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ELRCOtherCause (number not stated in judgment; suit filed 15 June 2017)· [2020] KEELRC 300 (KLR)

In Touch Sports Limited v Kenya Rugby Union [2020] KEELRC 300 (KLR)

Employment and Labour Relations Court
29 October 2020
RSRadido Stephen
1,946 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Employment Court ruled it cannot hear a sports agent's fee dispute against Kenya Rugby Union because their relationship was commercial, not employment.

What this practically means

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Executive summary

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In Touch Sports Ltd, a sports management company, sued the Kenya Rugby Union in the Employment and Labour Relations Court on 15 June 2017 claiming management fees arising from its successful negotiation, as agent, of the October 2013 employment contracts between the Union and three South African coaches. The parties consented to arbitration and the arbitrator, Mr Arthur K. Igeria, found for the Claimant. The Claimant then applied by Chamber Summons dated 29 January 2020 for the award to be adopted as judgment with a decree for USD 37,125 plus interest and costs. The Respondent filed a preliminary objection that the Court lacked jurisdiction over commercial disputes, and a motion to stay proceedings and set aside the award. The Court directed that all applications be heard together. Examining jurisdiction first as a foundational question, the Court held that under section 12 of the ELRC Act and section 87 of the Employment Act its jurisdiction is confined to employment and labour relations disputes. The Claimant and the Union had no employer/employee relationship and were not a trade union and employer; the Claimant merely negotiated recruitment and was owed management fees under a separate commercial contract, and the service contracts imposed no obligations on it. The multi-party employment argument based on non-standard forms of employment also failed. Following National Bank of Kenya Ltd v Leonard Gethoi Kamweti, the Court found it had no jurisdiction. Rather than strike out the suit as a nullity (the Phoenix approach) or transfer it (the Mugendi approach), the Court chose to transfer the Cause to the High Court for further proceedings, with costs in the cause. Judgment delivered on 29 October 2020 by Radido Stephen, J.

Key legal issues

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01

Whether the Employment and Labour Relations Court has jurisdiction over a claim by a sports management agent for management fees from a rugby union

Holding

The Court lacks jurisdiction; the relationship was neither employer/employee nor between a trade union and employer, and was not founded on a contract of service.

Reasoning

Section 12 of the ELRC Act confines the Court's jurisdiction to specified employment and labour disputes, and section 87 of the Employment Act to disputes under a contract of service. The Claimant merely negotiated the recruitment of three coaches as agent and was entitled to management fees; it did not manage the coaches or share in their service contracts. The service contracts imposed no rights or obligations on the Claimant, so the multi-party employment argument failed.

p. 3
02

What order a court without jurisdiction should make

Holding

Rather than striking out the suit as a nullity, the Court transferred the Cause to the High Court for further proceedings.

Reasoning

The Court of Appeal has taken inconsistent approaches: Phoenix E.A. Assurance treats suits filed without jurisdiction as nullities not transferable, while Mugendi endorses transfer to the court with jurisdiction in the interests of justice. Following the latter approach, the Court opted to transfer the Cause to the High Court rather than down its pen.

p. 4

Legal principles established

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  • The ELRC's jurisdiction is confined to employment and labour relations disputes; a claim founded on a contract for management fees between an agent and a sporting body is not a dispute between employer and employee under a contract of service.
  • A reference to payment of a management or signing fee does not convert a relationship into a contract of service.

Court orders

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  1. 1.The Cause is transferred to the High Court for further proceedings
  2. 2.Costs in the cause

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)
  • Employment and Labour Relations Court Actsection 12
  • Employment Actsections 2, 87
  • Labour Relations Actsection 2
  • Work Injury Benefits Act

Cases cited (3)

  • National Bank of Kenya Ltd v Leonard Gethoi Kamweti
    (2019) eKLR
  • Phoenix E.A. Assurance Company Ltd v S.M. Thiga t/a Newspaper Service
    (2019) eKLR
  • Daniel N Mugendi v Kenyatta University & 3 Ors
    (2013) eKLR
Jurisdiction invoked
Article 162(2) of the Constitution; section 12 of the Employment and Labour Relations Court Act; section 87 of the Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "In Touch Sports Limited v Kenya Rugby Union [2020] KEELRC 300 (KLR)", Case Analysis (2020). Cause (number not stated in judgment; suit filed 15 June 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/300/eng@2020-10-29

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