Salihiya Company Limited v Ouma & another (Civil Appeal 425 of 2019) [2025] KECA 310 (KLR)
The bottom line
#Kenya's Court of Appeal threw out a Kshs.533,538 employment award because the employees proved no actual dismissal and the company's counterclaim came from the wrong entity.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondents were employees of the appellant (Salihiya Company Limited) or of Salihiya Cargo & Shipping Agency
- 2.Whether there was any termination of the respondents' employment by the appellant, or whether the respondents ceased employment by desertion
- 3.Whether the trial court was justified in converting the cessation of the employment relationship and awarding one month's pay in lieu of notice and three months' salary for unfair termination
- 4.Whether the trial court erred in failing to determine the appellant's counterclaim for Kshs.533,538/-
Key legal issues
#Whether the appellant terminated the respondents' employment
There was no evidence of any action taken by the appellant to dismiss the respondents; both counsel conceded there was no formal termination, and no basis was established for constructive dismissal
On re-evaluation of the evidence, the Court found no proof of any dismissal by the appellant. The respondents' counsel conceded there was no formal termination and instead proposed constructive dismissal on the ground that the employer did not call the respondents back to work. The Court found no legal foundation for constructive dismissal, since the respondents themselves never returned to work after their arrests. The trial court's finding of termination was therefore unsupported and could not stand.
Whether the counterclaim by Salihiya Cargo and Shipping Line Agency could be sustained
It could not, because the counterclaim was not mounted by the defendant in the original suit, and the Court accordingly lacked jurisdiction to grant judgment on it
The counterclaim asserted loss caused by the respondents to Salihiya Cargo & Shipping Agency, which was not a defendant in the consolidated claims. Under Order 7 Rule 3 of the Civil Procedure Rules, a set-off or counterclaim is to be set up by a defendant against the plaintiff's claim. Since the entity asserting the cross-claim was not a defendant, the claim could not be sustained as a counterclaim and no orders were made on it.
Legal principles established
#- On a first appeal, the Court of Appeal is enjoined to re-evaluate the evidence and draw its own conclusions, while making due allowance for not having seen or heard the witnesses
- A counterclaim can only be mounted by the defendant in the suit; a claim by a non-party cannot be sustained as a counterclaim
- A claim that an employer dismissed an employee must be proved by evidence of positive action taken by the employer to terminate the employment
Court orders
#- 1.Appeal allowed
- 2.Judgment of the trial court set aside
- 3.Findings of the trial court substituted with an order dismissing the respondents' suit
- 4.No further orders made with regard to the counterclaim
- 5.Costs of the appeal awarded to the appellant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court
- Not stated
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction over the Employment and Labour Relations Court; no specific provision cited
Relief refused
#Judgment on the counterclaim for Kshs.533,538/- in favour of the appellant/Salihiya Cargo & Shipping Agency
The counterclaim was mounted by a party (Salihiya Cargo and Shipping Line Agency) that was not the defendant in the original suit and was therefore not a proper counterclaim; the Court lacked jurisdiction to grant judgment on it
Costs
Costs of the appeal awarded to the appellant
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Accordingly, the appeal is allowed and we set aside the judgment of the trial court. We substitute the findings of the trial court with an order dismissing the respondents' suit.
On a first appeal from the High Court, the Court of Appeal should reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses
The counterclaim herein was not mounted by the defendant in the original suit. Therefore, it could not be sustained as a counterclaim.
As costs follow the event, the costs of this appeal are awarded to the appellant.
Issues in the judgment
#The judgment inconsistently renders the name of the criminal case cited as Republic vs Mary Achieng Auma and Nancy Adhiambo Auma, which does not match the respondents' names (Mary Achieng Ouma and Jecinta Adhiambo Ouma)
The judgment records Mr. Ojienda as counsel 'When canvassing the respondents' appeal before us', although the respondents are the respondents in this appeal
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Ferrotech Industries Limited v Myombo (Appeal E210 of 2024) [2025] KEELRC 979 (KLR)[2025] KEELRC 979 (KLR)27 Mar 2025applied
Cite this brief
#Cite this brief
Caselaw, "Salihiya Company Limited v Ouma & another (Civil Appeal 425 of 2019) [2025] KECA 310 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/310/eng@2025-02-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.