https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2032

Hantoosh v Postal Corporation Kenya (Employment and Labour Relations Cause 280 of 2014) [2026] KEELRC 2032 (KLR) (25 June 2026) (Judgment) Neutral citation: [2026] KEELRC 2032 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Mombasa Employment and Labour Relations Cause 280 of 2014 K Ocharo, J June 25, 2026 Between Khalid Hantoosh Claimant and Postal Corporation Kenya Respondent Judgment Introduction And Procedural Background 1.This suit traces its origin to a Plaint dated 21st June 2006, filed in the High Court of Kenya at Mombasa as Civil Suit No. 175 of 2006, by which the Claimant, Khalid S. Hantoosh, sued his former employer, the Respondent, Postal Corporation of Kenya, alleging wrongful and unfair termination of his employment, together with a claim for defamation arising from the terms of the charge levelled against him. The Respondent entered appearance and filed a Statement of Defence dated 21st August 2006. 2.The pleadings were thereafter amended on more than one occasion. The Plaint was amended on 15th September 2008 and again re-amended, the Re-Amended Plaint having been drawn on 2nd April 2017, leave to re-amend having been granted by the Court on 10th April 2017, and the same filed on 21st April 2017. The Statement of Defence was similarly amended on 22nd October 2008 and re-amended on 4th October 2017. It is upon this final set of pleadings, namely the Re-Amended Plaint dated 21st April 2017 and the Re-Amended Statement of Defence (re-amended response to claim) dated 4th October 2017, that the parties ultimately went to trial. 3.With the establishment of the Employment and Labour Relations Court and the consequent transfer and re-numbering of employment and labour disputes previously filed in the High Court, this suit came to be registered and prosecuted before this Court as Cause No. 280 of 2014. 4.The matter suffered a further significant interruption. The Respondent raised a Notice of Preliminary Objection contending that the suit was time-barred, which objection was upheld by Ndolo, J. vide her ruling of 28th February 2019, resulting in the dismissal of the suit in its entirety. Aggrieved, the Claimant preferred Civil Appeal No. 137 of 2019, which appeal was allowed on 5th November 2021, the Court of Appeal holding that the suit was not statute barred and remitting the same to this Court for hearing on the merits. This Court does not revisit that question, the same having been conclusively settled by a superior court. 5.Upon remission, the suit proceeded to a full hearing. The parties adopted their respective filed witness statements as their evidence in chief, subject to cross-examination and re-examination. The Claimant testified as the sole witness in support of his case. The Respondent called four witnesses, namely: Nancy Njeri Mathenge (RW1), Assistant Manager, Employee Relations at the material time and later General Manager, Human Resource; Henry (Kevogo) Baraza (RW2), the Respondent's Investigating Officer; Jairus Nzalo Baraka (RW3), Head Postmaster "B" in charge of Express Mail Service; and John Tonui (RW4), then Manager, Human Resource, later Postmaster and Chief Executive Officer of the Respondent. 6.At the close of the hearing, both parties filed final written submissions, the Claimant's Submissions having been filed on 31st October 2025 and the Respondent's Final Submissions dated 25th November 2025. This judgment follows upon a full evaluation of the pleadings, the evidence on record, the documentary exhibits produced by both sides, and the rival submissions. The Claimant's Case 7.The Claimant's case, as pleaded and as borne out by his evidence, is that he joined the Respondent's predecessor, Kenya Posts and Telecommunications Corporation, as a casual employee on 16th November 1983, and was confirmed in employment on 1st April 1984. He was upgraded to the pensionable post of Postal Officer III on 13th September 1986, promoted to Postal Superintendent II on 1st January 1994, and again promoted, vide a letter dated 28th February 2001, with effect from 1st March 2001. He served variously as a sorting officer, in the registration office, in the parcels office, at the counter section, and finally in the strong room section, where he was in charge of remittances at the General Post Office, Mombasa, a supervisory position with responsibility for receiving, listing and issuing receipt books and money order pads to counter officers. 