Ready Consultancy Company Limited v Kamotso & another (Appeal E018 of 2024) [2024] KEELRC 2463 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Identity of the employer notwithstanding the outsourcing agreements
The appellant remained the employer at all material times; the agreements were commercial labour-supply contracts, not a transfer of employment
The court analysed the outsourcing agreements and found they merely placed the appellant's employees with the 2nd respondent. The appellant retained responsibility for statutory payments and work records, and its own witness confirmed no employment relationship with the 1st respondent. Failure to issue a written contract could not alter the employment status or defeat the employee's statutory entitlements.
Limitation under Section 90 of the Employment Act
Reliance on Section 90 to fix employment cessation at 1 January 2009 fails because the outsourcing was a labour-provision commercial arrangement and employment continued to retirement on 30 September 2021
The court held the outsourcing agreement was not an outsourcing in the strict sense, so the employment relationship did not end in 2009. Consequently claims were not time-barred for the period pleaded, and the appellant could not escape liability for terminal dues accruing up to retirement in 2021.
Quantum of leave pay and service pay
Leave pay limited to 33 days at Ksh.654 per day (Ksh.21,582); service pay at 15 days' wages per full year for 20 years (Ksh.196,200); refund of NSSF deductions subsumed in service pay
Section 28(4) bars accumulation of leave beyond 18 months absent proof of a refused application, limiting leave pay to 33 days. Absent records of compliance with Sections 35(5) and (6), service pay fell due at 15 days per full year. The NSSF refund claim was absorbed into the service pay award.
Legal principles established
#- A contract for the provision of labour is a commercial contract that does not transfer the employment relationship; the original employer retains the employment duties
- An employee retained on casual terms over a long period is protected under Section 37 of the Employment Act
- Leave days cannot accumulate beyond 18 months absent proof the employee applied for leave and was denied it
- The duty to keep and produce work records lies on the employer
Court orders
#- 1.The judgment delivered in Mombasa CMELRC No.433 of 2022 is set aside
- 2.Declaration that the appellant was the employer of the 1st respondent
- 3.The appellant to pay the 1st respondent's terminal dues in full
- 4.Leave pay of Ksh.21,582
- 5.Service pay of Ksh.196,200
- 6.The appellant to pay the costs of proceedings before the lower court and this appeal to the 1st respondent
- On appeal from
- Mombasa CMELRC (Magistrates' Court, ELRC)
- 433 of 2022
- Jurisdiction invoked
- First appellate jurisdiction over the subordinate court (CMELRC) judgment — first appeal by way of re-evaluation of the record
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ready Consultancy Company Limited v Kamotso & another (Appeal E018 of 2024) [2024] KEELRC 2463 (KLR)", Case Analysis (2024). Appeal from Mombasa CMELRC No.433 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2463/eng@2024-10-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.