The Court of Appeal dismissed an appeal by a former employee of the Nairobi City Water and Sewerage Company (NCWSC) who was sacked for his role in the loss of Sh1.2 million in company funds.
Stephen Ndolo, a former Cashier Verification Supervisor, had challenged his 2013 dismissal, arguing that his termination was unfair and that the company’s cash management system was flawed.
However, in a judgment delivered on January 16, 2026 a three-judge bench comprising Justices Francis Tuiyott, Aggrey Muchelule, and George Vincent Odunga found that Ndolo’s failure to account for the cash constituted gross misconduct and justified his summary dismissal.
According to court documents, Ndolo was on duty in August 2013 when he allegedly gave Sh1.2 million in cash to two individuals who presented an I.O.U. warrant, claiming they had been sent by the company’s Managing Director.
Ndolo claimed the payment was made in good faith and followed past practice.
However, the company later discovered that the two recipients were not its employees, the Managing Director’s signature was forged, and the money was never recovered.
The appellate judges agreed with the trial court that Ndolo did not exercise due care expected of someone in his position.
They said Ndolo failed to verify the identity of the individuals, confirm the authenticity of the authorization, record the transaction in the official register and to report or surrender the I.O.U. before proceeding on leave.
“The appellant’s conduct fell short of what was required of an employee of his position and standing, and that this led the respondent to lose a substantial amount of money,” ruled the court.
The judges ruled that Ndolo’s actions broke the mutual trust required in an employment relationship, especially for a finance officer.
NCWSC had argued that an internal memo issued in 2012 required all daily collections to be banked and prohibited cash payments before banking.
The company maintained that Ndolo violated clear internal controls.
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