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
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Claimant is entitled to the reliefs pleaded in the Statement of Claim (refund of the overpaid sum of Kshs. 409,359.44)
- 2.Whether the 1st Respondent is entitled to the prayers in his counterclaim (compensation for unfair termination, one month's salary in lieu of notice and house allowance)
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
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- 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)
Relief refused
#Claim against the 2nd Respondent (bank) for the overpaid funds
By the time the 2nd Respondent was served with the court order of 7th December 2023, the 1st Respondent had already utilized the excess funds
1st Respondent's counterclaim for compensation for unfair termination, notice pay and house allowance
The employment ended by mutual separation agreement, so there was no unlawful or unfair termination
Claimant's costs of the suit
The court declined to award the Claimant costs despite success on the claim
Costs
The 1st Respondent shall pay the 2nd Respondent's costs; there shall be no order for costs for the Claimant.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In the end, I find that the 1st Respondent was overpaid a sum of Kshs. 409,359.44 by the Claimant and I enter judgment in favor of the Claimant against the 1st Respondent in the sum of Kshs. 409,359.44.
The case against the 2nd Respondent is dismissed. The 1st Respondent shall pay the 2nd Respondent's costs while there shall be no order for costs for the Claimant.
As such, his counterclaim is unmerited and is dismissed.
a contract can only be set aside if it is shown that it was procured through fraud, coercion or undue influence, and the party alleging any of these grounds in a bid to upset a contract must not only plead the ground but prove it
Issues in the judgment
#The judgment contains inconsistent figures for the amount paid to the 1st Respondent: the pleadings refer to Kshs. 962,924.33 while the counterclaim narrative and submissions refer to Kshs. 962,924.93
The judgment does not state the case number of the suit on its face
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.