Sephardic practice allows one to remain seated during Kaddish, but if one had been standing when Kaddish begins, then he must remain standing.
If somebody sees his fellow about to sit down during Kaddish, then he should remind him of the Halachic requirement to remain standing. Sometimes a person enters the synagogue in the middle of the prayer service, and, seeing that people are sitting, he goes to sit down in his seat, not realizing that the Hazzan is reciting Kaddish. One who sees his fellow about to make this mistake should remind him that he must stand.
However, Hacham Ovadia Yosef writes that if one fears that this might embarrass his fellow, then he should not say anything. There is a minority view among the Poskim – that of the Pekudat Elazar – that one is required to remain standing during Kaddish only if the entire synagogue is standing. According to this view, if one enters the synagogue in the middle of the Kaddish, and the congregation is sitting, then he is allowed to sit. Although Halacha does not follow this opinion, it may be relied upon to avoid the risk of making one's fellow uncomfortable by pointing out his mistake. Therefore, if one has reason to fear that the person who is mistakenly sitting might feel slightly embarrassed, it is better to remain silent and not say anything.
Summary: If a person who had been standing before Kaddish begins sitting down after Kaddish began, his fellow should point out to him that Halacha requires him to remain standing, unless this would make him uncomfortable, in which case it is preferable to remain silent.