the scheme. The M-Pesa statements analysed in the report show remittances from each of the Claimants to Bryton Oluoch during the same January to July 2024 period in which the fraudulent overtime was being allocated, many of them falling at or about the end of the month, when salaries are paid. The DCI found that each of the employees involved confirmed having received the extra overtime that had been illegally allocated to him by Bryton Oluoch, and that the majority of them sent money to, or otherwise gave cash to, Bryton Oluoch each time they received their monthly salaries. 73. That fact cannot be wished away as a small matter. In the eyes of any reasonable employer, a pattern of payments 54

page 54 of 70

ELRC Cause No. E097 of 2025 (Consolidated) by the beneficiaries of fraudulently allocated overtime to the very person who allocated it, during the very period of the allocation, speaks to a conspiracy. It transforms what might, on the employer's initial understanding, have been an innocent if regrettable silence about a payroll error, into active participation in a scheme to defraud the employer: the clerk inflates the hours, the beneficiary receives the inflated pay, and the clerk's share is remitted to him. That is collusion. It is precisely the kind of unofficial payment in return for favourable treatment that clause 3.1.8 of the Code prohibits, and precisely the kind of secret benefit that clause 3.1.9 forbids. It is gross misconduct, of a kind that strikes at the root of the employment relationship and which, by its nature, attracts summary dismissal. It is also conduct that, on reasonable and sufficient grounds, may be suspected to constitute the offences of stealing by servant and conspiracy to defraud, as the DCI recommended, which brings it squarely within section 44(4)(g) of the Act. 74. In Mr. Kimambo's case, the Court need not even rely on inference. At the hearing on 14th March 2025, he 55

page 55 of 70

ELRC Cause No. E097 of 2025 (Consolidated) admitted that after he had repaid a loan from Bryton Oluoch, Bryton Oluoch informed him that he had assigned him extra hours which would reflect in his salary, and that the additional earnings should be given to Bryton; that this began around February 2024 and continued for a few months; that he would receive the additional earnings and give back part of them to Bryton by M-Pesa; that the money he sent was the money awarded to him by Bryton for hours not worked; that Bryton was asking him to send money partly in exchange for the addition of extra hours; and that he knew that receiving such compensation was an offence. He had told the DCI much the same. On his own admission, Mr. Kimambo was a party to the arrangement. His dismissal was amply justified. 75. Mr. Akelo offered a different explanation: that the money he sent to Bryton Oluoch was for a sugar cane farming venture at their rural home in Migori. The disciplinary committee did not accept that explanation, and, in my view, a reasonable employer was entitled to reject it. The remittances, as shown in the M-Pesa analysis, are numerous, many of them in small, repeated sums of Kshs. 56

page 56 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 1,000/- sent minutes apart, and they span the very period of the fraudulent overtime allocation. Mr. Akelo produced no document evidencing the venture, could not state, as the minutes record and his counsel acknowledges, the amount invested in it, and did not explain why its financing should coincide so neatly with the period during which Bryton Oluoch was allocating him overtime that he did not work, and which he was later asked to refund to the tune of Kshs. 89,000/-. The burden on the employer under section 43(2) is not to disprove every explanation the employee proffers; it is to show that it genuinely believed, on reasonable grounds, in the existence of the matters for which it dismissed him. When the employer has established a sound factual basis for its belief, an explanation that is uncorroborated and improbable does not, of itself, render that belief unreasonable. The committee's observation that the Claimant's representations had not dispelled its reasonable suspicion was not, therefore, a reversal of the burden of proof, as counsel contended. It was a statement that the employer had considered the employee's explanation and found that 57

page 57 of 70

ELRC Cause No. E097 of 2025 (Consolidated) it did not displace the reasonable grounds on which its suspicion rested, which is precisely the inquiry that sections 43(2) and 44(4)(g) contemplate. 76. The Claimants' criticisms of the DCI report, that it did not establish the hours and dates of the excess overtime, did not record a statement from Bryton Oluoch, and did not examine the clock records, do not advance their case. The fact and extent of the overpayments were, as I have found, admitted by the Claimants themselves through their undertakings and refunds. What the report added was the evidence of the remittances to Bryton Oluoch and the Claimants' own accounts of them, and that evidence is drawn from the M-Pesa statements and from statements recorded from the Claimants themselves. 77. It is also significant that the DCI report was not countered. The Claimants did not file further witness statements to rebut it, to deny the transactions attributed to them, to disown the statements the DCI recorded from them, or to explain why the report's findings were wrong. Nor, having consented to dispose of these causes under Rule 59, did they subject the report to cross-examination. That was 58

