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ELRCAllowedNot stated in judgment· [2023] KEELRC 163 (KLR)

Shah v Chadha & another (Cause E569 of 2022) [2023] KEELRC 163 (KLR)

Employment and Labour Relations Court
31 January 2023
JRJames Rika
861 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 protected a finance manager caught between feuding company directors, barring them from retaliating against her while her case proceeds.

What this practically means

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Executive summary

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The Claimant, Finance Manager of the 2nd Respondent company, filed an application dated August 15, 2022 seeking, in its live prayer, an order restraining the 2nd Respondent from intimidating, harassing, threatening, frustrating, and taking retaliatory or adverse actions against her pending hearing and determination of her Claim. The dispute arose from a corporate conflict between the company's two Co-Directors, the 1st Respondent and Pervinder Singh Chadha, subject of High Court Civil Case No E160 of 2021, in which the 1st Respondent obtained interim orders allowing her to resume duties and joint operation of bank accounts. The Claimant alleged that the 1st Respondent then witch-hunted Employees deemed loyal to the Co-Director, allegedly terminated her contract and withheld her salary. The 1st Respondent countered that salary delays affected all Employees due to Covid-19 and had since been paid, and that the Claimant undermined her instructions. Pervinder Singh Chadha supported the Claimant, asserting the 1st Respondent deliberately refused to approve her salary. The Court, applying the establishment test for interim relief, found a prima facie case with probability of success. Handwritten comments by the 1st Respondent on payment receipts, not denied, showed she had unilaterally dismissed the Claimant in November 2021 and considered her a personal Employee of her Co-Director, contradicting her Covid-19 explanation. The Court held the Claimant, a hapless Employee caught between warring Directors, merited protection and issued the restraining order against the respondents pending determination of the Claim, with costs in the cause.

Key legal issues

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01

Prima facie case for interim restraining order

Holding

Claimant established a prima facie case with probability of success warranting restraint of the respondents pending hearing of the Claim

Reasoning

The Claimant's own evidence and that of Co-Director Pervinder Singh Chadha showed harassment, alleged unilateral termination and withheld salary. The 1st Respondent's own handwritten comments on cash payment receipts, which she did not deny authoring, confirmed she had unilaterally dismissed the Claimant and treated her as a personal Employee of the Co-Director, contradicting her Covid-19 explanation.

p. 2
02

Nature of the 1st Respondent's conduct towards the Claimant

Holding

The conduct was retaliatory action by a Director against an Employee perceived as loyal to her Co-Director, not legitimate instructions met with insubordination

Reasoning

The 1st Respondent's written statements showed she had dismissed the Claimant for gross misconduct in November 2021 and objected to her salary being paid from the company account. The Court found this amounted to brandishing a director's authority over an Employee caught in the Directors' corporate strife, rather than management instructions disobeyed.

p. 2

Legal principles established

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  • An Employee caught between warring Directors of the employing company merits the protection of the Court against retaliatory or adverse action.

Court orders

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  1. 1.Pending hearing and determination of the claim, the respondents are restrained from intimidating, harassing, mishandling, abusing, threatening, frustrating and taking retaliatory or adverse action against the claimant
  2. 2.Costs in the cause
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment dispute; interim relief pending hearing of the Claim

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, "Shah v Chadha & another (Cause E569 of 2022) [2023] KEELRC 163 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/163/eng@2023-01-31

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