CMC Motors Group v Swaleh (Civil Appeal E068 of 2023) [2026] KECA 496 (KLR)
The bottom line
#Kenya's Court of Appeal threw out a Kshs.4.4 million unfair termination award, confirming employers can dismiss staff for misreporting sales if they follow fair procedure.
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 reasons behind the respondent's termination of employment were fair and lawful
- 2.Whether the learned trial Judge was justified in awarding compensation for unfair termination
Key legal issues
#Whether the reasons for termination were valid and fair (substantive fairness)
The Court found the reasons - misreporting of sales, pre-reporting sales and misadvising the business - valid and fair; the employee's blame of inadequate training was unconvincing given his experience and the absence of any refused request for training.
The employee admitted the variances but blamed lack of training. The Court noted his senior automotive experience in Dubai, including training managers in Kenya, that he had been in the role some nine months before seeking system registration, and that the misconduct involved honest reporting requiring no specialised training. Misreporting for personal benefit undermined the employer's business and justified dismissal.
Whether procedural fairness under Section 41 was met
It was common ground that Section 41 procedure was followed: show cause letter, hearing before the Disciplinary Committee with representation, and a heard and rejected appeal.
The Court recorded that the employee was notified of the allegations, responded, was heard with a colleague/union representative, and exercised a right of appeal which was determined on merit. Neither party contested procedural regularity, so the dispute turned wholly on substantive justification.
Allocation of the burden of proof under Sections 45 and 47(5) of the Employment Act
The employee bears the burden of proving unfair termination on a balance of probabilities; the burden then shifts to the employer to justify the grounds for termination, read with Sections 107 and 108 of the Evidence Act.
Following Lockwood Girls High School vs. Wasike, the Court explained the shifting evidentiary burden: the employee first shows unfair termination, then the employer must demonstrate justified grounds and fair procedure. On the facts, the employer's explanation of the financial variances and the employee's admissions discharged that burden.
Scope of interference with a first-instance factual finding
A first appellate court may re-evaluate the whole evidence and come to a different conclusion, interfering only where there is no evidence or the trial judge acted on a wrong principle or misapprehended the evidence.
Citing Paramount Bank, Ratilal Gova Sumaria and Alfarus Muli, the Court reiterated that a first appeal is a retrial on fact and law. It concluded the ELRC Judge's finding that the reasons for termination were unjustified had no evidential foundation, and thus interfered with and reversed that finding.
Legal principles established
#- A first appeal is by way of retrial: the appellate court is obliged to re-evaluate the evidence and arrive at its own conclusions on fact and law.
- Procedural fairness alone does not make a termination fair; the employer must also prove valid and fair reasons under Section 45 of the Employment Act, and the burden of justifying the grounds rests on the employer under Section 47(5).
- An employee cannot escape accountability for misconduct by attributing it to inadequate training where he presented himself as competent, was hired for a role whose requirements he knew, and never requested further training which the employer refused.
Court orders
#- 1.The appeal succeeds and is allowed
- 2.The Judgment and Decree of Mombasa ELRC No. E665 of 2020 (Agnes Nzei, J.) is set aside
- 3.The award of Kshs.4,400,000 as compensation for unfair termination is set aside
- 4.The appellant shall have the costs of this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Employment and Labour Relations Court, Mombasa
- Mombasa ELRC Case No. E665 of 2020
- Jurisdiction invoked
- First appeal to the Court of Appeal under section 78 of the Civil Procedure Act, Cap 22 (appeal by way of retrial)
Relief refused
#Retention of the ELRC award of Kshs.4,400,000 (eight months' salary) for unfair termination
Having found the termination lawful and procedural, the compensation award was unjustifiable
Costs
As costs follow the event, the appellant shall have the costs of this appeal.
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.
A first appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law.
Once this is established, the burden then shifts to the employer to demonstrate that the grounds for termination were justified and the termination was procedural.
for all intents and purposes, if the respondent felt that he did not suit the job description for the job he was ofiered by the appellant, he had no business applying for it.
In efiect, his actions undermined, and were prejudicial to the appellant's motor vehicle business.
Consequently, the appeal succeeds and is hereby allowed. The Judgement and Decree of Mombasa ELRC No. E665 of 2020 (Agnes Nzei, J.) is hereby set aside. As costs follow the event, the appellant shall have the costs of this appeal.
Issues in the judgment
#The judgment contains contradictory dates for the respondent's employment commencement: the respondent pleaded 6th September 2018 and testified 24th April 2018, while the appellant's witness testified 7th May 2018; the Court itself refers to an appointment letter of 24th April 2018 without reconciling these.
The judgment dates the disciplinary invitation as 19th February 2019 in an early paragraph but the context (termination letter dated 6th March 2020 and appeal heard 30th March 2020) indicates 19th February 2020, an apparent typographical inconsistency.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "CMC Motors Group v Swaleh (Civil Appeal E068 of 2023) [2026] KECA 496 (KLR)", Case Analysis (2026). Court of Appeal at Mombasa (appeal against Mombasa ELRC Case No. E665 of 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/496/eng@2026-03-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.