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ELRCPartially AllowedApplication dated 18th September 2024 (Claimant's application) in an employment claim· [2025] KEELRC 65 (KLR)

Kagwamba v Biozeq Kenya Limited (Employment and Labour Relations Cause E195 of 2023) [2025] KEELRC 65 (KLR)

Employment and Labour Relations Court
17 January 2025
3,328 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan employment court refused to let a sacked employee sue his employer's directors directly, but allowed him to update his claim against the company.

What this practically means

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Executive summary

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This ruling of the Employment and Labour Relations Court at Nairobi (Stella Rutto, J) determined the Claimant's application dated 18th September 2024 seeking to set aside orders of 28th February 2024 by which the 2nd, 3rd and 4th Respondents (directors of the 1st Respondent, BioZeq Kenya Limited) were struck out of the suit after the Claimant's advocates failed to attend court or respond. The Claimant, who alleges wrongful termination of his employment, blamed his previous counsel's illness and negligence, and also sought leave to amend his Statement of Claim, arguing the directors were attempting to evade responsibility as the company faced financial collapse. The Respondent opposed, maintaining it is a separate legal entity from its directors, that no employment contract existed with the directors, and that the amendments were intended to rejoin unnecessary parties. The Court framed two issues: whether to set aside the orders of 28th February 2024, and whether to grant leave to amend. Applying Shah v Mbogo, it found no plausible grounds to set aside the orders, holding under Salomon v Salomon and Victor Mabachi v Nurturn Bates that the company is distinct from its directors and that remedies against directors exist at execution stage if obstruction is proved. However, applying Rule 34 of the ELRC (Procedure) Rules 2024 and the Aquiline Agencies principles, the Court granted leave to amend the Statement of Claim, with corresponding leave to the Respondent, fixing timelines of 7 and 14 days, and ordered that costs of the application abide the outcome of the main suit.

Key legal issues

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01

Setting aside the ex-parte orders of 28th February 2024

Holding

Refused; no plausible reasons advanced for setting aside the orders striking out the 2nd, 3rd and 4th Respondents

Reasoning

The Court applied the Shah v Mbogo principles on discretionary relief. In allowing the striking-out application, the Court had noted that no orders were sought against the 2nd to 4th Respondents and that the dispute was between the Claimant and the 1st Respondent, his employer. The claim of financial collapse and directors evading responsibility did not warrant disturbing the order given the Salomon principle.

p. 5
02

Whether directors can be joined in an employment suit against the company

Holding

No; the company is a separate legal entity and allegations of financial collapse do not justify joining directors

Reasoning

Relying on Salomon v Salomon and Victor Mabachi v Nurturn Bates, the Court held that a company is a juristic person distinct from its directors. If a claimant establishes at execution stage that directors acted to frustrate a decree, legal mechanisms exist to hold them liable; those are not grounds for joinder at trial.

p. 5
03

Leave to amend the Statement of Claim

Holding

Granted; amendments relevant to the core unfair-termination dispute and permissible before final judgment

Reasoning

Rule 34 of the ELRC (Procedure) Rules 2024 permits amendment subject to leave and corresponding leave to the other side. Applying the Aquiline Agencies principles, the Court found the proposed amendments relevant to the real issues, made in good faith, and within the timeframe allowed since the matter was yet to proceed to hearing.

p. 6

Legal principles established

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  • The discretion to set aside ex-parte orders is exercised to avoid injustice from accident, inadvertence or excusable mistake, not to assist deliberate obstruction or delay
  • A company is a separate legal entity distinct from its shareholders, directors and agents unless factors warrant lifting of the veil exist
  • Amendments to pleadings are permissible at any stage before final judgment and should generally be allowed if made in good faith, provided costs can compensate the other side

Court orders

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  1. 1.The Claimant/Applicant is granted leave to amend his Statement of Claim with necessary modifications referencing the 2nd, 3rd and 4th Respondents
  2. 2.The amended Statement of Claim to be filed and served upon the Respondent within 7 days from the date of the Ruling
  3. 3.The Respondent is granted corresponding leave to amend, file and serve its Response to the amended Statement of Claim within 14 days from the date of service with the amended Statement of Claim
  4. 4.The costs of the Application shall abide the outcome of the main suit
  5. 5.Refusal to set aside the orders of 28th February 2024 striking out the 2nd, 3rd and 4th Respondents

Authorities

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Legislation

  • Employment and Labour Relations Court (Procedure) Rules 2024Rule 34
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (6)

  • Shah vs Mbogo
    [1967] E A 116 and 123B
  • Salomon v Salomon & Co. Ltd.
    [1897] AC
  • Victor Mabachi & Anor vs Nurturn Bates Ltd
    NRB CA Civil Appeal No. 247 of 2005 [2013] eKLR
  • Joseph Ochieng & 2 others Trading as Aquiline Agencies vs First National Bank of Chicago
    [1995] eKLR
  • Institute for Social Accountability & another vs Parliament of Kenya & 3 others
    (2014) eKLR
  • Ukwala Supermarket vs Jaideep Shah & Kamal Shah
    (2023) eKLR
Jurisdiction invoked
Employment and Labour Relations Court (Procedure) Rules 2024, Rule 34; Employment and Labour Relations Court jurisdiction over employment disputes

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, "Kagwamba v Biozeq Kenya Limited (Employment and Labour Relations Cause E195 of 2023) [2025] KEELRC 65 (KLR)", Case Analysis (2025). Application dated 18th September 2024 (Claimant's application) in an employment claim. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/65/eng@2025-01-17

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