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ELRCOtherApplication dated 20.7.2016 in the Petition (ELRC)· [2017] KEELRC 1842 (KLR)

Nicholas Bishop v AAR Healthcare Holdings Limited [2017] KEELRC 1842 (KLR)

Employment and Labour Relations Court
25 January 2017
2,496 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Applicant, Nicholas Bishop, applied by Notice of Motion dated 20.7.2016 under Section 5(1) of the Judicature Act and Order 52 Rule 3 of the English Rules of the Supreme Court (as incorporated by the Civil Procedure (Amendment No. 2) Rules, 2012) seeking committal to civil jail of the three Directors of AAR Healthcare Holdings Limited, a fine against the Respondent with attachment of its property, and orders to purge contempt, alleging breach of conservatory orders issued on 22.6.2016 restraining termination or alteration of his employment as Group Chief Financial Officer and directing payment of his salaries, benefits and allowances. He alleged that on 4.7.2016 the Respondent, through AMSCO, paid him notice pay of EUR 26,228.19 in lieu of terminating his employment, and failed to pay salaries for May and June 2016. The Respondent, through a replying affidavit of its Group CEO, opposed the application, denying any employment relationship with the Applicant, asserting he was engaged under a Maximum Duration Agreement with AMSCO which had terminated his engagement on 4.5.2016, and contending that the orders lacked a penal notice and were based on non-disclosure. The court framed three issues. It held, first, that an employment relationship did exist, evidenced by the appointment letter of 11.1.2015 signed by the Respondent's Group Managing Director and a staff memo of 20.3.2015. Secondly, although the Respondents breached the contract terms, the order of 22.6.2016 was only served on 13.7.2016, after the acts complained of, so the breach did not amount to deliberate contempt. The court accordingly declined to find the Respondents and their Directors guilty of contempt, leaving the alleged breaches to be ventilated in the main claim. Judgment was delivered in open court on 25 January 2017 by Lady Justice Hellen Wasilwa.

Key legal issues

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01

Whether an employment relationship existed between the Applicant and the Respondent

Holding

Yes – the appointment letter dated 11.1.2015 signed by the Respondent's Group Managing Director, and a staff memo dated 20.3.2015, establish an employment relationship between the Applicant and AAR Healthcare Holdings Limited.

Reasoning

The court read the appointment letter, which appointed the Claimant Group Chief Finance Officer of AAR reporting to the General Managing Director, with a fixed term running to 28.2.2018 and termination clauses binding AAR directly. The fact that the contract was to be administered through AMSCO and that AMSCO paid him did not displace the employment relationship with the Respondent.

p. 4
02

Whether the Respondents and their Directors were guilty of contempt of the orders of 22.6.2016

Holding

No – although the Respondents breached the terms of the contract/conservatory orders by procuring payment of notice pay and failing to pay salaries, the order had only been served on 13.7.2016, after the acts complained of, so the breach was not deliberate contempt.

Reasoning

The court accepted service on the Respondents but found that the actual date of service (13.7.2016) fell after the payment of EUR 26,228.19 on 4.7.2016 and after the acts said to alter the employment terms. Absent service before the breach, the court declined to punish for contempt, leaving the alleged breaches to be canvassed in the main claim.

p. 5
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What orders should issue in the circumstances

Holding

The contempt application was refused; the Applicant was left to pursue the alleged breaches in the main claim.

Reasoning

Since the ingredients of deliberate disobedience of a served order were not established, committal, fines and purging orders were inappropriate. The court preserved the Applicant's remedies on the contract for the substantive petition.

p. 5

Legal principles established

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  • A party cannot be held guilty of contempt of a court order that had not been served on it at the time of the alleged breach.
  • An appointment letter signed by the company's Group Managing Director and communicated to staff evidences an employment relationship notwithstanding third-party payroll arrangements.

Court orders

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  1. 1.Application for contempt dismissed – the Respondents and their Directors were not found guilty of contempt of court.
  2. 2.Leave granted to the Applicant to articulate the alleged breaches of contract in the main claim.
  3. 3.Service of the application on the Directors through Mboya Wangong'u & Waiyaki Advocates – overtaken by dismissal of the application.

Authorities

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Legislation

  • Judicature ActSection 5(1)
  • Civil Procedure (Amendment No. 2) Rules, 2012Rule 81.4 of Part 81
  • Rules of the Supreme Court of England and WalesOrder 52 Rule 3
  • Constitution of Kenya, 2010Articles 22 and 162(3)
Jurisdiction invoked
Section 5(1) of the Judicature Act (Cap 8) incorporating Order 52 Rule 3 of the Rules of the Supreme Court of England and Wales as modified by the Civil Procedure (Amendment No. 2) Rules, 2012; Articles 22 and 162(3) of the Constitution

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, "Nicholas Bishop v AAR Healthcare Holdings Limited [2017] KEELRC 1842 (KLR)", Case Analysis (2017). Application dated 20.7.2016 in the Petition (ELRC). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1842/eng@2017-01-25

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