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ELRCStruck OutNot stated in judgment· [2023] KEELRC 1841 (KLR)

Adoyo & 6 others v De La Rue Currency & Security Limited (Cause E1051 of 2021) [2023] KEELRC 1841 (KLR)

Employment and Labour Relations Court
6 July 2023
BMB. O. M. Manani
1,741 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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This was a claim by seven former employees for unpaid dues, described as banked hours or overtime, following the termination of their contracts on grounds of redundancy in August 2019. The respondent, De La Rue International Limited, applied by notice dated December 2, 2022 to strike out the suit on the basis that it had been wrongly sued. It contended that in April 2019 it transferred its business venture to De La Rue Kenya EPZ Limited, that the claimants' services were transferred to that company pursuant to notices issued in February 2017, and that De La Rue Kenya EPZ Limited assumed responsibility for settling outstanding benefits. The claimants opposed, alleging the respondent had changed names to evade obligations, admitted signing transition documents but denied the transfer ever crystallised, asserting they never signed employment contracts with De La Rue Kenya EPZ Limited. The court found the two companies to be distinct legal entities per official searches. Although no written contracts existed between the claimants and De La Rue Kenya EPZ Limited, unchallenged pay slips bearing distinct staff numbers and petty cash vouchers prepared by De La Rue Kenya EPZ Limited established an employment relationship with that company as at August 2019. The court rejected the claimants' arguments premised on continued occupation of the premises and the role of Ian Davies. Holding that the claimants were employees of De La Rue Kenya EPZ Limited when the redundancy occurred, the court struck out the suit as against the respondent and made no order as to costs.

Key legal issues

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01

Whether the respondent was the claimants' employer at the time of the August 2019 redundancy

Holding

The court held that the claimants were employees of De La Rue Kenya EPZ Limited as at August 2019, not the respondent, as evidenced by pay slips, staff numbers and petty cash vouchers issued by De La Rue Kenya EPZ Limited

Reasoning

Although the claimants denied that the transfer of their employment crystallised, documentary evidence including pay slips bearing distinct staff numbers and petty cash requisitions prepared by De La Rue Kenya EPZ Limited was unchallenged. The February 2017 agreements contemplated transfer of services, and the claimants' subsequent conduct confirmed employment with De La Rue Kenya EPZ Limited. The distinct legal personality of the two entities meant the respondent could not be held liable for the redundancy.

p. 4
02

Whether the suit should be struck out as against the wrong party

Holding

The suit was struck out because it was brought against the wrong entity and was oppressive to the respondent

Reasoning

The court found ample evidence that at the time of the alleged irregular termination the claimants were in the employment of De La Rue Kenya EPZ Limited. The redundancy notice was issued by an individual holding himself out as acting for De La Rue Kenya EPZ Limited, and there was no evidence that the respondent triggered the redundancy. Continuing the action against the respondent was unnecessary and oppressive; the proper defendant was De La Rue Kenya EPZ Limited.

p. 4

Legal principles established

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  • A company is a distinct legal entity from its related or successor companies, and employment relations shift where an employee takes up employment with the new entity even absent written contracts, provided the facts (such as pay slips) evidence the employment relation.
  • The absence of a written contract of employment does not negate the existence of an employment relationship.

Court orders

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  1. 1.The suit is struck out as prayed in the application dated December 2, 2022
  2. 2.No order as to costs

Authorities

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Legislation

  • Employment and Labour Relations Court (Procedure) RulesRule 28(3)
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court

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, "Adoyo & 6 others v De La Rue Currency & Security Limited (Cause E1051 of 2021) [2023] KEELRC 1841 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1841/eng@2023-07-06

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