8.Vide a letter dated 18th May 2004, the Respondent charged the Claimant as follows:“Re: Negligence of duty leading to loss of official cash amounting to Kshs. 6,502,720/- at GPO Mombasa. It has been reported that on diverse dates between 27/11/2003 and 5th December 2003 there was a massive misappropriation and theft of official cash through non accounting of express money orders (XMO) issued at GPO Mombasa due to your culpable negligence. It is indicated that during this period you were the O/C Remittance and due to your commissions and omission the corporation lost the above colossal sum of money. As the O/C Remittance you failed to adhere to the official instructions as communicated to you by the Head postmaster "A" Mombasa which you were made aware through his letter DF.1260 dated 27/7/2003, requiring you to submit a list of all Receipt Books inclusive of money order pads to O/C cash accounts "Daily" for cross checking to ensure that they have been shown on P165 counter balance book or have been issued and are due for verification. You also failed to alert the O/C cash accounts when he locally delegated his duties of issuing receipt Books to the O/C counter. Due to your negligence the suspect Mr. Abdulrazak was able to misappropriate the above amount without being detected." 9.The Claimant responded to the charge vide his letter dated 25th May 2004, was subjected to a disciplinary hearing before a panel, and was summarily dismissed vide a letter dated 19th October 2004 signed by the Postmaster General. He lodged his first appeal on 1st November 2004, which appeal was rejected vide a letter dated 13th July 2005 (received on 15th July 2005), upholding the original decision. Upon further representation, and after being advised to adduce fresh evidence, he lodged a second appeal on 1st August 2005, which was likewise rejected vide a letter dated 5th October 2005 (received on 7th October 2005). A further plea made vide his letter of 12th October 2005 did not yield any different outcome. 10.The gravamen of the Claimant's case is that his dismissal was unlawful in that: the circular said to have been breached (DF.1260 of 27th July 2003) was never brought to his attention; he was not the sole custodian of the property said to have been lost; the negligence alleged against him was never proved; the totality of the circumstances was disregarded; he was held liable for the acts and omissions of other personnel; and the Respondent's own human resource disciplinary procedures and regulations were not adhered to in processing his case. In particular, he avers that under the Respondent's Staff Discipline Code (the Posta Code/Postal Rules), clause (e), his alleged offence of negligence fell under the category of "serious offences", in respect of which an offender was, in the first instance, entitled only to be warned once in writing, with disciplinary action reserved for a repeat of the offence; there having been no prior offence or warning in his case, summary dismissal was not an available sanction. 11.The Claimant places particular reliance on a report dated 27th June 2005, addressed to the Respondent's Appeals Committee and signed by RW4, John Tonui, which reads, in respect of the Claimant, as follows:“Hantoosh: Mr. Hantoosh was the issuing officer (of postal orders) and since he issued against signature he cannot be entirely blamed. It's recommended that he be reinstated from the current date and reduced in rank as a warning to officers who are not keen on their jobs." 12.The Claimant contends that this report, prepared by his own superior officer following investigation, exonerated him of the graver culpability of fraud and instead recommended reinstatement with demotion; and that, tellingly, barely over two weeks later, the Appeals Committee rejected his first appeal vide the letter of 13th July 2005 and upheld the summary dismissal, without disclosing any reason for departing from its own reporting officer's recommendation. 13.The Claimant further avers that on 21st April 2004 he was placed under a police bond to appear as a prosecution witness for the Respondent in criminal proceedings (Criminal Case No. 215 of 2004, Chief Magistrate's Court, Mombasa) against a counter officer, one Abdulrazak Mahfudh, who was alleged to have stolen in excess of Kshs. 6.5 million from the Respondent; that the criminal case did not proceed to conclusion, being withdrawn/dismissed for want of evidence before he could testify; and that this conduct on the part of the Respondent, of relying on him as a prosecution witness against the very suspect said to have perpetrated the fraud, is inconsistent with any genuine belief that he was himself complicit in that fraud. 14.In his Re-Amended Plaint, the Claimant pleaded that the terms of the charge letter of18th May 2004 were defamatory of him, in that they were understood to mean that he was incompetent, unreliable, dishonest, negligent, unworthy of trust, that he had worked in collusion with Abdulrazak Mahfudh to defraud the Respondent, and that he was a thief. 