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ELRCDismissedCause Number 833 (N) of 2009· [2013] KEELRC 141 (KLR)

Kenya Scientific, Research International Technical And Allied Institutions Workers’ Union v Flame Tree Brands Limited & 2 others [2013] KEELRC 141 (KLR)

Industrial Court at Nairobi
27 September 2013
JRJames Rika
1,627 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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A company's name change in Kenya does not end employment contracts, and workers who desert their jobs over a rebranding lose their claims.

What this practically means

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Executive summary

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The Claimant Union, on behalf of 10 Grievants, claimed that their positions were declared redundant after their employer, Flame Tree Brands Limited, changed its registration to Flame Tree Africa Limited in September 2008, and sought redundancy dues, reinstatement, or alternatively 12 months' salary compensation per Grievant. The Respondents conceded the reorganization but asserted it was merely a change of name with employees continuing their employment uninterrupted; they contended the Grievants went on an illegal strike, deserted their positions, and that all terminal benefits due were subsequently paid at the Ministry of Labour. The Union called one Grievant, Jackson Mulinge Musyoki, who testified that employees were told by the Production Manager they would receive terminal benefits after the name change and were later denied entry to the workplace on 11th May 2009. The Respondents called Nicodemus Kakai and Caroline Wambui, who confirmed there was no letter transferring or informing employees of the change, but that employees continued working and some went on strike. The Court found that the change from Flame Tree Brands Limited to Flame Tree Africa Limited was a mere rebranding with no change of business ownership, management or operations, and thus no legal effect on the employees' contracts. There was no redundancy situation. The Grievants misunderstood the legal effect of the rebranding, treated their contracts as terminated without prompting, went on strike, and deserted their employment. The Court dismissed the Claim with no order as to costs and directed that the employees may collect their terminal benefits from the Ministry of Labour.

Key legal issues

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01

Whether a change of business name constitutes redundancy or termination of employment

Holding

It does not; a rebranding exercise with no change in ownership or business operations has no legal effect on employees' contracts and continuity of service is uninterrupted

Reasoning

The Court found the employer remained in the same business, same premises and same management after rebranding. No roles were phased out, no new roles introduced and no employee notified of redundancy. Employees continued earning their old salaries, so they wrongly assumed their contracts had ended and their demand for terminal dues was based on a misunderstanding of the legal effect of the rebranding.

p. 3
02

Whether the Grievants were dismissed or deserted

Holding

The Grievants deserted; they unilaterally considered their contracts terminated and stopped working, and no position was declared redundant

Reasoning

The Court was satisfied from the evidence of the Respondents' witnesses Kakai and Wambui that no employee was prejudiced by the rebranding. The Grievants, without prompting by the Respondents, considered their contracts terminated, went on strike and persistently refused to work, thereby deserting their positions and contributing solely to their own exit from employment.

p. 3

Legal principles established

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  • A mere change of business name, without a change in business ownership, does not affect the continuity of employees' contracts of employment
  • A change of name amounting to a rebranding exercise has no legal effect on the status of employees
  • Employees who unilaterally treat their contracts as terminated and desert employment cannot claim redundancy dues or reinstatement

Court orders

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  1. 1.The Claim is dismissed with no order on the costs
  2. 2.The employees may collect their terminal benefits from the Ministry of Labour

Authorities

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Legislation

  • Companies ActCap 486 Laws of Kenya
Jurisdiction invoked
Refered dispute under the Labour Relations Act after conciliation (certificate of disagreement issued by the Ministry of Labour); Employment and Labour Relations Court jurisdiction over employment disputes

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (8)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenya Scientific, Research International Technical And Allied Institutions Workers’ Union v Flame Tree Brands Limited & 2 others [2013] KEELRC 141 (KLR)", Case Analysis (2013). Cause Number 833 (N) of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/141/eng@2013-09-27

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.