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ELRCDismissed· [2025] KEELRC 153 (KLR)

Wanyoike v Transcentury PLC (Employment and Labour Relations Cause E961 of 2022) [2025] KEELRC 153 (KLR)

Employment and Labour Relations Court
30 January 2025
BMB. O. M. Manani
5,609 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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An employee transferred to his employer's South African subsidiary could not recover his exit dues from the Kenyan parent company, Trans Century Plc.

What this practically means

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Executive summary

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The Claimant sought terminal dues following the lapse of his last contract of service in September 2022, contending that Trans Century Plc (the Respondent) was his employer and had agreed, verbally and by correspondence, to settle accrued salary arrears of USD 38,777.41, a medical cover refund of Ksh. 108,792.00, petty cash of R 56,750.26 and severance pay of USD 14,023.59. He asserted he was seconded to Kewberg Cables & Braids PTY Limited, a South African subsidiary, whose salary obligations the Respondent had assumed from March 2016. The Respondent denied the employment relation, asserting the Claimant was employed by Kewberg Cables, a distinct legal entity, that it paid his salary merely as that company's agent with payments charged to its account, and contested the court's jurisdiction on the ground that the cause of action arose and was performed in South Africa. The court framed three issues: jurisdiction, the existence of an employment relation with the Respondent, and entitlement to relief. It held it had jurisdiction, since the dispute concerned the alleged relation with the Kenyan Respondent, not the South African contract. On the evidence, including the Respondent's letter of 20 July 2018 and the intra-company transfer work permits, the court found the Claimant moved to Kewberg Cables by intra-company transfer, not secondment, severing his employment with the Respondent and establishing employment with Kewberg Cables. Payments by the Respondent were as agent, at the Claimant's own proposal, and created no employment relation; the email correspondence did not bind the Respondent absent a Board Resolution. The court declined to lift the corporate veil, which had never been sought, and dismissed the suit with costs to the Respondent.

Key legal issues

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01

Territorial and subject-matter jurisdiction of the ELRC

Holding

The court has jurisdiction because the dispute concerns the alleged employment relationship with the Respondent, a Kenyan company, not the contract with Kewberg Cables.

Reasoning

The Respondent's objection rested on the contract with Kewberg Cables, but the Claimant sued only the Respondent alleging an employment relation with it. Whether an employment relation exists is a matter of fact and law which the ELRC is constitutionally mandated to determine; determining it is itself an exercise of jurisdiction. The alleged contract with the Respondent was concluded in Kenya and the Respondent is resident and operates in Kenya, so the dispute falls within this court, not the South African courts.

p. 4
02

Whether the Claimant was an employee of the Respondent

Holding

The Claimant was intermittently an employee of the Respondent but, upon each intra-company transfer, became an employee of Kewberg Cables, whose responsibility it was to settle his exit dues.

Reasoning

The Respondent's letter of 20 July 2018 agreed to an intra-company transfer to Kewberg Cables, a distinct legal entity. Work permits were issued on intra-company transfer, not secondment. The contract of 28 May 2021 named Kewberg Cables as employer and placed the salary obligation on it. Payments by the Respondent were made as Kewberg Cables' agent and charged to its account, at the Claimant's own proposal, and did not create an employment relation.

p. 10
03

Whether emails bound the Respondent to settle terminal dues

Holding

No agreement was concluded that the Respondent would pay the dues; negotiations were incomplete and there was no Board Resolution binding the Respondent.

Reasoning

The email trail of September 2022 showed outstanding issues on payment plan, exchange rate and petty cash refunds, and drafts were issued on Kewberg Cables' letterhead, which the Claimant protested. Without a Board Resolution, the email exchanges could not bind the Respondent to assume Kewberg Cables' liabilities.

p. 9
04

Claim of unlawful variation and illegality of contracts

Holding

Both contentions failed - the Respondent was not party to the Kewberg Cables contracts, and illegality was never pleaded.

Reasoning

Since the Claimant was in the exclusive employment of Kewberg Cables save for short interludes, the Respondent could not have unlawfully varied contracts it was not party to. The allegation that the contracts contravened sections 83 and 85 of the Employment Act was not pleaded, so the court declined to pronounce on the unpleaded issue.

p. 10

Legal principles established

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  • Where an employee is transferred to a subsidiary or affiliate with separate corporate personality, the transfer severs the employment relation with the parent company and establishes a new one with the subsidiary.
  • A contract of service need not be in writing to exist; it may be oral or implied from conduct, with the burden of proving disputed terms falling on the employer who failed to reduce it to writing under section 10(7) of the Employment Act.
  • Liabilities of a subsidiary cannot be transferred to a parent company absent lifting of the corporate veil; payment of an employee's salary by a related company as agent does not create an employment relation.

Court orders

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  1. 1.Declaration that the court is seized of the requisite jurisdiction to determine the dispute.
  2. 2.Finding that the Claimant was transferred to Kewberg Cables through intra-company transfer and became Kewberg Cables' employee, which bears responsibility for his exit dues.
  3. 3.Suit dismissed with costs to the Respondent.

Authorities

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Legislation

  • Employment and Labour Relations Court Actsection 12
  • Employment Actsections 8, 9(2), 10, 10(7), 83, 85
  • Public Service Commission Regulations2020 (definition of transfer)
  • Immigration Act of South Africa, Act No. 13 of 2002section 19(5) and (6)
  • Constitution of Kenyaarticle 41
  • ELRC Procedure RulesRule 28(3)

Cases cited (5)

  • Hannah Maina t/a Taa Flower v Rift Valley Bottlers Limited
    [2016] eKLR
  • Mosi v National Bank of Kenya Limited
    [2001] eKLR
  • Fredrick Otieno Oluoch v Oryx Energies (K) Limited & another
    [2020] eKLR
  • Peter O. Ngoge T/A O P Ngoge & Associates v Ammu Investment Company Limited
    [2012] eKLR
  • Ndishu & another v Muriungi (Civil Appeal 3 of 2020)
    [2022] KEHC 2 (KLR) (21 January 2022)
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act

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, "Wanyoike v Transcentury PLC (Employment and Labour Relations Cause E961 of 2022) [2025] KEELRC 153 (KLR)", Case Analysis (2025). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/153/eng@2025-01-30

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