page 58 of 70

ELRC Cause No. E097 of 2025 (Consolidated) their choice, and it is a legitimate one; but it carries consequences. The report forms part of the record that the parties, by consent, placed before the Court for determination, and it stands undisplaced. A reasonable employer, armed with a report from the investigative arm of the National Police Service which detailed the scheme, analysed the remittances, recorded the employees' own accounts, and recommended their prosecution for stealing by servant and conspiracy to defraud, would, in my view, have summarily dismissed the employees concerned. The decision to dismiss the Claimants fell well within the band of reasonable responses. 78. I find it necessary to seek support, on this point, in the decision of the Supreme Court of Canada in McKinley v BC Tel [2001] 2 SCR 161, 2001 SCC 38, which our Court of Appeal adopted in Judicial Service Commission v Gladys Boss Shollei and in Bamburi Cement Limited v William Kilonzi (supra). The Supreme Court of Canada rejected the notion that every act of dishonesty, however trivial, automatically justifies summary dismissal, and equally rejected the notion that dishonesty must be of a particular 59

page 59 of 70

ELRC Cause No. E097 of 2025 (Consolidated) gravity in the abstract before it can do so. It adopted instead a contextual approach, under which the court considers the nature and degree of the dishonesty in the context of the employment relationship as a whole, and asks whether the sanction of dismissal is proportionate to the misconduct. Iacobucci J stated the test as follows: "Whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct. More specifically, the test is whether the employee's dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee's obligations to his or her employer." 79. I note, in passing, that the Respondent's counsel attributed this passage to the Court of Appeal's decision in Judicial Service Commission v Gladys Boss Shollei. It originates, in fact, in McKinley v BC Tel, which the Court of 60

page 60 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Appeal in that case cited with approval, as it did in Bamburi Cement Limited v William Kilonzi. 80. Applying the contextual approach, the dishonesty in these causes was neither trivial nor isolated. It concerned the employer's money. It was repeated over several months. It involved not a solitary lapse of judgment but an arrangement with another employee, the clerk entrusted with the allocation of overtime, to obtain pay for work that was not done and to share the proceeds. It was concealed, until an investigation by an outside agency exposed it. The Claimants were not junior or inexperienced employees; they were senior technical staff with between about ten and twenty-five years of service, whose seniority enhanced, rather than diminished, the trust reposed in them. Their long service is not a shield; if anything, it deepens the betrayal. Such conduct violates an essential condition of the contract of employment, breaches the faith inherent in the relationship and is fundamentally inconsistent with the employee's obligations to his employer. The relationship of trust and 61

page 61 of 70

ELRC Cause No. E097 of 2025 (Consolidated) confidence was irretrievably broken, and summary dismissal was a proportionate response. 81. I now turn to the doctrine of double jeopardy, on which the Claimants place so much weight. I accept the principle, as stated by the Court of Appeal in Co-operative Bank of Kenya Limited v Yator (supra), that an employer which has investigated a complaint, resolved it and imposed a sanction may not later revive the same complaint, on the same facts, as the basis for a more severe sanction. A complaint so resolved is, in the Court of Appeal's memorable phrase, as good as buried forever. But the principle does not aid the Claimants, in light of the timing of the investigation report. 82. The August 2024 process and the January to March 2025 process were not concerned with the same misconduct, nor were they founded on the same facts. The first warning letters, dated 14th August 2024, are explicit as to the misconduct for which the Claimants were then sanctioned: that they had been receiving excess compensation for overtime not worked and had failed to inform their supervisor of the anomaly. At that point, on 62

page 62 of 70

ELRC Cause No. E097 of 2025 (Consolidated) the Respondent's uncontroverted evidence, management regarded the matter as an isolated event and believed the overpayments to have been the result of an inadvertent error. It did not know, and had no means of knowing, that the overpayments were the product of a corrupt arrangement in which the Claimants were remitting money to the clerk who allocated the overtime. That information came to the Respondent only through the DCI investigation, which commenced after the August 2024 process and culminated in the report dated 16th December 2024. The DCI interviewed the Claimants in December 2024. The notices to show cause followed on 9th January 2025, within weeks of the report. 83. The second process was, therefore, not a revival of a buried complaint. It was founded on new evidence of a distinct and graver species of misconduct: not the passive receipt and retention of overpayments, but active collusion with another employee to procure them, and the payment of what were, in substance, kickbacks in return for the fraudulent allocation of overtime. The charge in the second process was framed accordingly, under clause 63

page 63 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 3.1.8 of the Code on bribery and corruption, among others, and the hearings focused, as the minutes show, not on the overtime as such but, in the Chairman's words, on "paying a colleague within the organization to receive favors". An employer that sanctions an employee for a lesser wrong, in ignorance of facts which, when later discovered through a proper investigation, disclose a graver wrong, is not thereby estopped from acting on those facts. To hold otherwise would be to reward concealment: the employee whose participation in a fraud is successfully hidden at the first inquiry would, by that very concealment, be immunised against the consequences of its later discovery. The law does not countenance such a result. 84. This is what distinguishes these causes from Yator. There, as the Court of Appeal found, the employer revived the very same complaint, on the same facts, without any new evidence or fresh misconduct, and used it as the basis for summary dismissal. Here, the second process rested on new facts uncovered by an independent investigation after the first process had been concluded. The decisions 64

