How to Terminate an Employee for Theft: A Step-by-Step Guide for Kenyan Employers

Employee theft is one of the most difficult and sensitive issues any employer can face. Beyond the financial loss, it tests a company’s integrity, policies, and trust structure. Knowing how to terminate an employee for theft correctly ensures that justice is served without exposing your business to legal risk.

At Ultimate Forensic Consultants Ltd, we assist employers and HR departments in investigating theft cases, collecting admissible evidence, and working with legal teams to ensure terminations are handled ethically and lawfully.

1. Understanding the Legal Context

In Kenya, employee termination is governed by the Employment Act (2007). According to Section 44, theft by an employee is a valid ground for summary dismissal — meaning immediate termination without notice.

However, the law also requires due process — the employee must be given a fair hearing, and evidence of the alleged theft must be credible and properly documented.

A termination based on suspicion alone, without evidence, may result in a wrongful dismissal claim at the Employment and Labour Relations Court.

2. Gather and Preserve Evidence

Before taking any disciplinary action, ensure that the theft claim is backed by solid evidence. This includes:

Audit reports or financial discrepancies
Surveillance footage (if applicable)
Questioned or forged documents
Witness statements
Communication records (emails, receipts, etc.)

For accuracy and admissibility, consider engaging a forensic investigator.
At Ultimate Forensic Consultants Ltd, we use document examination, handwriting analysis, and fraud investigation techniques to establish factual proof of theft while maintaining the integrity of evidence.

3. Suspend the Employee (If Necessary)

If the alleged theft is serious, suspend the employee on full pay pending investigation.
This protects company property and allows for an impartial review.

Send a written suspension letter specifying:

The reason for suspension
Duration (usually 14 days)
A clear statement that it is not a dismissal but a precautionary step pending investigation

This ensures compliance with Kenyan labour laws and demonstrates procedural fairness.

4. Conduct a Fair and Transparent Investigation

An internal investigation should be:

Confidential: Only authorized personnel should participate.
Comprehensive: Review financial data, systems logs, and statements.
Objective: Avoid assumptions; base conclusions on evidence.

Engaging external experts like Ultimate Forensic Consultants Ltd ensures neutrality.
We provide professional forensic reports that can stand scrutiny in disciplinary hearings or court proceedings.

5. Invite the Employee to a Disciplinary Hearing

Once the investigation confirms wrongdoing, issue a written notice inviting the employee to a disciplinary hearing.
This notice should:

Clearly outline the allegations
Include a summary of the evidence
Give the employee a chance to respond
Allow them to bring a colleague or representative for support

This fulfills the Section 41 requirement of the Employment Act, ensuring the process is fair and defensible.

6. Conduct the Hearing and Document Everything

During the hearing:

Present the evidence clearly and factually
Allow the employee to give their side
Take detailed minutes of the session
Have all parties sign off on the hearing report

If the evidence confirms theft beyond reasonable doubt, the panel may recommend summary dismissal.

Documentation is key — it protects your company from claims of unfair termination.

7. Issue the Termination Letter

After the hearing and decision, issue a formal termination letter stating:

The specific reason (theft or dishonesty)
Reference to the evidence reviewed
The date of termination
The employee’s rights to appeal or collect pending dues (if any)

Ensure the letter is factual, not accusatory.
Attach copies of the evidence file to your HR records for future reference.

8. Secure Company Assets and Data

Immediately after termination:

Recover company equipment, keys, or ID cards
Revoke access to systems, email, and databases
Inform relevant departments (IT, security, finance)
Review related records for further discrepancies

If forensic investigation reveals deeper collusion or loss, a criminal complaint can follow — supported by your investigation file and forensic report.

9. Learn and Strengthen Internal Controls

Every case of theft is an opportunity to reinforce prevention.
After termination, review:

Hiring and vetting processes
Cash handling and stock procedures
Employee supervision systems
Whistleblowing and ethics channels

Ultimate Forensic Consultants Ltd can assist in reviewing and redesigning these systems through forensic risk audits and background screening to prevent future incidents.

10. Why Engage a Forensic Expert Before Termination

Forensic experts help you:

Verify facts objectively
Gather admissible evidence
Protect your company from wrongful dismissal claims
Provide expert reports usable in court
Maintain confidentiality and professionalism throughout the process

Our team at Ultimate Forensic Consultants Ltd ensures that every decision to terminate an employee for theft is supported by verified, scientific, and unbiased findings.

Conclusion: Justice Through Forensics

Knowing how to terminate an employee for theft requires a balance between protecting your business and upholding the law. The right process safeguards your company’s integrity while preserving fairness for all parties involved.

At Ultimate Forensic Consultants Ltd, we believe in Justice Through Forensics.
We help employers handle internal theft cases with professionalism, confidentiality, and legal compliance — from investigation to termination.

Need Assistance Investigating Employee Theft?

Contact Ultimate Forensic Consultants Ltd for expert forensic and investigative support.