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ELRCPartially AllowedNot stated in the judgment (Memorandum of Claim filed 29th June 2016)· [2021] KEELRC 969 (KLR)

Hosea Fabians Okoth & 3 others v Executive Super Rides Limited [2021] KEELRC 969 (KLR)

Employment and Labour Relations Court
22 September 2021
NMNzioki wa Makau
1,942 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~8 min to read original · ~4 min brief

The bottom line

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Kenyan employers cannot outsource workers to another company without each employee's consent, or the transfer counts as unfair dismissal.

What this practically means

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Executive summary

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Four Claimants, formerly Cleaners employed by Executive Super Rides Limited on diverse dates from 2013 to 2015, sued for unfair and wrongful termination after the Respondent, on 29th March 2016, told them they would cease being its employees from 1st April 2016 and purported to transfer their services to Infinity Trading Company Limited under an outsourcing contract. They claimed notice pay, unpaid leave, unpaid public holidays, unpaid house allowance, damages for wrongful termination and Certificates of Service. The Respondent admitted the employment but contended that the Claimants were informed of the transition to Infinity Trading Company Limited on similar terms, absconded duties, and that their salaries were all-inclusive and it remitted NSSF contributions. The 1st Claimant testified for the Claimants; the Respondent adduced no oral evidence and filed no submissions. The court held that outsourcing must involve affected employees and obtain their individual consent, applying the parameters in Wrigley Company (East Africa) Limited v Attorney General & 2 Others; the Respondent exhibited neither the terms of the outsourcing nor staff consent, so the Claimants were unfairly terminated. However, several heads of claim failed for want of proof or limitation, including unpaid leave, public holidays and house allowance. The court entered judgment awarding each Claimant one month's notice pay and compensation equivalent to three months' salary, plus service pay for the 1st and 2nd Claimants, with interest from the date of judgment and costs of the suit.

Key legal issues

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01

Validity of outsourcing without employee consent

Holding

The purported transfer of the Claimants to Infinity Trading Company Limited without their consent and without settlement of their accrued obligations amounted to unfair termination

Reasoning

The court held that outsourcing, though lawful in modern economies, requires the involvement and individual consent of affected employees. The Respondent did not exhibit the terms of the outsourcing arrangement or evidence of staff consent. Applying the parameters in Wrigley Company (East Africa) Limited v Attorney General & 2 Others, the Claimants were not subjected to the treatment required in an outsourcing contract, so the transfer amounted to unfair termination.

p. 2
02

Compensation for unfair dismissal

Holding

Each Claimant awarded compensation equivalent to 3 months' salary notwithstanding the claim for 12 months

Reasoning

The Claimants sought the maximum 12 months' compensation under Section 49 of the Employment Act, relying on Paul Ngeno v Pyrethrum Board of Kenya. The court instead exercised discretion and awarded 3 months' salary as compensation for unlawful dismissal, alongside one month's notice pay, reflecting a measured award rather than the maximum sought.

p. 3

Legal principles established

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  • Outsourcing of employees is of no legal effect without the affected employees' individual consent, and an employer must settle outstanding obligations before an outsourcing arrangement takes effect

Court orders

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  1. 1.Judgment for the 1st Claimant – Hosea Fabians Okoth: one month's salary in lieu of notice Kshs. 18,000; service pay Kshs. 2,700; compensation for unlawful dismissal equivalent to 3 months' salary Kshs. 54,000 – total Kshs. 74,700
  2. 2.Judgment for the 2nd Claimant – Emmanuel Omondi: one month's salary in lieu of notice Kshs. 18,000; service pay Kshs. 2,700; compensation for unlawful dismissal equivalent to 3 months' salary Kshs. 54,000 – total Kshs. 74,700
  3. 3.Judgment for the 3rd Claimant – Wycliffe Lusangari: one month's salary in lieu of notice Kshs. 18,000; compensation for unlawful dismissal equivalent to 3 months' salary Kshs. 54,000 – total Kshs. 72,000
  4. 4.Judgment for the 4th Claimant – Wycliffe Liwali: one month's salary in lieu of notice Kshs. 23,000; compensation for unlawful dismissal equivalent to 3 months' salary Kshs. 69,000 – total Kshs. 92,000
  5. 5.Interest at court rates on the awards from the date of judgment till payment in full
  6. 6.Costs of the suit to the Claimants

Authorities

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Legislation

  • Employment ActSection 43
  • Employment ActSection 36 as read with Section 35
  • Employment ActSection 28
  • Employment ActSection 35(5)
  • Employment ActSections 10 and 74
  • Employment ActSection 49

Cases cited (4)

  • Stanely Mwangi Gachungu & Another v Barclays Bank of Kenya Ltd
    [2019] eKLR
  • Donald Odeke v Fidelity Security Ltd
    [2011] eKLR
  • Paul Ngeno v Pyrethrum Board of Kenya
    [2013] eKLR
  • Wrigley Company (East Africa) Limited v Attorney General & 2 Others & Another
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act reliefs invoked: Sections 10, 28, 35, 36, 43, 49, 74)

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, "Hosea Fabians Okoth & 3 others v Executive Super Rides Limited [2021] KEELRC 969 (KLR)", Case Analysis (2021). Not stated in the judgment (Memorandum of Claim filed 29th June 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/969/eng@2021-09-22

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