Court Orders Stima Sacco To Refund Clients’ Funds

By The Weekly Vision Team

A case in which Eldotec Consultancy Services overpaid former staffer Oliver Jesse Otieno Ksh. 409,359.44 has taken a dramatic turn after Judge Maureen Onyango of the Employment and Labour Relations Court in Eldoret ordered Stima Sacco to deposit the overpaid amount in a joint interest-earnings account.

In an affidavit by Eldotec Consultancy Services’ Employee Experience Advisor, Irene Ongachi, sworn on August 1, 2023, Otieno was offered employment by Eldotec Consultancy Services as a Manager-Compliance Support vide an employment contract dated September 29, 2016, and that at the time material of the suit, his salary was Ksh. 85,433 per month less statutory deductions.

Stima Sacco CEO Gamaliel Hassan/Photo/Courtesy

However, Otieno’s employment came to an end through mutual separation, under which the parties herein signed an agreement dated May 17, 2023. According to Eldotec Consultancy Services, the terms of the separation agreement were that Otieno was to be paid salary up to June 2, 2023, with 26 weeks’ salary as notice pay and 7.75 days as leave days earned and not utilized. Further, as per the separation agreement, the 1st Respondent was entitled to Ksh. 304,084.11.

However, through an inadvertent error, there was a gross miscalculation of the terminal dues payable to Otieno, with the effect that he was paid Ksh. 962,924.33, which amounted to an overpayment of Ksh. 409,359.44. Upon realizing the payment error, the company wrote to Stima Sacco by way of an email requesting a recall of the funds that had been sent to Otieno’s account. Stima Sacco thereafter froze Otieno’s account pending resolution of the overpayment issue. However, despite the company exercising diligence in informing Stima Sacco of the error and Stima Sacco’s undertaking to secure the funds, the Sacco has since utilized some of the overpaid funds to settle debts owing to it on the account of Otieno.

However, Otieno claimed in a quick rejoinder that his former employer’s Human Resource Manager explained to him that Eldotec Consultancy Services had decided to revise and offer him a better package and took him through each item, totalling Ksh. 962,924.93.

He further refuted claims that there was a gross miscalculation of his dues and maintained that the payment of Ksh. 962,924.33 was deliberate and intentional. Further, he claimed that the instant application was overtaken by events as he no longer has funds in his account and cannot raise the said amount as he is currently jobless.

In an affidavit, Otieno further claimed that Eldotec Consultancy Services breached the contract between them by revealing the terms of the contract to Stima Sacco, who in turn illegally deducted his monies to the tune of Ksh. 908,792.46 immediately after the check was deposited and used to clear his outstanding loan, leaving him with Ksh. 51,000.

During the hearing, Stima Sacco was served on September 27, 2023, and an affidavit of service sworn by the counsel on record for the claimant, Nicholas Weru, was duly filed on October 9, 2023. However, Stima Sacco did not enter an appearance, nor did it file a defence to the Statement of Claim. It also did not file a response to the application herein.

In a ruling dated December 7, 2023, the judge noted, “Regrettably, Stima Sacco did not respond to the application so as to shed light on the exact position as regards the said monies deposited into the account held by Otieno in its institution.”.

The ruling reads, “It is therefore my considered opinion that there is a need to preserve the said monies pending the determination of the main suit, so that the parties herein can ventilate the issue of the status of Otieno’s account by viva voce evidence before the court can make a final determination.”.

The final orders read, “In conclusion, I make a finding that this application is merited and allowable.”Pending the hearing and determination of this suit, the 1st and 2nd Respondents (Otieno and Stima Sacco) do and are hereby ordered to jointly and severally deposit the sum of Kshs 409,359.44 in a joint interest-earning account in the name of Eldotec Consultancy Services and Otieno and Stima Sacco.”