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ELRCDismissedELRC No. 324 of 2017

Muthama v Tetra Pak Limited & another (Cause 324 of 2017) [2024] KEELRC 1254 (KLR)

Employment and Labour Relations Court
3 May 2024
3,346 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~13 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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Charles Muthama, formerly employed by Tetra Pak Ltd (Kenya) as a Training and Development Manager, alleged he was seconded to Tetra Pak Information Management AB, a Swiss entity, as an expatriate from 1st July 2001 to 31st March 2003. He claimed his contract was not renewed despite assurances, that he signed a dissolution agreement on 2nd April 2003 under duress, and that he was constructively dismissed and discriminated against. He sought declarations that the dissolution agreement was null and void and of discrimination, damages for breach of contract, misrepresentation and discrimination, six months' salary for January to June 2002, twelve months' salary for unfair termination, and costs. The 1st Respondent denied liability, contending it was a separate entity from the 2nd Respondent, that the Claimant's employment ended when he signed a new contract with a different party, and raised objections on jurisdiction, foreign service of summons, the Swiss governing-law clause, and the arbitration clause. The 2nd Respondent entered appearance in protest but filed no response. The court framed three issues: jurisdiction over the 2nd Respondent, cause of action against the 1st Respondent, and merit. It held the employment contract was international, governed by Swiss law and performed in Sweden, so it could not assume jurisdiction over the 2nd Respondent. It found the Claimant had accepted a fixed-term contract with the 2nd Respondent after an internal application and interviews, with no evidence of secondment or an undertaking of re-employment, so no cause of action lay against the 1st Respondent. The claim was dismissed with no orders as to costs on 3rd May 2024.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the court has assumed jurisdiction over the 2nd Respondent
  2. 2.Whether the Claimant has established a cause of action against the 1st Respondent
  3. 3.Whether the Claimant's claim, in any case, is merited

Key legal issues

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01

Jurisdiction over the 2nd Respondent (foreign entity, Swiss-law contract)

Holding

Court declined jurisdiction; contract governed by Swiss law and performed in Sweden, outside the court's jurisdiction.

Reasoning

The court examined the employment contract, noting it was with Tetra Pak Information Management AB, a foreign entity, governed by Swiss law, and to be performed in Sweden. It therefore concluded the Kenyan court could not assume jurisdiction over the dispute arising from that contract.

p. 7
02

Cause of action against the 1st Respondent

Holding

No cause of action established against the 1st Respondent; Claimant accepted a new fixed-term contract with the 2nd Respondent.

Reasoning

Although the Claimant alleged secondment, his own testimony showed he applied for an internally advertised position and was interviewed and offered employment by the 2nd Respondent. No secondment letter or separation agreement was produced. The new contract converted his terms to a fixed-term contract with a different entity, so the 1st Respondent was not accountable for the termination.

p. 8
03

Merits of the claim

Holding

Claim dismissed as without merit in light of the jurisdiction and cause of action findings.

Reasoning

Having found no jurisdiction over the 2nd Respondent and no cause of action against the 1st Respondent, the court held that none of the reliefs sought - declarations on the dissolution agreement, discrimination, damages, or compensation for unfair termination - could issue, and dismissed the claim.

p. 8

Legal principles established

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  • Where an employee accepts an employment offer from a foreign entity governed by foreign law and to be performed abroad, the Kenyan court cannot assume jurisdiction over that foreign employer.
  • An employee who takes up new employment with a distinct corporate entity cannot hold a former employer liable for termination by that entity absent evidence of a secondment or re-employment arrangement.

Court orders

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  1. 1.Dismissal of the Claimant's claim
  2. 2.No orders as to costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act; contest on extra-territorial jurisdiction over a foreign employer and Swiss-law contract

Relief refused

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Declaration that the Dissolution Agreement of 2nd April 2003 is null and void

Court found it could not assume jurisdiction over the 2nd Respondent and no cause of action against 1st Respondent

p. 8

Declarations of discrimination, damages for breach of contract, misrepresentation and discrimination, and 12 months' salary for unfair termination

Claim dismissed as without merit

p. 8

Costs

There will be no orders as to costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

A cursory examination of the above employment contract shows that it is an international contract governed by the Swiss Laws. Evidently, the Claimant was to work in Sweden which is outside this court's jurisdiction. In my view, the court cannot therefore assume jurisdiction.
p. 7jurisdiction over foreign employer
In my view, the Claimant accepted the employment ofier by the 2nd Respondent and subjected himself to the terms and conditions of that contract which converted his employment terms to a fixed term contract.
p. 8separate corporate entities / fixed-term contract
In the end, I find the Claimant's claim to be without merit and hereby dismiss it. There will be no orders as to costs.
p. 8disposition

Issues in the judgment

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minor

Inconsistent dates for the Dissolution Agreement - pleaded as 2003 in one paragraph and 2023 in another

minor

Inconsistent dates for the 1st Respondent's employment of the Claimant (14th July 1998 vs 15th September 1998 vs 17th July 1998 contract)

minor

Inconsistent dates for 1st Respondent's Statement of Defence (dated 15th December 2005, filed 16th December 2005) in a 2017 suit

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, "Muthama v Tetra Pak Limited & another (Cause 324 of 2017) [2024] KEELRC 1254 (KLR)", Case Analysis (2024). ELRC No. 324 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1254/eng@2024-05-03

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