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ELRCPartially AllowedNot stated in judgment· [2019] KEELRC 1381 (KLR)

Patrick Sau Mutemi v Kenya Meat Commission [2019] KEELRC 1381 (KLR)

Employment and Labour Relations Court
14 June 2019
1,711 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed it can hear fraud and staff-housing rent disputes arising from employment, allowing an employer to amend its defence to add them.

What this practically means

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Executive summary

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The Respondent filed a Notice of Motion on 13th July 2018 seeking leave to amend its Response to the Statement of Claim to introduce a counter-claim against the Claimant, a former employee. The proposed amendments concerned (1) money had and received by the Claimant - following an audit which allegedly revealed that the Claimant had overridden controls and caused Kshs.3,078,364 to be withdrawn for personal gain - and (2) accumulated rent arrears for institutional housing provided within the employment relationship. The Respondent relied on section 26 of the Limitations of Actions Act (fraud discovery rule) and authorities on the court's power to allow amendments at any stage. The Claimant opposed, arguing that rent arrears belong to the Magistrate's Court, that fraud is a criminal matter outside the ELRC's jurisdiction, and that the fraud claim was time barred since the alleged fraud occurred in August 2012. The Court, per Maureen Onyango J, framed the main issue as whether leave to amend should be granted. Applying Rule 14(6) of the ELRC Rules, Order 8 Rule 3(2) of the Civil Procedure Rules, and the principles in Institute for Social Accountability and Abdirahman Mohamed Abdile, the Court held that rent for institutional housing falls within its jurisdiction under section 31 of the Employment Act, that fraud arising from employment is within its jurisdiction under section 12 of the ELRC Act Act, and that the amendments would not prejudice the Claimant, who retains a right to reply. The application was allowed: the Respondent granted 14 days to amend its Response, and the Claimant a corresponding 14 days to reply after service. Costs were to be in the cause.

Key legal issues

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01

Whether leave to amend the Response should be granted

Holding

Leave granted; amendments go to the crux of the dispute and will not prejudice the Claimant

Reasoning

The Court applied Rule 14(6) of the ELRC Rules and Order 8 Rule 3(2) of the Civil Procedure Rules, holding that amendments should be freely allowed to determine the real issues between the parties. The Claimant retains the right to reply to the counter-claim, so no prejudice arises. The amendments concern matters arising from the employment relationship and its separation.

p. 2
02

Jurisdiction over rent arrears for institutional housing

Holding

Occupation of institutional houses and requirement to pay rent falls within the Court's jurisdiction regarding housing under section 31 of the Employment Act

Reasoning

The Court held that housing was provided to the Claimant within the employment relationship, making any dispute over rent arrears a pure employment dispute within the Court's jurisdiction. The housing issue is also contentious, as the Claimant alleges his belongings are detained in the house.

p. 2
03

Whether the fraud claim is time barred

Holding

Not barred at the amendment stage; Section 26 of the Limitation of Actions Act applies where fraud is concealed, and the amendment introduces claims with a bearing on the plaintiff's claim

Reasoning

The Court noted the Respondent's submission that under Section 26 of the Limitation of Actions Act, limitation does not run until discovery of fraud. Relying on Abdirahman Mohamed Abdile, it held that amendment does not validate a claim that has none, but the other party may raise objections; the facts giving rise to the counter-claim have a bearing on the plaintiff's claim and investigations had been ongoing since 2013.

p. 2
04

Jurisdiction over fraud claims in employment disputes

Holding

The Court has jurisdiction under Section 12 of the ELRC Act to determine disputes arising out of employment including fraudulent activities

Reasoning

The Court rejected the Claimant's contention that fraud is exclusively a criminal matter for other courts, holding that disputes arising from the employment relationship, including fraudulent activities and rent arrears for premises related to employment, fall within its statutory jurisdiction under Section 12 of the ELRC Act.

p. 3

Legal principles established

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  • A party may amend pleadings after the close of pleadings only with leave of the Court, and the other party has a corresponding right to amend
  • The object of amendment of pleadings is to enable litigation to be conducted on the true state of the facts rather than on a false hypothesis of facts already pleaded

Court orders

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  1. 1.The application is allowed and the respondent granted leave to amend the response within 14 days
  2. 2.The claimant will have corresponding leave to file response to amended pleadings within 14 days of service

Authorities

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Legislation

  • Limitations of Actions ActSection 26
  • Employment and Labour Relations Court (Procedure) RulesRule 14(6)
  • Civil Procedure RulesOrder 8 Rule 3(2)
  • Constitution of KenyaArticle 165
  • Employment and Labour Relations Court ActSection 12
  • Employment ActSection 31

Cases cited (6)

  • Ramco Investment Limited v Nairobi City Water & Sewerage Company
    [2017] eKLR
  • Kuloba v Oduol
    HCCC No. 1 of 2000
  • Abdullahi Ali Mohammed v Kenya Ports Authority & Another
    [2015]
  • Owners of the Motor Vessel "Lillian S"-v-Caltex Oil (Kenya) Limited
    [1989] KLR 1
  • Institute For Social Accountability & Another v Parliament of Kenya & 3 others
    [2014] eKLR
  • Abdirahman Mohamed Abdile v Ahmed Rashid Haji Mohamed & 3 others
    [2012] eKLR
Jurisdiction invoked
Article 165 of the Constitution; Section 12 of the Employment and Labour Relations Court Act

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, "Patrick Sau Mutemi v Kenya Meat Commission [2019] KEELRC 1381 (KLR)", Case Analysis (2019). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1381/eng@2019-06-14

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