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ELRCPartially AllowedAppeal No E059 of 2024· [2025] KEELRC 2349 (KLR)

Modern Coast Builders Limited v Sdalim (Appeal E059 of 2024) [2025] KEELRC 2349 (KLR)

Employment and Labour Relations Court
31 July 2025
3,621 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court confirmed an employee's dismissal was unfair because the disciplinary hearing was never completed, but reduced his compensation payout.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Mombasa (Ocharo Kebira, Judge) against a trial Magistrate's judgment which found that the summary dismissal of the Respondent, a Dispatch Clerk employed since 23rd October 2012 and dismissed on 17th February 2020 for allegedly duplicating vouchers, was unfair. The trial court awarded one month's salary in lieu of notice, leave pay of Kshs. 103,068 for three years, twelve months' gross salary (Kshs. 585,864) as compensation for unfair termination, interest and costs. The Appellant challenged the fairness of the process and the reliefs. The court framed two issues: whether the summary dismissal was fair, and whether the reliefs awarded were due. On the first, it held that although the hearing commenced on 10th February 2020, it was deferred to 12th February 2020 and the Appellant failed to prove the Respondent was further heard; the Appellant's pleadings asserted a hearing occurred on 12th February, contradicting counsel's submission, and parties are bound by their pleadings. The dismissal, based on an incomplete disciplinary hearing, was procedurally unfair. The court declined to consider substantive justification, which the trial court had not addressed. On reliefs, the court found the trial Magistrate gave no reasons for awarding the maximum twelve months' compensation and, considering liability arose solely from procedural unfairness and the almost 8 years of service, reduced the award to five months' gross salary, Kshs. 245,300. The leave award was upheld as the Appellant failed to prove it granted statutory annual leave. The appeal succeeded partially; each party was ordered to bear its own costs of the appeal.

Key legal issues

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01

Procedural fairness of the summary dismissal

Holding

The dismissal was procedurally unfair because the disciplinary hearing commenced on 10th February 2020 was deferred to 12th February 2020 and the Appellant failed to prove the Respondent was further heard before dismissal; moreover, the Appellant's pleadings asserted a hearing took place on 12th February, contradicting its submission that the Respondent did not attend.

Reasoning

Section 41 of the Employment Act mandates notification, hearing and consideration before dismissal. The minutes showed the hearing was adjourned to 12th February. The Appellant's pleadings averred that on 12th February the hearing proceeded and a verdict was issued, yet counsel submitted the Respondent failed to attend. Since parties are bound by their pleadings, the contradictory submission could not stand, and the Appellant failed to discharge its burden of proving procedural fairness.

p. 7
02

Quantum of compensation for unfair termination under section 49

Holding

The trial Magistrate gave no reasons for awarding the maximum twelve months' compensation; considering that liability arose solely from lack of procedural fairness and the employee's almost 8 years of service, the award was reduced to five months' gross salary (Kshs. 245,300).

Reasoning

Section 49 confers a discretion on the court to award compensatory relief, which must be exercised with reasons. The trial Magistrate awarded the maximum without explanation. The appellate court, noting liability rested only on procedural unfairness and the length of service, held that a lesser amount was appropriate and set aside the twelve-month award in favour of five months' gross salary.

p. 7
03

Leave pay claim for three years

Holding

The trial Magistrate's award of compensation for untaken leave was upheld; the Appellant failed to prove it discharged its statutory obligation to allow annual leave under section 28, and sick off and paid off days cannot diminish the leave entitlement.

Reasoning

The documents tendered by the Appellant did not relate to annual leave under section 28 of the Employment Act. The employer bore the burden of proving it allowed the statutory annual leave. Sick off and paid off days are distinct from annual leave and cannot be relied upon to defeat a claim for earned but untaken leave days.

p. 7
04

Substantive fairness of the dismissal

Holding

The court declined to determine substantive justification, as the trial court's judgment was based solely on procedural fairness and the court declined the parties' invitation to consider the substantive aspect.

Reasoning

The trial Magistrate's conclusion rested entirely on procedural fairness and did not address substantive justification. Although the parties' submissions invited the appellate court to consider that element, the court declined, respecting the scope of the judgment under appeal.

p. 7

Legal principles established

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  • On a first appeal, the court must reassess the evidence and reach its own conclusions, but will only interfere with findings of fact if they are anchored on no evidence or the trial court acted on wrong principles.
  • Parties are bound by their pleadings, and evidence or submissions contradicting them is irrelevant.
  • A summary dismissal based on an incomplete disciplinary hearing is procedurally unfair.

Court orders

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  1. 1.Appeal succeeds partially, only to the extent that the learned trial Magistrate's award for compensation for unfair dismissal is set aside and reduced to five months' gross salary (Kshs. 245,300)
  2. 2.Each Party to bear its own costs of this appeal

Authorities

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Legislation

  • Employment Actsections 28, 41, 43, 45, 47(5), 49
  • Evidence ActCap 80 (referred to as Cap 180 in the grounds of appeal)

Cases cited (4)

  • Kenya Ports Authority v Kuston [Kenya] Limited
    [2009] 2 EA 212
  • Mohammed Mohammed Jabane v Highstone Butty Tongoi Olenja
    [1986] KLR 661; [1986-1989] EA 183
  • Pius Machafu Isundu v Lavington Security Guards Limited
    [2017] eKLR
  • Kenya Power & Lighting Company Limited v Aggrey Lukorito Wasike
    [2017]
On appeal from
Trial Court (learned trial Magistrate)
Jurisdiction invoked
First appeal from the trial Magistrate's judgment in an employment dispute under the Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Modern Coast Builders Limited v Sdalim (Appeal E059 of 2024) [2025] KEELRC 2349 (KLR)", Case Analysis (2025). Appeal No E059 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2349/eng@2025-07-31

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.