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ELRCPartially AllowedELRC Cause No. 380 of 2011 (originally Industrial Court at Nairobi, transferred to Mombasa)· [2019] KEELRC 1868 (KLR)

David Kabori Rimberia v Summit Cove Lines Company Limited & another [2019] KEELRC 1868 (KLR)

Employment and Labour Relations Court
28 March 2019
2,948 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded a former project advisor Kshs.700,000 as a lump sum, finding his mixed business-employment relationship defied standard redundancy rules.

What this practically means

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Executive summary

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The Claimant, engaged as Lead Project Advisor/Human Resources and Administration Manager, sued Summit Cove Lines Limited and its Managing Director claiming salary arrears, leave pay, notice pay, severance pay, subsistence allowance for a Zambia/Tanzania maize trip, service pay and damages for unfair termination, alleging his contract was terminated in October 2011 without notice and without compliance with Section 40 of the Employment Act on redundancy. The Respondents denied a conventional employment obligation, asserting the parking-fee collection partnership with the Municipal Council of Mombasa collapsed after the High Court in Constitutional Petition No. 6 of 2011 (J.B. Ojwang', J) declared the public-private partnership unlawful, that the maize venture was a profit-sharing arrangement rather than employment, and that the 2nd Respondent was not personally liable. The Claim had earlier been dismissed for non-attendance, the file went missing, was reconstructed, and was reinstated by a ruling of 26th June 2015. The Court found an employment relationship existed but was a multifaceted blend of friendship, family, business advisory and employment ties. It held the termination was substantially justified by the judicial destruction of the business, that redundancy procedures were impracticable, and that the benefits could not be ascertained with exactitude. Taking into account the pleadings, the unique relationship and failed settlement negotiations, the Court ordered a global payment of Kshs.700,000 in full and final settlement, with no order on costs or interest.

Key legal issues

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01

Existence and nature of the employment relationship

Holding

The Court found an employment relationship existed but was not conventional, being entangled with friendship, family and profit-sharing business dealings

Reasoning

The Claimant was engaged to lead the parking ticketing project and recruited staff, establishing employment. However, his participation in the maize venture as a profit-sharing confidant of the 2nd Respondent, travelling with the 2nd Respondent's relatives, showed the relationship was a multifaceted association rather than a conventional employer-employee relationship governed strictly by the Employment Act.

p. 4
02

Fairness of termination and redundancy under Section 40 of the Employment Act

Holding

Termination was substantially justified by the collapse of the project following the High Court judgment; the Court held it impracticable to demand redundancy procedures

Reasoning

The High Court in Constitutional Petition No. 6 of 2011 declared the public-private partnership unlawful, ending the business over which the Claimant was engaged. The Claimant himself advised and executed the termination of other staff. The Court found the employer could not be expected to sustain the relationship or invoke Section 40 where the project had been judicially frustrated.

p. 4
03

Quantum of terminal benefits

Holding

Specific pleaded heads were replaced with a global award of Kshs.700,000 in full and final settlement

Reasoning

Salaries were frequently adjusted and inconsistently paid; the Claimant accepted reduced salary out of understanding of the circumstances. Given the complexity of the relationship and the parties' failed settlement negotiations (Claimant proposing Kshs.4,708,167 and Kshs.3,094,000; Respondent offering Kshs.200,000), the Court fixed a global sum taking into account pleadings, the relationship and the proposals.

p. 4

Legal principles established

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  • Where the business over which an employee was engaged collapses through no fault of the employer, the employment relationship cannot be sustained and the employer is not bound to invoke redundancy procedures
  • Where a relationship is a multifaceted mix of family, friendship, business and employment, and benefits were never clearly defined or consistently paid, the Court may order a global sum in full and final settlement

Court orders

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  1. 1.The Respondents shall pay to the Claimant a global sum of Kshs.700,000 in full and final settlement of the Claim
  2. 2.No order on the costs
  3. 3.No order on interest

Authorities

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Legislation

  • Employment Act 2007Section 40

Cases cited (1)

  • Constitutional Petition Number 6 of 2011 - Kenya Transport Association v Municipal Council of Mombasa and Summit Cove Lines Limited
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (claim initiated at the Industrial Court)

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, "David Kabori Rimberia v Summit Cove Lines Company Limited & another [2019] KEELRC 1868 (KLR)", Case Analysis (2019). ELRC Cause No. 380 of 2011 (originally Industrial Court at Nairobi, transferred to Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1868/eng@2019-03-28

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