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ELRCDismissedELRC Cause (Nairobi), Memorandum of Claim filed 31 July 2013· [2018] KEELRC 372 (KLR)

Shadrack Dei Kinyili v National Cash Registers (NCK-R) [2018] KEELRC 372 (KLR)

Employment and Labour Relations Court
7 December 2018
MOMaureen Onyango
1,926 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan engineer lost his dismissal case because he sued the client company instead of the payroll agency that was actually his employer.

What this practically means

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Executive summary

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The Claimant alleged unlawful and summary dismissal by the Respondent (NSR/NCR), claiming a declaration of unlawful termination, damages, three months' salary in lieu of notice (Kshs.102,720), remaining salary of Kshs.12,326,400 and severance pay of Kshs.85,600. He testified he was employed on 1 February 2005 as a maintenance engineer after interview by the Respondent, posted to Kisumu as Western Engineer, and terminated in August 2010 without reason or notice pay. The Respondent denied ever employing him, asserting that Parley Agencies Limited, its vendor, supplied him as a resource under an employment management services arrangement. The court framed three issues: existence of an employment relationship, lawfulness of termination, and entitlement to reliefs. Examining Section 2 of the Employment Act and the parties' documentation, the court found the Claimant's payslips and leave forms were issued by Parley Agencies Limited, which invoiced the Respondent for employment management services with a 20% commission on gross salaries, and an email of 12 October 2010 announced the end of his assignment with the Respondent. Applying the behaviour-of-the-parties test from Maurice Oduor Okech v Chequered Flag Limited, the court held no employer-employee relationship existed between the parties; the termination questions became moot. The court found the Claimant sued the wrong party and should have sued Parley Agencies Limited or both entities. The claim was dismissed with each party bearing its own costs.

Key legal issues

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01

Whether an employer-employee relationship existed between the Claimant and the Respondent

Holding

No employment relationship existed; the Claimant was assigned to the Respondent by Parley Agencies Limited, which issued his payslips and leave forms and invoiced the Respondent for employment management services

Reasoning

The court examined Section 2 of the Employment Act defining contract of service, employee and employer. The documentary evidence - payslips and leave forms from Parley Agencies Limited, an invoice for employment management services listing the Claimant's deductions, and a 20% commission on gross salaries - showed Parley Agencies as employer. The email of 12 October 2010 announced the end of the Claimant's assignment, confirming secondment rather than employment.

p. 3
02

Whether the Claimant was unlawfully terminated and entitled to reliefs

Holding

The issues became moot because no employment relationship with the Respondent was established

Reasoning

Having found that the Respondent was not the Claimant's employer, the Respondent had no capacity to terminate his employment. The court held the Claimant sued the wrong party and should have sued Parley Agencies Limited or both entities. Consequently the claims for unlawful termination, damages, notice pay, outstanding salary and severance all failed.

p. 3

Legal principles established

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  • Whether a contract of service exists depends on the parties' conduct, the documentation evidencing the relationship and the mode of payment, not merely badges or training certificates
  • Distinct legal entities cannot be treated as one employer; a claimant unsure of his employer should sue both entities

Court orders

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  1. 1.The claim is dismissed
  2. 2.Each party to bear its own costs

Authorities

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Legislation

  • Employment ActSection 2 (definitions of contract of service, employee, employer)
  • Employment ActSection 45
  • Employment ActSection 41
  • Employment ActSection 49

Cases cited (4)

  • George Kamau Ndiritu & Another v Intercontinental Hotel
    [2015] eKLR
  • Francis Mwaura Gitau v Nyala Tea Estate Limited
    [2016]
  • Maurice Oduor Okech v Chequered Flag Limited
    [2013] eKLR
  • Everret Aviation Limited Vs the Kenya Revenue Authority
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (court as constituted under the ELRC Act; specific provision not cited in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Shadrack Dei Kinyili v National Cash Registers (NCK-R) [2018] KEELRC 372 (KLR)", Case Analysis (2018). ELRC Cause (Nairobi), Memorandum of Claim filed 31 July 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/372/eng@2018-12-07

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