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Case Brief · caselaw.co.ke
ELRCPartially AllowedNot stated in the judgment (a test suit related to ELRC Appeals No. E017, E018, E019, E020 of 2023)

Eldotec Consultancy Services Ltd v Otieno & another (Employment and Labour Relations Cause E019 of 2023) [2025] KEELRC 2078 (KLR)

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

The bottom line

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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

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Executive summary

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The Claimant employer sued to recover Kshs. 409,359.44 allegedly overpaid to the 1st Respondent, a former Manager-Compliance Support, upon mutual separation by agreement dated 17th May 2023. Under the agreement the employee was entitled to Kshs. 553,565.49 (salary to 2nd June 2023, 26 weeks' notice pay and 7.75 untaken leave days), but he was paid Kshs. 962,924.33 due to what the Claimant called a gross miscalculation. The Claimant also sued the 2nd Respondent bank, alleging it failed to freeze the account when notified of the error. The 1st Respondent defended the suit, contending that a subsequent oral agreement doubled the release package to 52 weeks, reflected in the May 2023 payslip and discharge voucher of 31st May 2023, and filed a counterclaim alleging unlawful and unfair termination, seeking compensation, one month's notice pay and house allowance. The suit was disposed of by written submissions. The court applied National Bank of Kenya v Pipeplastic Samkolit, holding that a party seeking to upset a contract must plead and prove fraud, coercion or undue influence, none of which was pleaded or proved, and that the alleged oral variation was unproved under sections 107, 108 and 109 of the Evidence Act. The written separation agreement was therefore binding; the excess payment was made in error and judgment was entered for the Claimant against the 1st Respondent for Kshs. 409,359.44. The counterclaim was dismissed as employment ended mutually. The claim against the bank failed because the funds had been disbursed before service of the freezing order of 7th December 2023. The 1st Respondent was ordered to pay the 2nd Respondent's costs, with no order for costs for the Claimant.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 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. 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

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01

Whether the mutual separation agreement dated 17th May 2023 was varied by a subsequent oral agreement to pay 52 weeks instead of 26 weeks

Holding

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

Reasoning

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.

p. 7
02

Whether the 1st Respondent's counterclaim for unfair termination was merited

Holding

The counterclaim was dismissed because the employment ended by mutual separation under a signed agreement, not by unfair termination

Reasoning

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.

p. 6
03

Whether the 2nd Respondent (bank) was liable to refund the overpaid funds

Holding

The claim against the 2nd Respondent was dismissed; it had already disbursed the funds before being served with the freezing order

Reasoning

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.

p. 7

Legal principles established

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  • 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

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  1. 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. 2.The 1st Respondent's counterclaim is dismissed
  3. 3.The case against the 2nd Respondent is dismissed
  4. 4.The 1st Respondent shall pay the 2nd Respondent's costs
  5. 5.No order for costs for the Claimant

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

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

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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

p. 7

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

p. 6

Claimant's costs of the suit

The court declined to award the Claimant costs despite success on the claim

p. 7

Costs

The 1st Respondent shall pay the 2nd Respondent's costs; there shall be no order for costs for the Claimant.

Quotable passages

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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.
p. 7Final orders - recovery of overpaid terminal dues
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.
p. 7Final orders - dismissal against bank and costs
As such, his counterclaim is unmerited and is dismissed.
p. 6Counterclaim for unfair termination
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
p. 7Vitiating factors required to upset a contract

Issues in the judgment

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minor

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

minor

The judgment does not state the case number of the suit on its face

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, "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.