Samson Kiprop Maluei v Kenya Commercial Bank Limited [2014] KEELRC 971 (KLR)
The bottom line
#A Kenyan employer cannot escape an unfair dismissal claim by hiding behind a foreign subsidiary where the employee never actually left its employment.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant remained an employee of the Respondent after moving to KCB Sudan Limited
The Claimant never left the Respondent's employment between his initial employment in 1992 and his termination in 2010; the transfer was an internal promotion within the Respondent's operational structures.
The appointment letters provided for probation with a possibility of reverting to the previous position and, upon confirmation, the Managers' Terms of Service Handbook and the original letter of appointment with the Respondent would apply. The certificate of service was issued by the Respondent's Head of Compensation and Benefits. These features showed continuity of the employment relationship with the Respondent notwithstanding the separate legal identity of KCB Sudan Limited.
Whether the Court had jurisdiction over the claim
Jurisdiction was a 'non issue' because the Claimant's contract and claim are governed by Kenyan labour law, the employment relationship being with the Respondent.
The Respondent argued that since the contract with KCB Sudan Limited was to be performed in South Sudan, the Labour Act, 1997 of South Sudan applied and the Court lacked jurisdiction. The Court rejected this, holding that the subsisting employment relationship was with the Respondent, a Kenyan entity, so Kenyan labour and employment law governed and the Court had jurisdiction.
Whether the principle of separate legal personality defeats the claim against the Respondent
The separate legal personality principle was well grounded but was not the real issue; the true issue was the effect of the Claimant's move to KCB South Sudan Limited.
Counsel relied on authorities on the legal autonomy of incorporated companies against holding or subsidiary companies. The Court accepted the principle but held it was not determinative, since the internal letters and certificate of service showed that the Claimant's move was a transfer within the Respondent's structures rather than a termination and fresh employment with a separate entity.
Legal principles established
#- A secondment or internal transfer within a corporate group does not sever the employment relationship with the original employer, which cannot use its internal operational structures to circumvent its obligations to its employee.
- Where the original employment relationship subsists with the Kenyan employer, the claim is governed by Kenyan labour and employment law notwithstanding that the work was performed abroad.
Court orders
#- 1.The Respondent's Notice of Motion application for striking out of the Claimant's claim is dismissed
- 2.Costs of the application are awarded to the Claimant
- Jurisdiction invoked
- Section 12 of the Industrial Court Act, 2011 and Rule 16(1) of the Industrial Court (Procedure) Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Samson Kiprop Maluei v Kenya Commercial Bank Limited [2014] KEELRC 971 (KLR)", Case Analysis (2014). Cause No 166 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/971/eng@2014-05-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.