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ELRCDismissedCause No 2442 of 2016· [2024] KEELRC 2123 (KLR)

Mburu v Insight Management Consultants Limited & another (Cause 2442 of 2016) [2024] KEELRC 2123 (KLR)

Employment and Labour Relations Court
9 August 2024
3,068 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled a staffing agency employee can only sue his actual employer, and fair performance-based dismissal is lawful.

What this practically means

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Executive summary

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The Claimant, a Sales Representative, sued two Respondents claiming he was employed through the 1st Respondent, an employment agency, to work at the 2nd Respondent's business, and that his five-year contract running to March 2020 was terminated prematurely, unfairly and unlawfully in September 2016. He sought notice pay, salary and allowances for the remainder of the contract, unremitted N.S.S.F. contributions, retraction of a customer notification e-mail, specific performance, a Certificate of Service, and twelve months' salary as compensation for unfair termination. The 1st Respondent maintained he was dismissed for poor performance after a Performance Improvement Plan, with a hearing, appeal, notice pay and Certificate of Service. The 2nd Respondent denied any employer-employee relationship, relying on clause 6 of the contract, and denied the customer notification was defamatory. The Court held the Claimant was an employee of the 1st Respondent alone, since it executed the contracts, paid and reviewed his salary, evaluated performance, exercised disciplinary control, terminated the contract and issued the Certificate of Service. Termination was procedurally fair and founded on a valid reason under Sections 41, 43 and 45 of the Employment Act: the Claimant was placed on a PIP, heard at review meetings, and his appeal was considered and rejected; his own concession that his sales were under par confirmed the reason. The customer e-mail was a factual statement within the restrictive covenants in his contract and was not defamatory. The entire claim was declined against both Respondents, with no order on costs. Judgment delivered by James Rika, Judge, on 9th August 2024.

Key legal issues

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01

Identity of the employer

Holding

The Claimant was an employee of the 1st Respondent only; the claim against the 2nd Respondent was declined.

Reasoning

All contracts were executed with the 1st Respondent, which paid and reviewed his salary, evaluated performance, exercised disciplinary control, terminated the contract and issued the Certificate of Service. Clause 6 expressly excluded an employer-employee relationship with the client. No evidence suggested he was a shared employee.

p. 5
02

Fairness and validity of termination

Holding

Termination was procedurally fair and founded on a valid reason under Sections 41, 43 and 45 of the Employment Act.

Reasoning

The Claimant was placed on a Performance Improvement Plan, attended performance review meetings, was heard at a three-way meeting of 5th September 2016, and was allowed an appeal which was considered and rejected. His concession on cross-examination that his sales were under par, attributed to donating sales to his trainee, confirmed under-par performance.

p. 6
03

Defamation

Holding

The e-mail to customers informing them of the Claimant's departure was not defamatory.

Reasoning

The notice was a statement of fact, not malicious or damaging, and was made within the spirit of restrictive covenants in clauses 24 and 25 of the contract. It was usual and permissible to notify customers that a salesperson had ceased employment and was no longer authorized to transact business.

p. 6

Legal principles established

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  • The reason for termination is what the employer genuinely believed to exist at the time of termination, per Section 43 of the Employment Act.
  • Employers are entitled to enforce restrictive covenants against former employees covering non-competition, non-solicitation, non-dealing and non-poaching.
  • An employee deployed to a client company under a manpower-supply arrangement is not thereby an employee of that client where the contract excludes such a relationship.

Court orders

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  1. 1.The Claim is declined against both Respondents.
  2. 2.No order on the costs.

Authorities

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Legislation

  • Employment ActSection 43
  • Employment ActSection 41
  • Employment ActSection 45
  • Electronic Case Management Practice Directions, 2020Practice Direction 6[2]

Cases cited (4)

  • Jane Samba Mukala v. Ol Tukai Lodge Limited
    [2013] e-KLR
  • Galgalo Jarso Jillo v. Agricultural Finance Corporation
    [2021] e-KLR
  • Kaiga v. Das
    [Claim No. 2 of 2023] KEERC 2194 [KLR]
  • Kudwoli & Another v. Eureka Educational Training Consultants & 2 Others
    [1993] KLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 41, 43 and 45 applied); specific constitutional/statutory provision not stated in 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, "Mburu v Insight Management Consultants Limited & another (Cause 2442 of 2016) [2024] KEELRC 2123 (KLR)", Case Analysis (2024). Cause No 2442 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2123/eng@2024-08-09

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