Kenya Union of Commercial Food & allied Workers & another v Choppies Enterprises Kenya Limited & 3 others [2021] KEELRC 150 (KLR)
The bottom line
#A Kenyan court confirmed that company directors cannot be held personally liable for an employer's unpaid employee dues just because two cases were joined together.
What this practically means
#Executive summary
#Key legal issues
#Threshold for review under Rule 33 of the ELRC Rules
The review was brought under Rule 33(1)(c) seeking clarification; the Court agreed only to clarify the ruling, which had unambiguously entered judgment for the 2nd Claimant (the Kisumu Claimants) in the sum of Kshs.751,617.37/=.
Rule 33(1) permits review for new and important matter, error apparent on the face of the record, clarification, or other sufficient reason. The Applicants invoked Rule 33(1)(c) seeking clarification. The Court examined the impugned ruling and found it plainly concerned the second set of Claimants from Kisumu CMELRC 408 of 2019. Since there was no doubt as to whom the ruling referred, only clarification was appropriate; the broader review prayers failed.
Whether the 2nd, 3rd and 4th Respondents are liable for the decree by virtue of consolidation
No. Consolidation did not alter the pleadings, which were against the 1st Respondent company only; the individual directors were not employers of the Claimants and lack privity of contract.
Relying on the Supreme Court in Law Society of Kenya v Centre for Human Rights & Democracy, the Court held consolidation only facilitates expeditious disposal and does not depart from the parties' pleadings. Applying Salomon v Salomon, the suit was against a limited liability company able to sue and be sued in its own name. Following Agricultural Finance Corporation v Lengetia Ltd and Chitty on Contracts on privity, the individual Respondents, being strangers to the employment contracts, cannot be held liable for debts owed to the 1st Respondent's employees.
Legal principles established
#- Consolidation of suits does not confer any undue advantage on the consolidating party or disadvantage the opposing party, nor does it alter the parties' pleadings
- A limited liability company sues and is sued in its corporate name, and its members are not liable for its debts
- Under the doctrine of privity of contract, a contract cannot impose obligations on any person who is not a party to it
Court orders
#- 1.The ruling of 5th March 2021 is clarified to refer to the 1st Claimant only
- 2.The prayers for expunging/striking out the names of the 2nd, 3rd and 4th Respondents from the proceedings are redundant and not granted
- 3.The prayers for stay of execution lapse upon delivery of the ruling
- 4.Each party shall bear its own costs of the application
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction; application under Order 45 and Order 51 of the Civil Procedure Rules, 2012, Sections 1A, 2A, 3A, 80 of the Civil Procedure Act and Article 159(2)(a) of the Constitution of Kenya, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Commercial Food & allied Workers & another v Choppies Enterprises Kenya Limited & 3 others [2021] KEELRC 150 (KLR)", Case Analysis (2021). Cause No. 861 of 2019 as consolidated with Kisumu CMELRC 408 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/150/eng@2021-12-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.