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ELRCPartially AllowedNot stated in the judgment as provided· [2015] KEELRC 490 (KLR)

Lilian Agola Wood v Marketing Communication Limited [2015] KEELRC 490 (KLR)

Industrial Court (Employment and Labour Relations Court)
2 October 2015
ANAbuodha J. N.
1,194 words in judgment
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The bottom line

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A Kenyan employment court ordered a company facing closure to deposit Kshs 1.34 million as security, protecting an employee's unpaid salary claim before judgment.

What this practically means

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Executive summary

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By a Notice of Motion dated 16th February 2015, the claimant sought an order compelling the respondent company to deposit Kshs.1,339,219.19 in court as security, together with a Mareva injunction restraining the disposal of its assets, pending determination of a claim for unpaid salary arrears. The claimant resigned on 16th July 2014 and alleged the company owed her salary arrears which remained unpaid despite demand. She learned through a letter dated 15th January 2015 to an employee that the respondent was shutting down its Kenyan operations by 31st January 2015 and was disposing of its assets to evade attachment. Interim orders restraining voluntary winding up had already been granted ex-parte on 22nd January 2015 by Nzioki Wa Makau J. The respondent opposed, arguing the application was an abuse of process, that no decree existed to secure, that the cited section 12 of the Labour Institutions Act had been repealed, and that the Civil Procedure Act recognised only security for decree and security for costs, neither of which was sought as framed. The Court grounded its jurisdiction in Article 159(1) of the Constitution and section 12(2) of the Industrial Court Act, holding that it may secure its judgment where a respondent is likely to go out of jurisdiction or dissipate assets to defeat a judgment. Noting the salary arrears were earned and the respondent had notified staff of closure, the Court found this a proper case for security. It ordered the respondent to deposit Kshs.1,339,219/= within 30 days, failing which execution to issue, and directed the matter be heard on priority basis. Judgment delivered by Abuodha J. N. on 2nd October 2015 at Nairobi.

Key legal issues

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01

Whether the Court can order deposit of security for a decree in an employment claim before judgment

Holding

Yes - the Court, guided by Article 159(1) and exercising discretion under section 12(2) of the Industrial Court Act, may order a respondent to deposit the claimed amount as security where there is a demonstrated risk of asset dissipation or going out of jurisdiction.

Reasoning

The Court derived its jurisdiction from the Constitution and the Industrial Court Act. Article 159(1) requires justice without undue regard to procedural technicalities. The respondent had, by letter dated 15th January 2015, notified staff that it would shut down operations by 31st January 2015 and was disposing of assets. The claim was for earned salary arrears with no reason advanced why they could not be paid, so this was a proper case for security.

p. 3
02

Whether the application was defeated by reliance on a repealed section of the Labour Institutions Act

Holding

No - the Court treated the application as an exercise of its inherent discretion under the Industrial Court Act rather than dismissing it on the technical ground of a repealed citation.

Reasoning

The respondent argued that section 12 of the Labour Institutions Act under which the application was purportedly brought had been repealed. The Court did not dismiss the application on this basis, instead grounding its jurisdiction in Article 159(1) of the Constitution and section 12(2) of the Industrial Court Act, and declining to be bound by procedural technicalities.

p. 2

Legal principles established

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  • The Court has power, in appropriate cases, to order security to secure its judgment where the respondent is likely to go out of jurisdiction or dissipate its assets to defeat a judgment.

Court orders

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  1. 1.The respondent to deposit in Court the sum of Kshs.1,339,219/= within 30 days of the order, as security for a decree the Court might ultimately issue
  2. 2.In default of the deposit, execution to issue
  3. 3.The matter to be heard on a priority basis

Authorities

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Legislation

  • Constitution of KenyaArticle 159(1)
  • Industrial Court Actsection 12(2)
  • Labour Institutions Actsection 12
  • Civil Procedure ActOrder 46 rule 6

Cases cited (3)

  • Jimmy R. Kavilu & 14 Others v. Stanbic Bank Ltd & 8 Others
    (2008) eKLR
  • Robin Momanyi v. CMC Motor Group Ltd
    (2014) eKLR
  • Absalom Ngilimani & 21 Others v. Rift Valley Textiles Ltd (In Receivership)
    (2001) eKLR
Jurisdiction invoked
Constitution of Kenya, Article 159(1) and the Industrial Court Act, section 12(2)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Lilian Agola Wood v Marketing Communication Limited [2015] KEELRC 490 (KLR)", Case Analysis (2015). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/490/eng@2015-10-02

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