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ELRCDismissedNot stated in the judgment as provided· [2024] KEELRC 1479 (KLR)

Eliud & 484 others v Mombasa Cement (Cause E097 of 2023) [2024] KEELRC 1479 (KLR)

Employment and Labour Relations Court
14 March 2024
MMM. Mbarũ
2,664 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan court dismissed 485 workers' claims against Mombasa Cement because an independent contractor, not the company, employed them.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Mombasa (M. Mbarũ, J) dismissed a claim by 485 claimants against Mombasa Cement Limited for terminal dues arising from alleged unfair termination of employment on 30 September 2020. The claimants alleged they were employed as general labourers from 1 December 2013, clearing bushes on the respondent's Kilifi properties, and claimed notice pay, unpaid leave, house allowance, public holidays, service pay, severance pay and 12 months' compensation totalling over Kshs. 240 million. The respondent denied any employment relationship, producing service agreements dated 1 November 2014 and 1 November 2019 with Omar Ali Ngala t/a Takaungu Enterprises, an independent contractor responsible for sourcing, controlling and paying its own employees. The court framed three issues: whether an employment relationship existed, whether the remedies should issue, and costs. Relying on authority permitting employers to outsource non-core functions, the court held that persons engaged under outsourced arrangements are employees of the contractor, not the outsourcing entity. The claimants' own letter of 1 September 2022 and the candid testimony of one claimant confirmed that the Chief, Omar Ali Ngala, supervised, controlled and paid them. The claimants made no effort to amend or join the contractor. Finding no employment relationship with the respondent, the court held it lacked jurisdiction to award employment benefits, dismissed the suit, and ordered the claimants to pay the respondent's costs assessed at Kshs. 48,400.

Key legal issues

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01

Existence of an employment relationship between the claimants and the respondent

Holding

No employment relationship existed; the claimants were sourced, controlled and paid by an independent contractor, Omar Ali Ngala t/a Takaungu Enterprises, under service agreements with the respondent

Reasoning

The claimants did not contest the service agreements between the respondent and the independent contractor. Their own letter of 1st September 2022 and the testimony of Munga Balu Kezule confirmed that Omar Ali Ngala supervised, controlled and paid them. Outsourcing of non-core functions (bush clearing and cleaning) is lawful; claims arising from such arrangements lie against the contractor, not the outsourcing entity. No amendment or joinder of the contractor was sought.

p. 6
02

Jurisdiction of the court to award the remedies claimed

Holding

Without an employment relationship, the court has no jurisdiction to award employment benefits

Reasoning

Jurisdiction is conferred only by the Constitution or statute. Section 12 of the Employment and Labour Relations Act ties the court's jurisdiction to the existence of an employment relationship. Notice pay, leave, house allowance, public holidays, service pay and severance are due only within an employment relationship, which was not established against the respondent.

p. 6

Legal principles established

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  • A court can only exercise jurisdiction as conferred by the Constitution or written law; without jurisdiction, a court must stop.
  • An employer is allowed to outsource its non-core business, and persons engaged under outsourced arrangements are employees of the contractor, not the outsourcing entity.

Court orders

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  1. 1.The suit is dismissed
  2. 2.The claimants shall pay costs due to the respondent, assessed at Kshs. 48,400

Authorities

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Legislation

  • Employment ActSections 35, 40, 41
  • Employment and Labour Relations ActSection 12

Cases cited (4)

  • Macharia, Samuel Kamau & another v Kenya Commercial Bank Limited & 2 others
    Application 2 of 2011; [2012] eKLR
  • Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Limited
    [1989] KLR 1
  • Elizabeth Washeke and 62 Others v Airtel Networks (k) Ltd & another
    [2013] eKLR
  • Wrigley Company (East Africa) Limited v Attorney General & 2 others & another
    [2013] eKLR
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Act - jurisdiction dependent on existence of an employment relationship

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Eliud & 484 others v Mombasa Cement (Cause E097 of 2023) [2024] KEELRC 1479 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1479/eng@2024-03-14

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