15.The reliefs claimed at paragraph 6 of the Re-Amended Plaint total Kshs. 328,125/-, comprising (a) three months' salary in lieu of notice, computed at the Claimant's gross monthly salary of Kshs. 29,835/-, being Kshs. 89,505/-; and (b) a sum styled as gratuity, computed at fifteen (15) days' pay for every completed year of service over 20 years, being Kshs. 298,350/-. The Claimant additionally sought an order for monthly pension dues in accordance with the Respondent's pension scheme, and damages for defamation, together with costs. In his final Submissions, learned counsel for the Claimant confirmed that the prayer relating to pension dues has since been resolved and stands overtaken by events, and that the prayer for damages for defamation has been abandoned. Learned counsel maintained the claim to the sum of Kshs. 328,125/-, and, while the sum at (b) above was pleaded as gratuity, counsel in submissions sought to justify the same instead by reference to the repealed Remuneration of Wages and Conditions of Employment Act, Cap. 229. The Respondent's Case 16.The Respondent's case, as pleaded in the Re-Amended Statement of Defence and borne out by the evidence of its four witnesses, is a full denial of liability. It avers that as Officer Controlling Remittance, the Claimant carried key supervisory responsibilities: supervision of all counter officers; issuance of Express Money Order (XMO) pads to counter officers strictly against signature; and ensuring that all receipt books and money order pads were submitted daily to the officer controlling cash accounts, for reconciliation against the counter record book (P165), a procedure communicated to all officers in charge of departments through the order book vide circular DF.1260 dated 27th July 2003 (Defence Exhibit 2). 17.It is the Respondent's case that the Claimant, in disregard of this procedure, delegated the issuance of XMO pads to a supervisor counter officer and permitted counter officers to collect such pads without supervision and without signing the receipt book register (Form P.81), thereby creating the opening exploited by Abdulrazak Mahfudh, a counter officer, to perpetrate a fraud upon the Respondent, a public body, in a sum stated in the charge letter and the evidence of RW1 and RW2 as Kshs. 6,502,720/- (and, elsewhere in the record, as Kshs. 5,924,731/-). 18.In her evidence, RW1, Nancy Njeri Mathenge, testified to specific discrepancies said to evidence the Claimant's lack of diligence: that Entry 33 on Form P.81 was issued to the suspect on 25th November 2003 but shows a completion date of 27th November 2003, notwithstanding that the stamp on the last receipt was dated 25th November 2003, a discrepancy of two days; and that Entry 39 on the same form shows a booklet issued and completed on 1st September 2003 while bearing a stamp dated 2nd September 2003. On this basis, the Respondent maintains that the Claimant's laxity in the performance of his duties enabled the fraud and amounted to gross negligence warranting summary dismissal. 19.The Respondent's case is that the Claimant, together with several other implicated officers, was taken through a full disciplinary process: charge letter of 18th May 2004, written response of 25th May 2004, hearing before a duly constituted disciplinary panel of seven members, dismissal vide letter of 19th October 2004, and two successive appeals, both of which upheld the original decision (rejections communicated vide letters dated 13th July 2005 and 5th October 2005 respectively). The Respondent maintains that the rule of audi alteram partem was observed to the letter. 20.On the recommendation in RW4 Tonui's report of 27th June 2005 that the Claimant be reinstated and demoted, the Respondent's position, advanced principally through RW2, is that this was merely Mr Tonui's personal opinion, not binding on the seven-member disciplinary/appeals panel, and that the considered view of the full panel could not be displaced by the opinion of one member; further, that the sum lost, being close to Kshs.6,500,000/-, could not be treated as a minor infraction. 21.On the defamation claim, the Respondent pleaded, in the alternative, that the words complained of were never published to any third party, and, further and in any event, that the particulars set out in the charge letter were true in substance and in fact, namely that the Claimant was the supervisor in charge of the remittance section and sole custodian of the relevant key, that he issued the money orders in question, and that he failed to ensure receipt books were submitted daily and failed to alert the officer controlling cash accounts when he delegated his duties, resulting in his failure to detect the fraud within his area of responsibility. 