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ELRCOtherCause No 611 of 2019· [2023] KEELRC 1839 (KLR)

Kilonzo v Avacare (K) Limited & 2 others; Pharmaceutical Society of Kenya & another (Interested Parties) (Cause 611 of 2019) [2023] KEELRC 1839 (KLR)

Employment and Labour Relations Court
13 July 2023
1,520 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed you cannot sue company directors personally for workplace disputes—the company that employed you is the proper defendant.

What this practically means

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Executive summary

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The Claimant was employed by the 1st Respondent under a one-year fixed-term contract running from July 30, 2018 to July 30, 2019, which was terminated prematurely on January 17, 2019. She also sued the 2nd and 3rd Respondents, the Country Head and Directors of the 1st Respondent, alleging verbal abuses, threats, discriminatory treatment and emotional anguish, while conceding they were not her employers. The 2nd and 3rd Respondents applied by notice dated December 14, 2022 to have their names struck out, contending they had no employment relation with the Claimant and that the ELRC therefore lacked jurisdiction over the claim against them. The Claimant and 1st Respondent opposed, arguing the two were agents of the 1st Respondent and thus within the statutory definition of 'employer'; the 1st Respondent disclaimed liability for the directors' excesses. The court held that directors are agents of a disclosed principal and bear no personal liability for acts done in the company's name; the statutory inclusion of agents within 'employer' targets only cases of undisclosed principals. Since the 1st Respondent was a disclosed principal and known employer, no employer-employee relation existed between the Claimant and the 2nd and 3rd Respondents, depriving the ELRC of jurisdiction; any tort claim against the directors lay in the Magistrate's Court or High Court. The court struck out the names of the 2nd and 3rd Respondents and awarded costs of the application to them.

Key legal issues

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01

Liability of directors as agents of a disclosed principal in employment disputes

Holding

Directors of a company acting as agents of a disclosed principal bear no personal liability for acts done for and in the company's name; a suit against them personally is misconceived.

Reasoning

Directors stand in the position of agents of the company, and their acts are treated as the acts of the company. Where the principal is disclosed, an agent cannot be sued for acts done on the principal's behalf; only an agent of an undisclosed principal may be sued as if he were the principal. Privity of contract also precludes suits against non-parties to the contract. Since the Claimant knew of the 1st Respondent's involvement, the 1st Respondent was the disclosed principal and proper employer.

p. 3
02

Scope of the definition of 'employer' under section 2 of the Employment Act

Holding

The inclusion of 'agent, foreman, manager or factor' in the definition of 'employer' targets scenarios where such persons hold themselves out as employers of an undisclosed employer; it does not expose agents of a disclosed employer to suit.

Reasoning

The court harmonised the statutory definition with general agency and privity principles. The expansion of 'employer' is meant to address cases of undisclosed principals, where agents, foremen or managers may be sued as if they were employers. It does not depart from general contract and agency law, so agents of a known, disclosed employer are not the claimant's employers for jurisdictional purposes.

p. 3
03

Jurisdiction of the ELRC over non-employer parties

Holding

Absent an employer-employee or labour relation between the Claimant and the 2nd and 3rd Respondents, the ELRC lacks jurisdiction over the claim against them.

Reasoning

Relying on the Court of Appeal's decision in National Social Security Fund Board of Trustees v Kenya Tea Growers Association, the court held that ELRC jurisdiction is confined to disputes stemming from employer-employee or labour relations. Any claim against directors for excesses beyond their agency would be a tort claim by an aggrieved party against a tortfeasor, cognizable in the Magistrate's Court or High Court, not the ELRC.

p. 3

Legal principles established

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  • An agent of a disclosed principal cannot be sued directly in respect of transactions undertaken in the name and on behalf of the principal; this applies equally to employment contracts under the Employment Act, 2007.
  • The ELRC's jurisdiction requires an employer-employee or labour relation between the disputants.

Court orders

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  1. 1.The names of the 2nd and 3rd Respondents struck out from the record of the case
  2. 2.Costs of the application granted to the 2nd and 3rd Respondents

Authorities

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Legislation

  • Employment Act, 2007section 2 (definition of 'employer')

Cases cited (3)

  • Valentine Opiyo & another v Masline Adhiambo T/A Ellyams Enterprises
    [2014] eKLR
  • City Council of Nairobi v Wilfred Kamau Githua t/a Githua Associates & another
    [2016] eKLR
  • National Social Security Fund Board of Trustees v Kenya Tea Growers Association & 14 others
    (Civil Appeal 656 of 2022) [2023] KECA 80 (KLR)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution in respect of employment and labour relations; Employment Act, 2007, section 2 (definition of employer)

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, "Kilonzo v Avacare (K) Limited & 2 others; Pharmaceutical Society of Kenya & another (Interested Parties) (Cause 611 of 2019) [2023] KEELRC 1839 (KLR)", Case Analysis (2023). Cause No 611 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1839/eng@2023-07-13

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