Peho v Diani Reef Beach Resort & SPA (Appeal E132 of 2024) [2025] KEELRC 384 (KLR)
The bottom line
#A unionised hotel worker's appeal failed because his dispute belonged to his union, not the magistrate's court, which lacked jurisdiction.
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 findings by the trial court that there was no unlawful and unfair termination of employment were justified
- 2.Whether the remedies sought by the appellant should be allowed
- 3.Whether the magistrate's court had jurisdiction to hear a labour relations dispute involving a unionised employee (raised suo motu)
Key legal issues
#Jurisdiction of the magistrate's court over a unionised employee's labour relations dispute
The trial court lacked jurisdiction; the dispute was a labour relations dispute reserved for the ELRC since the appellant was unionised under KUDHEIHA with a Recognition Agreement in place
The Chief Justice's Legal Notice No.6024 of 10 June 2018 conferred jurisdiction on magistrate's courts over employment disputes but singled out labour relations as outside their mandate. A labour relations dispute is one regulated under the Labour Relations Act; under Section 62 of the LRA a trade union must report a dispute to the Minister before suit. The court raised this issue suo motu, holding that jurisdiction must be addressed first even where no party raises it.
Prematurity of the claims given ongoing union negotiations
The appellant's claims were premature because his union, KUDHEIHA, was proactively negotiating his terminal dues with the respondent when he filed suit
The appellant was bound by a fixed-term contract which was to end on 30 April 2020. Following the COVID-19 closure of the respondent's hospitality business, the union engaged the employer to secure terminal dues. The appellant filed suit before those engagements and negotiations were complete, bypassing the union mandate he had donated. His proper recourse, if dissatisfied with the union, was to resign from it first.
Whether there was unfair termination or redundancy
The court did not reach the merits substantively, noting the appellant remained bound by a fixed-term contract that had not been ended by him despite the pandemic closure
The court held that whatever the position on redundancy, the appellant was bound under a fixed-term contract and did not end his contract due to the pandemic closure events, which the respondent admitted. The union engagement over terminal dues was lawful and legitimate, so the appeal on the merits could not be justified once the jurisdictional finding was made.
Legal principles established
#- Magistrate's courts designated under Legal Notice No.6024 of 10 June 2018 may hear employment disputes but not labour relations disputes involving unionised employees, which fall to the ELRC
- A court without jurisdiction must down its tools and any decision it makes is a nullity
- A unionised employee bound by a recognition agreement must pursue the dispute resolution mechanisms under the Labour Relations Act through the union before filing suit
- On a first appeal the court must re-evaluate and reconsider the evidence on record, making allowance for not having seen or heard the witnesses
Court orders
#- 1.The trial court's judgment of 24 May 2024 was not set aside; the appeal was dismissed
- 2.Costs of the appeal awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Magistrate's Court (Kwale, ELRC)
- Kwale CMELRC E007 of 2022
- Jurisdiction invoked
- First appeal to the Employment and Labour Relations Court; jurisdictional analysis based on Legal Notice No.6024 of 10 June 2018 conferring jurisdiction on magistrate's courts and the Labour Relations Act
Relief refused
#Setting aside the trial court judgment and allowing the appellant's claim/terminal dues
The trial court lacked jurisdiction over the labour relations dispute and the claims were premature as union negotiations were ongoing
Costs
Appeal dismissed with costs to the respondent
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.
The basis of the appeal is lost and is hereby dismissed with costs to the respondent. Orders accordingly.
Under Legal Notice No.6024 of 10 June 2018, the magistrate's courts are only allowed to hear employment disputes, not labour relations disputes.
Jurisdiction is everything and without it, a court is obliged to down its tools and cease from acting, for any decision arising therefrom amounts to a nullity.
The claim by the appellant before the trial court ought to have been struck out.
Issues in the judgment
#The court states the claim 'ought to have been struck out' and that the appeal is 'not justified', yet the final order is dismissal of the appeal rather than striking out the underlying claim or setting aside the trial judgment, leaving the disposition of the trial judgment unclear
Inconsistent spelling of the trade union name within the judgment (KUDHEIHA and KUDHIHA)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Peho v Diani Reef Beach Resort & SPA (Appeal E132 of 2024) [2025] KEELRC 384 (KLR)", Case Analysis (2025). ELRC Appeal from Kwale CMELRC E007 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/384/eng@2025-02-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.