Dismissal for Suspected Crime in Kenya: Police, Courts and Section 44(4)(g)

An employee is arrested, or the company simply believes one of them has stolen from it. Must the employer wait for the police and the courts, or can it act now? Section 44(4)(g) of the Employment Act allows 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 the employer or its property. Dismissal for suspected crime can therefore be lawful in Kenya, but only if the employer also gets the process right. This guide sets out what the Act allows, how the criminal case relates to the disciplinary case, and what an employer should do after the decision.

What section 44 allows

Section 44(3) of the Employment Act permits summary dismissal where an employee, by conduct, has fundamentally breached the contract. Section 44(4) lists matters that may amount to gross misconduct. Two of them concern crime. Paragraph (f) covers an employee arrested in the lawful exercise of a power of arrest for a cognisable offence punishable by imprisonment who is not, within fourteen days, released on bail or bond or otherwise lawfully set at liberty. Paragraph (g) covers an employee who commits, or on reasonable and sufficient grounds is suspected of having committed, a criminal offence against or to the substantial detriment of the employer or its property.

The list is not exhaustive and does not stop either side from disputing whether the facts justify dismissal. In our view, paragraph (g) works best when the employer can name the offence, such as theft, fraud, forgery or bribery, and say how the company or its property was harmed. A vague allegation of “dishonesty” invites a challenge.

Summary dismissal still needs a hearing

Section 41(2) requires the employer, before summarily dismissing an employee under section 44(3) or (4), to hear and consider the employee’s representations, and the employee may be accompanied by a colleague or shop floor union representative under section 41(1). In Bernard Ngugi v G4S Security Services Kenya Limited, the ELRC adopted the view that, apart from daily-wage contracts, an employer must give notice of the allegations and a hearing, and that the only leeway under section 44(1) is a shorter notice period in cases of gross misconduct.

The same case is a warning about inconsistent paperwork. The employer’s letter relied on a contractual notice clause, while its evidence relied on a disciplinary finding. The court treated that wavering as evidence of bad faith. If you dismiss summarily, say so and give the gross misconduct as the reason. Do not blend a summary dismissal with language borrowed from a notice-based termination unless you are clear why.

Reasonable and sufficient grounds

The employer does not need to prove the crime. Section 43(2) treats the reason for termination as what the employer genuinely believed to exist at the time, and section 43(1) requires the employer to prove that reason in any claim. Section 44(4)(g) adds the standard of reasonable and sufficient grounds for suspicion.

In Jacob Oriando Ochanda v Kenya Hospital Association Ltd t/a Nairobi Hospital, the Court of Appeal found reasonable and sufficient grounds to suspect an employee of participating in a fuel-ordering scam, based on how he signed and handled delivery documents. The employer had suspended him with pay, put a show cause letter to him, and held a disciplinary hearing before dismissing him. The Court upheld the dismissal as lawful and procedural.

The criminal case runs separately

Ochanda also illustrates the separation between the two processes. The criminal charges against the employee had been withdrawn under section 87(a) of the Criminal Procedure Code. The Court noted that the discharge was not proof of innocence and could not bar later proceedings on the same facts. It also quoted its earlier statement that an acquittal does not automatically make an employee immune from discipline, because a criminal trial and an internal disciplinary process are distinct, with different procedures and standards of proof.

The practical consequences are these. An employer need not wait for the police or prosecutors. A criminal outcome, in either direction, does not decide the employment case, although an employer who ignores an acquittal should be able to explain why its own grounds remained reasonable. And documents created in the disciplinary process, such as show cause letters, minutes and reports, may later be requested by investigators or produced in court, so write them accurately and neutrally.

If an employee is held in custody, section 18(6) of the Act provides that no wages are payable for a period during which the employee is detained in custody or serving a sentence of imprisonment. That does not remove the need for a fair process before any dismissal.

Reporting to the police or the EACC

For bribery, section 14 of the Anti-Bribery Act requires a report to the Ethics and Anti-Corruption Commission within twenty-four hours of any knowledge or suspicion, and section 21(2) makes it an offence to demote, dismiss or otherwise harass a whistleblower or witness. For other offences, decide with counsel who reports, what is disclosed and to whom. The Data Protection Act requires personal data to be processed lawfully, fairly and only to the extent necessary, so disclose what the report needs and no more. Section 87(2) of the Employment Act confirms that nothing in the Act prevents an employer or employee from being proceeded against under another law for an offence.

After the decision

Several housekeeping duties follow a dismissal. Section 18(4) requires payment of all moneys, allowances and benefits due up to the date of a summary dismissal for lawful cause. Section 18(5)(b) requires the employer, within seven days of a dismissal, to deliver to a labour officer a written report on the circumstances and reasons. Employers with twenty-five or more employees must also notify the nearest employment service office of the termination within two weeks (sections 76(1) and 78). Section 51(1) requires a certificate of service unless the employment lasted under four weeks.

The exposure if a court finds the dismissal unfair is up to twelve months’ gross pay under section 49(1)(c), which section 50 makes the guide for the ELRC. That is why the decision letter, the hearing record and the grounds relied on deserve the same care as the investigation itself, which we cover in our guide to investigating employee fraud.