page 64 of 70

ELRC Cause No. E097 of 2025 (Consolidated) in Brinks Security Services Limited v Mudaki & another and Mbugua v Powermax General Electrical Merchants, on which the Claimants also rely, are similarly distinguishable, being, on the Claimants' own account of them, cases in which the same allegations were used twice. 85. Further, the recovery of the overpayments was not a punishment at all. It was the restitution of money that did not belong to the Claimants. I agree with, and adopt, the reasoning in Kalasinga & 3 others v Moi University (supra), that an employer is within its rights to recover money irregularly obtained by an employee and, at the same time, to discipline the employee for the misconduct by which the money was obtained; the recovery is for the money wrongfully received, while the disciplinary action is for the offence of wrongfully obtaining it. Neither the recovery nor the warning of August 2024 barred the Respondent from acting on the fresh evidence of collusion. 86. Nor does the annual salary increment assist the Claimants. Mr. Kimambo's salary increment letter is dated 17th February 2025, more than a month after he had been 65

page 65 of 70

ELRC Cause No. E097 of 2025 (Consolidated) served with the second notice to show cause. It could not, therefore, have generated any expectation in him that the matter had been closed. The letters, which were evidently issued across the board in the ordinary annual cycle, cannot be read as a deliberate decision by the Respondent to condone misconduct that was, at that very time, the subject of a pending disciplinary process. 87. Lastly, Mr. Kimambo's assertion that his dismissal was part of an elaborate scheme to rid the Respondent of longserving staff so as to avoid paying their terminal dues is unsupported by any evidence, and it is contradicted by the record. The Respondent's documents show that his terminal dues were computed, paid by cheque dated 4th April 2025 and applied to his Sacco obligations, and that he executed a discharge letter acknowledging as much. 88. In the upshot, I find that the Respondent has proved the reasons for the termination of the Claimants' employment, as required by section 43 of the Employment Act; that those were matters which the Respondent genuinely believed, on reasonable and sufficient grounds, to exist at the time of termination; that they were valid and fair 66

page 66 of 70

ELRC Cause No. E097 of 2025 (Consolidated) reasons related to the Claimants' conduct, within the meaning of section 45; and that the decision to summarily dismiss the Claimants fell within the band of reasonable responses open to a reasonable termination of the Claimants' employer. The employment was substantively fair. (c) Whether the Claimants are entitled to the reliefs sought 89. Having found that the termination of the Claimants' employment was both procedurally and substantively fair, the declaration sought, that the termination was unlawful and unfair, cannot issue. It follows, too, that the claims for compensation under section 49(1)(c) of the Employment Act must fail, as must the claims for pay in lieu of notice. Summary dismissal is, by definition under section 44(1) of the Act, termination without notice, and an employee who is summarily dismissed for gross misconduct, justifiably and in accordance with fair procedure, has no claim to notice or to pay in lieu of it. 90. The claims for refunds of the sums deducted from the Claimants' salaries must 67 likewise fail. Those sums

page 67 of 70

ELRC Cause No. E097 of 2025 (Consolidated) represented pay for overtime that the Claimants did not work. As I have found, the Claimants accepted the overpayments, undertook to refund them, and refunded them, without protest. The deductions were the restitution of money that never belonged to the Claimants. To order their refund would be to reward the very misconduct for which the Claimants have been found to have been justifiably dismissed. 91. As for the claims for salary for March 2025, the Respondent's documents include the pay slips for March 2025 and the computations of terminal dues, which show that the March 2025 salary was processed and brought into account, together with the Claimants' leave entitlements, and that the net terminal dues were paid by cheque and applied, upon clearance, to the Claimants' Sacco obligations. Each of the Claimants on whose behalf those documents were produced executed a discharge letter acknowledging the computation and the payment. The Claimants have not controverted these documents. The claims for March 2025 salary have not been proved and are dismissed. 68

page 68 of 70

ELRC Cause No. E097 of 2025 (Consolidated) 92. On costs, these are at the discretion of the Court, to be exercised judiciously. While costs ordinarily follow the event, the Court is entitled to have regard to the nature of the dispute and the circumstances of the parties. The Claimants served the Respondent for many years, and the Respondent, for its part, elected not to pursue the criminal prosecution that the DCI recommended. In the circumstances, I consider it just that each party bears its own costs. H. DISPOSITION 93. In the upshot, I make the following orders in the consolidated causes: (a) The claims in ELRC Cause No. E097 of 2025, ELRC Cause No. E098 of 2025, ELRC Cause No. E103 of 2025 and ELRC Cause No. E112 of 2025 lack merit, and they are hereby dismissed in their entirety; and (b) Each party shall bear its own costs. 94. A copy of this judgment shall be placed in each of the consolidated files. 95. It is so ordered. 69

page 69 of 70

ELRC Cause No. E097 of 2025 (Consolidated) Dated, Signed and Delivered at Mombasa this 30th day of September 2026. OCHARO KEBIRA JUDGE 70

page 70 of 70