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ELRCDismissedNot stated in judgment· [2024] KEELRC 1243 (KLR)

Karimi v Financial Access East Africa Limited (Cause E487 of 2023) [2024] KEELRC 1243 (KLR)

Employment and Labour Relations Court
20 May 2024
NMNzioki wa Makau
2,135 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 dismissed a company's attempt to be removed from an employment case, confirming disputed facts about who employed a worker must go to trial.

What this practically means

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Executive summary

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The 2nd Respondent filed a Notice of Preliminary Objection dated 28th July 2023 seeking to strike out the entire claim against it on the grounds that no employment relationship existed between it and the Claimant, that it was not her employer within the meaning of Section 2 of the Employment Act, 2007, and that the Employment and Labour Relations Court therefore lacked jurisdiction over it. It relied on Benard Ochieng Oduor v Trade Winds Aviation Services Limited, where a second respondent with no employment relationship with the claimant was removed from proceedings. The Claimant opposed, swearing that she was interviewed, inducted, instructed and paid by the 2nd Respondent, that its CEO executed her contract as CEO of the 1st Respondent (its agent), and that a triangular employment relationship existed requiring the corporate veil between the two respondents to be examined. She relied on Mukisa Biscuit to argue the objection raised disputed facts. The court, Nzioka wa Makau J, applied Mukisa Biscuit and held that a preliminary objection lies only in clear cut cases on undisputed facts; here the court must ascertain the employment relationships among the parties, including whether the Claimant was an employee of either respondent. The objection was characterised as an unnecessary, improper practice deprecated by Newbold JA. The preliminary objection was dismissed with costs to the Claimant, with directions on the disposal of the suit to follow.

Key legal issues

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01

Whether the objection is a valid preliminary objection in law

Holding

It is not; it turns on disputed facts about the existence of an employment relationship between the Claimant and the 2nd Respondent

Reasoning

Applying Mukisa Biscuit, a preliminary objection must rest on a point of law founded on undisputed facts. Whether the Claimant was an employee of the 1st and/or 2nd Respondent requires ascertainment of facts, including the agency arrangement, control, integration and payment of salary, which cannot be resolved on a preliminary objection. The objection was unnecessary and an improper practice deprecated by Sir Charles Newbold JA.

p. 4
02

Whether the 2nd Respondent can be a party to the claim despite the contract of service being with the 1st Respondent

Holding

The question of the 2nd Respondent's role, including the alleged triangular employment relationship and piercing of the corporate veil, is a matter for trial

Reasoning

The Claimant asserts a triangular employment relationship: she was interviewed, inducted, instructed, resourced and paid by the 2nd Respondent, whose CEO also headed the 1st Respondent and executed her contract. These contentions, invoking the control and integration tests and the corporate veil, raise factual questions that must be ventilated at the hearing, not determined on a preliminary objection.

p. 4

Legal principles established

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  • A preliminary objection can only succeed in clear cut cases on undisputed facts; where facts must be ascertained it cannot be sustained
  • The improper raising of preliminary objections increases costs and confuses the issues and should stop

Court orders

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  1. 1.The preliminary objection dated 28th July 2023 is dismissed with costs to the Claimant
  2. 2.Directions on the disposal of the suit will follow immediately upon delivery of the Ruling

Authorities

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Legislation

  • Employment Act, 2007Sections 2, 41, 43, 44, 45, 46, 48, 49; Parts 3, 4 and 5
  • Labour Relations Act, 2007Not specified
  • Constitution of Kenya, 2010Articles 162(2), 162 and 165

Cases cited (5)

  • Benard Ochieng Oduor v Trade Winds Aviation Services Limited & another
    [2020] eKLR
  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd
    [1969] EA 696
  • Independent Electoral & Boundaries Commission v Jane Cheperenger & 2 others
    [2015] eKLR
  • Rose Wangui Mambo & 2 others v Limuru County Club and 17 others
    [2014] eKLR
  • Christine Adot Lopeyio v Wycliffe Mwathi Pere
    [2013] eKLR
Jurisdiction invoked
Articles 162 and 165 of the Constitution of Kenya, 2010

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, "Karimi v Financial Access East Africa Limited (Cause E487 of 2023) [2024] KEELRC 1243 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1243/eng@2024-05-20

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