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ELRCPartially AllowedELRC Cause (Nairobi) – Memorandum of Claim dated 28th October 2020

Kenya Union of Commercial, Food and Allied Workers v New KCC Limited (Employment and Labour Relations Cause E692 of 2020) [2025] KEELRC 2881 (KLR)

Employment and Labour Relations Court
23 October 2025
7,538 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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New KCC's 2017 sackings of 21 workers for alleged price fraud were ruled unfair because the company couldn't prove its case, costing it compensation and legal fees.

What this practically means

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Executive summary

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The Claimant union, on behalf of 21 grievants (salesmen and two clerks formerly employed by the Respondent), challenged terminations dated 31st October 2017 following allegations that the grievants conspired with reconciliation clerks to manipulate the SAP pricing system, obtain stock at underpriced invoices, and sell at trade prices, causing the company a loss of Kshs. 13,526,077.98 per an audit for the 2016/2017 financial year. The grievants denied involvement, contending the sales and reconciliation process was closely supervised, that they had no user rights to alter prices, and that they were denied the audit report before and during the disciplinary hearing, contrary to sections 41 and 43 of the Employment Act. The Respondent maintained the terminations were procedurally sound and substantively justified, and raised jurisdictional and sub judice objections plus the three-year statutory bar on reinstatement. The court found the respondent's evidence internally inconsistent: its own witnesses admitted employees could not fix or alter prices, invoices underpinning the fraud matrix were never filed, some grievants were on approved leave during the alleged fraud, and employees named in the audit matrix faced no action. The hearing invitations also failed to notify grievants of the right to bring a witness or union representative, and grievants were not recalled after the disciplinary committee recommended further investigations. Holding that no valid reason was proved, the court declared the terminations unfair and awarded notice pay, half salary for the suspension period, pending leave days, six months' salary as compensation, and certificates of service, with costs and interest to the grievants. Reinstatement was refused as time-barred under section 12(3)(vii) of the ELRC Act.

Questions the Court framed

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

  1. 1.Whether this Honourable Court has jurisdiction to hear and determine this suit (raised by the Respondent)
  2. 2.Whether the termination of the grievants was on valid reasons and through a fair procedure
  3. 3.Whether the Claimant is deserving of the orders sought

Key legal issues

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01

Whether the respondent proved valid reasons for terminating the grievants' employment

Holding

No valid reason was proved; the evidence left room for doubt that the grievants altered prices or defrauded the respondent.

Reasoning

The respondent's own witnesses admitted employees had no capacity to fix or change prices in the SAP system, yet the respondent alleged the grievants altered them. RW2's evidence was internally inconsistent, and the invoices supporting the pricing fraud matrix were never filed. Some grievants were on approved leave when the alleged fraud occurred, and employees mentioned in the audit matrix were not disciplined.

p. 14
02

Whether the disciplinary procedure was fair under section 41 of the Employment Act

Holding

The procedure was flawed; the hearing invitations did not notify the grievants of their right to be accompanied by a witness or union representative, and the grievants were terminated without being recalled after the committee recommended further investigations.

Reasoning

The invitation letters merely required the grievants to appear and explain their case without informing them they could bring a witness or union representative, contrary to section 41. Although the disciplinary committee recommended further investigations and a systems auditor's input, the grievants were never summoned back; termination letters followed on 31st October 2017 without a final hearing on the completed investigations.

p. 13
03

Whether the court has jurisdiction given the grievants' gross salaries (Respondent's objection)

Holding

The court proceeded to determine the claim on its merits; no express finding upholding or rejecting the jurisdictional objection is recorded in the judgment.

Reasoning

The respondent argued that under Gazette Notice No. 6024 of 2018 and section 7 of the Magistrates Act, claims by employees earning below Kshs. 80,000 gross monthly belong to the Magistrates' Court. The claimant had invoked Rule 5(2) of the ELRC Procedure Rules after conciliation failed. The court did not expressly resolve this issue in its analysis but determined the claim, implying it retained jurisdiction.

p. 13
04

Whether reinstatement was available

Holding

Reinstatement was not available as more than three years had elapsed since the 2017 dismissals.

Reasoning

Section 12(3)(vii) of the Employment and Labour Relations Court Act limits reinstatement orders to dismissals within three years. The grievants were dismissed in 2017, and judgment came in 2025, so the relief was time-barred and the court instead awarded compensation and other monetary reliefs.

p. 13

Legal principles established

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  • An employer bears the burden under section 43 of the Employment Act to prove the reason or reasons for termination; failure to do so renders the termination unfair.
  • Reinstatement under section 12(3)(vii) of the Employment and Labour Relations Court Act is not available where three years have lapsed since dismissal.

Court orders

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  1. 1.1 month’s salary in lieu of notice as per appendix PN2 at page 76 of the claim
  2. 2.Release of ½ salaries for the period of suspension as per appendix 2 of the claim
  3. 3.Pending leave days as computed in appendix PN2 at page 76 of the claim
  4. 4.6 months’ salary as compensation for the unfair termination
  5. 5.Each grievant be issued with a certificate of service
  6. 6.The respondents to pay costs of this suit plus interest at court rates with effect from the date of this judgment

The bench

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

majority

Wrote the judgment

Jurisdiction invoked
Section 5(2) of the Employment and Labour Relations Court (Procedure) Rules, 2016; Employment and Labour Relations Court Act

Relief refused

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Reinstatement with no loss of benefits and earnings

Reinstatement is statutorily unavailable more than three years after dismissal; the grievants were dismissed in 2017

p. 13

Unpaid salaries for days worked prior to suspension (prayer c of the memorandum of claim)

Not included in the court's final orders granting relief

Costs

The respondents to pay costs of this suit plus interest at court rates with effect from the date of this judgment.

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.

Given that there is no proof that valid reason existed to warrant termination of the greviants, I find their termination unfair and unjustified.
p. 14Finding of unfair termination
The evidence as submitted by the respondents leaves room for doubt that the greviants indeed altered prices of goods and defrauded the respondents.
p. 14Evaluation of employer's evidence on alleged fraud
They were not notified of the need to bring a witness or a union member to represent them. To this extent the hearing procedure violated this provisions.
p. 13Breach of section 41 fair procedure
6. The respondents to pay costs of this suit plus interest at court rates with efiect from the date of this judgment.
p. 15Final orders – costs and interest

Issues in the judgment

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minor

Judgment contains no express ruling on the respondent's jurisdictional objection (magistrates' court competence) despite it being argued as the first issue; the court proceeds directly to the merits.

minor

Discrepancy in the judgment between the conciliation provisions cited by the claimant (Sections 41 & 43 of the Labour Relations Act) and those sections being provisions of the Employment Act elsewhere in the judgment.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Union of Commercial, Food and Allied Workers v New KCC Limited (Employment and Labour Relations Cause E692 of 2020) [2025] KEELRC 2881 (KLR)", Case Analysis (2025). ELRC Cause (Nairobi) – Memorandum of Claim dated 28th October 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2881/eng@2025-10-23

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