22.On the claims at paragraph 6 of the Re-Amended Plaint, the Respondent's position is that the Claimant, having been summarily dismissed, is not entitled to notice pay; and that he is not entitled to gratuity, being a benefit that must be expressly provided for under a contract, regulation or statute, no such provision having been demonstrated, and the Claimant being, in any event, a member of a separate pension scheme against whose trustees any claim to retirement benefits properly lies. The Respondent further objects that the Claimant, having pleaded the sum at paragraph 6(b) as gratuity, cannot at the submissions stage recast the same as a claim for statutory compensation under Cap. 229 of the Laws of Kenya, that basis never having been pleaded. 23.The Claimant adopted his witness statements and testified that supervision of cashiers was not one of his roles; that he was in charge of distributing stamps and issuing receipt books to counter officers across the Coast region and of banking monies received; that Abdulrazak Mahfudh, the counter officer said to have perpetrated the fraud, reported to a different officer in charge of the counter and was not under his direct supervision; that he had, between 1st September and 5th December 2003, delegated his duty of issuing books to the counter supervisor as he was entitled to do; that he never saw and never signed for the DF.1260 circular; that he was bonded to testify as a witness in the criminal case against Abdulrazak Mahfudh; and that there was no time he issued a receipt book without receiving back the used empty shell. He maintained, in cross-examination and re-examination alike, that he was never issued with any warning, notwithstanding that under the Respondent's Postal Code, a first and serious offence attracted only a warning, punishment being reserved for a repeat offence, and that there was no next offence in his case. 24.RW2, Henry Baraza the Investigating Officer, testified in chief to the investigations he conducted, tracing the fraud to unaccounted Money Order pad serial numbers issued to a counter officer, and to his conclusion that the supervisors on duty, including the Claimant, had been negligent in failing to follow laid-down procedures. Under cross-examination, however, RW2 made a number of material concessions: that he was aware Mr Tonui's report recommended that the Claimant, together with another implicated officer, George Dena Munga, be reinstated; that Mr Munga was, in the event, reinstated and given only a final warning; that, per Mr Tonui's report, it was Abdulrazak Mahfudh who was the fraudster, having been issued with two different receipt/money order booklets contrary to procedure; that he did not personally interview Abdulrazak Mahfudh in the course of his investigations; that Mahfudh was separately charged criminally, and the Claimant had been lined up as a State witness in that prosecution, a case which was withdrawn before the Claimant could testify; and that, pursuant to clause (e) of the Respondent's Postal Code, a first and serious offence attracted only a warning, with punishment reserved for a repeat offence. He nonetheless maintained that Mr Tonui's recommendation was not binding on the panel, that the panel's view could not be overturned by one member's opinion, and that the Respondent had lost close to Kshs. 6,500,000/- through the Claimant's negligence, such that the infraction could not be treated as minor. 25.RW3, Jairus Nzalo Baraka under cross examination testified that the Claimant was required to issue receipt/money order booklets against the signatures of the officers to whom they were issued. However, he conceded that the Respondent had placed no evidence before this Court to show that the Claimant issued such booklets without obtaining the requisite signatures, and, on that basis, that the Claimant was not shown to have been involved in the fraud. 26.RW4, John Tonui, under cross examination testified that the Claimant had been charged with negligence leading to the loss of funds, and that under the Respondent's disciplinary policy offences were classified as minor or serious. Further, he could not say whether the Claimant had previously been the subject of any warning. He confirmed authorship of the report dated 27th June 2005, clarified that his reference therein to "the fraudster" was to Abdulrazak Mahfudh and not the Claimant, and confirmed that his recommendation regarding the Claimant was that he be reinstated, subject to demotion as a penalty. Issues For Determination 27.The following issues fall for determination:a.Whether the summary dismissal of the Claimant was wrongful and/or unfair;b.Whether the Claimant is entitled to the reliefs pleaded at paragraph 6 of the Re-Amended Plaint;c.Whether any order is due in respect of the pension dues and defamation claims; and(d) Who bears the costs of the suit. Analysis And Determination 28.It is common ground, and this Court so finds, that the substantive law applicable to this dispute is the repealed Employment Act, Cap. 226 of the Laws of Kenya. The cause of action crystallised in 2004, well before the Employment Act, 2007 came into force on 2nd June 2008. This Court associates itself with the position taken by the Court of Appeal in British American Tobacco (K) Ltd v Kenya Union of Commercial Food and Allied Workers (KUCFAW), [2019] KECA 698[KLR], that it is the law in force at the time the cause of action arose that governs the rights and obligations of the parties, not any later enactment. 