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ELRCAllowedNot stated in the judgment as provided· [2018] KEELRC 653 (KLR)

Nicholas Njenga Mwangi v Advent Valuers Limited [2018] KEELRC 653 (KLR)

Employment and Labour Relations Court
2 November 2018
RSRadido Stephen
371 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court allowed a party it deemed merely an agent to bring the company actually funding employees' wages into an employment dispute.

What this practically means

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Executive summary

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This was a ruling of the Employment and Labour Relations Court at Nairobi on an application dated 30 April 2018 by the Respondent seeking leave to serve a third party notice upon Virgin Estate Limited, a company incorporated in Kenya. Although served, the Claimant neither responded to the application nor attended court when submissions were made on 10 July 2018. The Respondent supported the application on the ground that it had entered into a Management Agreement with the proposed third party under which it had authority to hire and control employees on the third party's behalf; it described itself as an agent of the proposed third party and paid the Claimant's salaries from an account belonging to the third party until the relationship was terminated on 29 June 2016. A copy of the Management Agreement was annexed. The Court, per Radido Stephen, Judge, examined clauses 2.3.1, 2.3.2, 3.1 and 4.4 of the Agreement and found that the proposed third party provided the funds for paying employees' wages while the Respondent appeared to be the employer. Applying the definition of employer in section 2 of the Employment Act, 2007, the Court allowed the application and issued directions: third party notice to be served within 15 days failing which the leave lapses; the third party at liberty to file responses within 21 days of service; witness statements and documents to be exchanged within 21 days of service; and agreed issues to be filed within 45 days after filing of the third party response.

Key legal issues

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01

Whether leave to issue a third party notice should issue where the applicant claims to be an agent of the proposed third party

Holding

The application was allowed; the Court found on the Management Agreement and the Employment Act definition of employer that the proposed third party funded wages while the Respondent appeared to be the employer, justifying joinder.

Reasoning

The Court examined clauses 2.3.1, 2.3.2, 3.1 and 4.4 of the Management Agreement, under which the Respondent hired and controlled employees on behalf of the proposed third party and paid salaries from the third party's account. Reading these clauses with the statutory definition of employer in section 2 of the Employment Act, the Court concluded the interests of the proposed third party were sufficiently connected to warrant joinder and granted leave with timelines for service and responses.

p. 1

Legal principles established

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  • Where a management agreement shows the proposed third party funded employee wages while the respondent exercised employer control, the respondent may join the third party to the employment dispute.

Court orders

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  1. 1.Leave granted to serve a third party notice upon Virgin Estate Limited
  2. 2.Third party notice to be served within 15 days, failure to which the leave lapses
  3. 3.Third party at liberty to file any appropriate responses within 21 days of service of third party notice
  4. 4.Witness statements and documents to be filed and exchanged within 21 days of service of third party notice
  5. 5.Agreed issues to be filed within 45 days after filing of third party response

Authorities

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Legislation

  • Employment Act, 2007section 2 (definition of employer)
Jurisdiction invoked
Not expressly stated in the judgment

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 Njenga Mwangi v Advent Valuers Limited [2018] KEELRC 653 (KLR)", Case Analysis (2018). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/653/eng@2018-11-02

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