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ELRCPartially AllowedNot stated in the judgment text· [2021] KEELRC 236 (KLR)

Kenya Engineering Workers Union v Ashut Engineers Limited (Plastic Division) [2021] KEELRC 236 (KLR)

Employment and Labour Relations Court
18 November 2021
1,955 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 lifted orders blocking a factory redundancy, ruling the dispute was separate from an ongoing union case and couldn't bind a new employer.

What this practically means

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Executive summary

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This ruling of the Employment and Labour Relations Court at Nairobi, delivered by M. Mbaru J on 18th November 2021, determined two competing applications arising in a CBA review suit filed on 15th May 2018. The claimant union's application dated 8th December 2020 sought a temporary injunction restraining interference with the CBA and Recognition Agreements and, in the alternative, a deposit of Ksh.50,000,000 plus 15% of redundancy benefits as security, based on the CPMU report of 21st September 2020. The respondent's application dated 15th March 2021 sought review and setting aside of the orders of 8th December 2020 which had suspended the intended redundancy of 801 employees. The respondent, through Amit Shah, admitted issuing a defective redundancy notice addressed to the Minister rather than the claimant, contrary to section 40 of the Employment Act, and explained that Ashut Plastics Limited had been registered to take over the plastics business with no job losses and terminal benefits payable. The court held the single issue for determination was whether the orders of 8th December 2020 should be reviewed, varied or set aside. Relying on section 16 of the Employment and Labour Relations Court Act, 2011 and Rule 33 of the ELRC (Procedure) Rules, 2016, the court found new discovery and a new cause of action, holding that the redundancy matter was foundationally different from the CBA review suit and should form a new and separate suit. The court set aside the orders of 8th December 2020 in their entirety, allowed the respondent's application, declined to compel Ashut Plastics Limited (a separate legal entity) to issue fresh contracts on similar terms, and directed that the claimant's application and the pending CPMU report be mentioned at the registry. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether the orders of 8th December, 2020 should be reviewed, varied or set aside

Holding

Yes; they are set aside in their entirety on the basis of new discovery of the admitted defective redundancy notice and a new cause of action

Reasoning

The court has power under section 16 of the Employment and Labour Relations Court Act, 2011 read with Rule 33 of the ELRC (Procedure) Rules, 2016 to review orders where there is new discovery, mistake on the record, need for clarification, or good cause. The respondent admitted issuing a defective redundancy notice addressed to the Minister rather than the claimant, contrary to section 40 of the Employment Act. The redundancy matter constitutes a new and separate cause of action from the CBA review suit, warranting setting aside of the interim orders.

p. 3
02

Whether the court can direct Ashut Plastics Limited to issue fresh contracts on similar terms

Holding

No; the court cannot bind a separate legal entity to contract with the respondent's employees

Reasoning

Ashut Plastics Limited is a separate and different legal person from the respondent. Parties remain free to contract. Directing a third party to issue new contracts on similar terms would be a serious negation of fair labour practices. The redundancy, if re-issued in compliance with section 40 of the Employment Act, can be addressed at the shop floor level between the respondent and the union.

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03

Whether the redundancy issue forms part of the subsisting CBA review suit

Holding

No; it is a new cause of action that should form a new and separate suit

Reasoning

The suit filed on 15th May 2018 concerned the respondent's refusal to review the CBA, with twelve issues outlined. The notice of intended redundancy affecting 801 employees, issued in error, is foundationally different and separate. While the claimant is correct that the CPMU report dated 21st September 2020 must be addressed as directed on 18th December 2019, the redundancy dispute should be filed as a new and separate suit.

p. 3

Legal principles established

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  • A redundancy notice issued in error may be corrected and fresh notice issued in compliance with section 40 of the Employment Act; the court will not compel a third-party employer to contract with the employees
  • A redundancy affecting 801 employees is foundationally different from a CBA review dispute and should be filed as a new and separate suit

Court orders

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  1. 1.Orders issued on 8th December, 2020 set aside in their entirety
  2. 2.Application dated 15th March, 2021 allowed
  3. 3.Application dated 8th December, 2020 and the pending CPMU report to be mentioned on a date allocated at the registry
  4. 4.Each party to bear own costs
Jurisdiction invoked
Employment and Labour Relations Court Act, 2011 (section 16) read with Rule 33 of the Employment and Labour Relations Court (Procedure) Rules, 2016

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, "Kenya Engineering Workers Union v Ashut Engineers Limited (Plastic Division) [2021] KEELRC 236 (KLR)", Case Analysis (2021). Not stated in the judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/236/eng@2021-11-18

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