29.On whether the summary dismissal was wrongful and/or unfair, this Court is guided by the reasonable employer test as stated in Halsbury's Laws of England, 4th Edition, Vol. 16(1B), paragraph 642, applied by our Court of Appeal in CFC Stanbic Limited v Danson Mwashako Mwakuwona [2015] eKLR, and referenced again in British American Tobacco (K) Ltd v KUCFAW (supra):“In adjudicating on the reasonableness of the employer's conduct, an employment tribunal must not simply substitute its own views for those of the employer and decide whether it would have dismissed on those facts; it must make a wider inquiry to determine whether a reasonable employer could have decided to dismiss on those facts. The basis of this approach (the range of reasonable responses test) is that in many cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view and another quite reasonably take another; the function of a tribunal as an industrial jury is to determine whether the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band, the dismissal is fair; but if the dismissal falls outside the band, it is unfair." 30.This Court is also alive to the closely related three-limb test in British Home Stores Ltd v Burchell (1980) ICR 303 EAT: that the employer believed at the time of termination that the employee was guilty of the allegations; that the employer had reasonable grounds for that belief; and that the employer carried out as much investigation as was reasonable in the circumstances. The standard of proof applicable to disciplinary proceedings between employer and employee is proof on a balance of probabilities: Judicial Service Commission v Gladys Boss Shollei & Another [2014] eKLR. 31.Applying these principles, this Court is not satisfied, on a balance of probabilities, that the Claimant was negligent as alleged. RW3, called precisely to speak to the Claimant's duty to issue booklets against signature, conceded under cross-examination that no evidence was placed before this Court to show that the Claimant issued booklets without obtaining the requisite signatures. This concession goes to the very heart of the charge and is, in this Court's assessment, fatal to the Respondent's case on liability. 32.Of considerable significance, the report of RW4, the Claimant's superior officer who investigated the matter, found in terms that the Claimant "issued against signature" and "cannot be entirely blamed", and recommended reinstatement subject only to demotion. Where an employer is presented with such a considered investigative finding from a superior officer seized of the facts and elects nonetheless to impose the graver sanction of summary dismissal, it is incumbent on the employer to articulate its reasons for that departure. None were disclosed to this Court. It is particularly telling that the Appeals Committee rejected the Claimant's first appeal, vide the letter of 13th July 2005, barely over two weeks after receiving Mr Tonui's report of 27th June 2005, without engaging with or explaining its departure from that report's findings and recommendation. 33.This conclusion is fortified by the undisputed evidence that George Dena Munga, another officer implicated in the same events and the subject of an identical recommendation in the very same report, was reinstated and given only a final warning, while the Claimant was summarily dismissed. No explanation was tendered for this differential treatment. An employer that metes out markedly disparate outcomes to similarly situated employees implicated in the same events, without explanation, cannot be said to have acted within the band of reasonable responses open to a reasonable employer. 34.The point is reinforced by the Respondent's own conduct in bonding the Claimant to testify as a prosecution witness against Abdulrazak Mahfudh in the very criminal proceedings arising from the fraud for which the Claimant was purportedly held responsible; a genuine belief in the Claimant's complicity sits uneasily with a simultaneous decision to rely on him as a prosecution witness against the person identified in the same report as the actual fraudster. This is inconsistent with the first limb of the Burchell test. 35.Further, on the Claimant's undisputed evidence, he was never issued with a prior warning, notwithstanding that under clause (e) of the Respondent's own Postal Code, a first and serious offence of negligence attracted only a warning, with punishment reserved for a repeat offence, a position RW2 himself confirmed in cross-examination and which RW4 could not contradict. There being no proven prior offence, summary dismissal for an unproven, first alleged infraction fell outside the disciplinary sanctions available to the Respondent under its own code, consistently applied. 