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ELRCPartially AllowedELRC Appeal (Mombasa) arising from Mombasa CMELRC No. 463 of 2018· [2023] KEELRC 3460 (KLR)

Bollore Transport and Logistics Kenya Limited v Masha & another (Appeal E035 of 2023) [2023] KEELRC 3460 (KLR)

Employment and Labour Relations Court
7 December 2023
MMM. Mbaru
1,383 words in judgment
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The bottom line

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Kenya's Employment Court ruled that employers can't be ordered to pay service pay unless employees properly plead and prove the claim within three years.

What this practically means

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Executive summary

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This was a first appeal to the Employment and Labour Relations Court at Mombasa from the magistrates' court (CMELRC No. 463 of 2018, judgment of 23 March 2023). The 1st respondent had claimed he was employed as a loader from 1994, initially by the appellant and later, upon outsourcing of labour, by the 2nd respondent at Ksh 800 per day, and that his termination on redundancy in February 2018 was unfair. He sought notice pay, severance pay, service pay, leave dues and 12 months' compensation. The trial court found the 2nd respondent was the employer which unfairly terminated employment, awarding notice pay, leave for three years, six months' compensation, and directing the appellant to pay service pay. The appellant appealed solely against the order to pay service pay, contending there was no employment relationship with the 1st respondent, who had admitted employment by the 2nd respondent. The court, per M. Mbaru, J, noted the unchallenged labour outsourcing agreement effective 1 June 2016, under which the 2nd respondent held employment contracts with its employees, and the 1st respondent's admission that his wages were paid by the 2nd respondent. The court held that service pay under Section 35(5) and (6) of the Employment Act requires proper pleading of non-payment of statutory dues or absence of a pension or medical scheme; the claim for 24 years' service pay lacked foundation, was not assessed by the trial court, and any claim tied to the appellant's pre-transition employment was time barred under Section 90. Allowing the appeal, the court set aside in its entirety the order directing the appellant to pay service pay, leaving the rest of the trial judgment intact, and ordered each party to bear their own costs.

Key legal issues

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01

Whether the appellant could be ordered to pay service pay to the 1st respondent

Holding

No. The 1st respondent's own pleadings and evidence showed his employment had transitioned to the 2nd respondent under a labour outsourcing agreement; any service pay claim against the appellant was unpleaded in foundation, unquantified, unreasoned by the trial court and time barred.

Reasoning

The trial court awarded service pay against the appellant without assessing the period covered or giving reasons. The 1st respondent admitted he was employed by the 2nd respondent after transitioning, and the unchallenged outsourcing agreement from 1 June 2016 confirmed the 2nd respondent held the employment contracts. Any service pay claim tied to the appellant's pre-2016 employment was caught by Section 90 limitation and should have been pleaded as a continuing injury.

p. 4
02

Limitation of employment claims

Holding

Claims arising from employment with the appellant dating back to 1994 should have been addressed within the three-year limitation window under Section 90, i.e. up to 9 December 2015.

Reasoning

The claim was filed on 8 December 2018. Under Section 90 of the Employment Act, 2007 claims must be brought within three years of the accrual of the cause of action. Any claim relating to the appellant's employment ending on the transition to the 2nd respondent accrued years earlier and was time barred; waiting until the end of employment with the 2nd respondent did not revive it.

p. 3

Legal principles established

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  • Service pay is due under Section 35(5) and (6) of the Employment Act only where the employee pleads non-payment of statutory dues or absence of a pension scheme or medical cover, or where the benefit arises from contract or a collective agreement
  • Employment claims are subject to the three-year limitation period under Section 90 of the Employment Act, and a claim arising from a transition of employment must be brought as a continuing injury within 12 months or within 3 years
  • On a first appeal the court must review the entire record and reach its own conclusions while according due deference to the trial court's advantage of hearing the evidence

Court orders

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  1. 1.The appeal is allowed
  2. 2.The judgment in Mombasa CMELRC No. 463 of 2018 directing the appellant to pay service pay to the 1st respondent is set aside in its entirety
  3. 3.Each party to bear own costs of the appeal
On appeal from
Magistrates' Court (CMELRC), Mombasa
Mombasa CMELRC No. 463 of 2018
Jurisdiction invoked
First appellate jurisdiction of the Employment and Labour Relations Court over the subordinate court (CMELRC) judgment

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, "Bollore Transport and Logistics Kenya Limited v Masha & another (Appeal E035 of 2023) [2023] KEELRC 3460 (KLR)", Case Analysis (2023). ELRC Appeal (Mombasa) arising from Mombasa CMELRC No. 463 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3460/eng@2023-12-07

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