Sidoman Investments Company Limited v Mcharo (Appeal E154 of 2025) [2025] KEELRC 3690 (KLR)
The bottom line
#A Kenyan court cut a driver's unfair termination award but ruled that even gross misconduct requires a proper hearing before dismissal.
What this practically means
#Executive summary
#Key legal issues
#Fairness of termination
Termination was unfair for want of a disciplinary hearing contrary to sections 41 and 45
The employee was allegedly summoned only to hand over the vehicle, not to attend a disciplinary hearing. No minutes of any hearing were produced. Where the employer could not reach the employee, this should have been demonstrated to the court; failure to invite the employee to address the misconduct rendered the termination unfair.
Job category and underpayment
Although the contract described the respondent as a driver, his actual duties driving a truck with a trailer made him a heavy commercial driver, attracting a regulated wage
The court looked to duties actually allocated rather than the contractual designation. The applicable wage for a heavy commercial driver was Ksh. 34,302.75 plus 15% house allowance (Ksh. 39,450.86), creating a monthly underpayment of Ksh. 19,459.86.
Counterclaim for negligence and unreturned tools
Counterclaim allowed for Ksh. 2,563,285 plus Ksh. 113,000 for unreturned items as unchallenged and supported by witnesses
The respondent filed no response to the counterclaim. Under section 19 of the Act the employer may deduct losses caused by an employee's negligence, and the employee was accountable for tools of work allocated to him. The trial magistrate erred in failing to determine the counterclaim despite witnesses testifying.
Legal principles established
#- Compensation under section 49 of the Employment Act should be tabulated on the gross wage including house allowance
- Even where gross misconduct justifies summary dismissal, notice to attend and address a disciplinary hearing is mandatory under sections 35 and 41
- Underpayments constitute a continuing injury claimable only within 12 months of cessation under section 90
- Accrued leave may accumulate only up to 18 months where the employee fails to apply for leave
- Service pay is not payable where statutory dues are proved paid; the employer must show proof of statutory payments under section 35(5) and (6)
Court orders
#- 1.Compensation KSh. 394,508.60
- 2.Notice pay KSh. 39,405.86
- 3.Service pay KSh. 59,221.15
- 4.Underpayments KSh. 233,518.32
- 5.Accrued leave pay KSh. 37,653.85
- 6.Counterclaim allowed: loss to motor vehicle KCL 784D KSh. 2,563,285
- 7.Costs of items not handed over KSh. 113,000
- 8.The payments above shall be offset, whichever is higher
- 9.Each party to bear its own costs for the appeal and trial court
- On appeal from
- Magistrates' Court (Employment and Labour Relations), Mombasa
- CMELRC No. E267 of 2023
- Jurisdiction invoked
- First appeal from the trial court under the Employment and Labour Relations Court jurisdiction (Employment Act and ELRC Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sidoman Investments Company Limited v Mcharo (Appeal E154 of 2025) [2025] KEELRC 3690 (KLR)", Case Analysis (2025). ELRCA Appeal from Mombasa CMELRC No. E267 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/3690/eng@2025-12-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.