36.For these reasons, this Court finds that no reasonable employer, faced with the same body of evidence available to the Respondent, could have arrived at the decision to summarily dismiss the Claimant. The summary dismissal was wrongful. 37Turning to the reliefs, the Claimant, having been wrongfully summarily dismissed, is entitled to payment in lieu of notice. On the pleaded and undisputed figures (Re-Amended Plaint, paragraph 6(a); Respondent's Final Submissions, paragraph 2), this is three months' gross salary at Kshs. 29,835/- per month, totalling Kshs. 89,505.00, which sum this Court awards. 38.As regards the sum of Kshs. 298,350/- claimed at paragraph 6(b) of the Re-Amended Plaint, this Court declines to award the same, for three cumulative reasons. First, the sum is pleaded as gratuity, a benefit that must be expressly provided for under a contract of service, collective bargaining agreement, or statute; no such provision has been demonstrated in the Claimant's contract of service or the Respondent's regulations and practice. See Murata Sacco Society Ltd v Banking Insurance and Finance Union (Kenya) [2025] KECA 173 (KLR. Second, the alternative legal basis advanced in the Claimant's final submissions, namely the repealed Remuneration of Wages and Conditions of Employment Act, Cap. 229, was never pleaded; it is trite that a party is bound by its pleadings, and a new statutory basis for a claim cannot be introduced for the first time in submissions. Third, and in any event, it is common ground that the Claimant was a member of a separate pension scheme; his own evidence was that he has been paid his pension, and any residual entitlement in that regard lies against the trustees of that scheme, not against the Respondent. 39.The prayer for an order directing payment of monthly pension dues, having been confirmed by the Claimant's own counsel to have been resolved and overtaken by events, requires no further order from this Court. 40.The claim for damages for defamation, having been expressly abandoned by the Claimant's counsel in submissions, is not determined on its merits. This Court observes, in passing only, that the claim would in any event have faced considerable difficulty, the Respondent having pleaded both absence of publication to any third party and justification, and no evidence of publication beyond the internal disciplinary process having been placed on record. 41.The sum awarded herein shall attract interest at court rates from 21st June 2006, being the date of filing of the suit, until payment in full. A successful litigant ought not to be kept out of the fruits of a just claim without compensation for delay, particularly where, as here, much of the delay is attributable to the passage of time, an interlocutory appeal, and the several changes in coram over the life of this matter. 42.On costs, it is trite that costs follow the event. The Claimant having substantially succeeded, this Court finds it just to award him the costs of the suit. Findings And Disposition 43.For the reasons set out above, this Court makes the following findings and final orders:(i)The law applicable to this dispute is the repealed Employment Act, Cap. 226 of the Laws of Kenya.ii.The summary dismissal of the Claimant by the Respondent was wrongful. Judgment is entered in favour of the Claimant against the Respondent.iii.The Respondent shall pay to the Claimant three (3) months' gross salary in lieu of notice, being Kshs. 89,505.00.iv.The claim for Kshs. 298,350/- (pleaded as gratuity) is declined, for want of a proven contractual or regulatory basis and for the reasons set out at paragraph 39 above. The Claimant is at liberty to pursue any outstanding pension benefits against the trustees of the pension scheme to which he belonged.v.No further order is made in respect of the pension dues prayer, the same having been resolved and overtaken by events.vi.The claim for general damages for defamation, having been abandoned, is not determined and no order is made in respect thereof.vii.The decretal sum in (iii) above shall attract interest at court rates from 21st June 2006 until payment in full.viii.The Claimant shall have the costs of the suit.It is so ordered. DATED, SIGNED AND DELIVERED AT MOMBASA THIS 25TH DAY OF JUNE 2026.OCHARO KEBIRAJUDGE