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Case Brief · caselaw.co.ke
ELRCDismissedCause No. E571 of 2020· [2026] KEELRC 2585 (KLR)

Dorsilla Agunda v Hillcrest Investments Limited

Employment and Labour Relations Court of Kenya
28 September 2026
2,157 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to add a company's new owner to an unfair dismissal case because the employee missed the legal deadline to object to the business transfer.

What this practically means

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Executive summary

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This ruling by the Employment and Labour Relations Court at Nairobi (Makau J) determined the Claimant's Notice of Motion dated 16th January 2026 seeking to join Braeburn Schools Limited as a second respondent to her suit against Hillcrest Investments Limited, her former employer, claiming damages for unfair termination, underpayment, and discrimination on account of race. The claimant argued that Hillcrest had been wholly acquired by Braeburn, which was evading the transferor's legal obligations. Braeburn opposed, relying on a Gazette Notice dated 7th October 2022 published under the Transfer of Businesses Act, Cap 500, which expressly stated the transferee would not assume pre-transfer liabilities. The court framed a single issue: whether Braeburn should be joined. Applying Order 1 Rule 10(2) of the Civil Procedure Rules and the Court of Appeal's joinder principles in EG v Attorney General, the court held that section 3(4) of the Transfer of Businesses Act makes the Gazette Notice prima facie evidence against both parties, and that under section 3(2) the transferee's statutory liability ceased because the claimant neither sued Braeburn within the notice period nor objected to the Registrar. Braeburn had no personal stake in the matter, its presence would not aid resolution, and joinder would vex the parties and convolute the proceedings. The court dismissed the motion with costs.

Key legal issues

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01

Whether Braeburn Schools Limited should be joined as a respondent to the employment suit

Holding

The application for joinder was dismissed; Braeburn is neither a proper nor necessary party because it did not assume the transferor's pre-transfer liabilities and the claimant did not institute proceedings against it within the statutory notice period.

Reasoning

The court applied Order 1 Rule 10(2) CPR and the joinder principles in EG v Attorney General. The Gazette Notice under the Transfer of Businesses Act expressly excluded assumption of pre-transfer liabilities and, per section 3(4), is prima facie evidence against both parties. The claimant neither objected to the transfer nor sued Braeburn within the notice period, so the transferee's statutory liability had ceased. Joinder would prejudice Braeburn and convolute the suit.

p. 9
02

Effect of the Gazette Notice under the Transfer of Businesses Act, Cap 500

Holding

The Gazette Notice of 7th October 2022 was conclusive prima facie evidence that the transferee would not assume pre-transfer liabilities, and the claimant is deemed to have had constructive notice of its contents.

Reasoning

Section 3(4) makes the Gazette notice prima facie evidence against transferor and transferee. The notice period lapsed without the claimant instituting proceedings against Braeburn or objecting to the Registrar, so under the proviso to section 3(2) the transferee's liability ceased. The claimant's failure to supply the underlying agreement could not displace the statutory presumption.

p. 9

Legal principles established

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  • Under section 3(1) of the Transfer of Businesses Act, Cap 500, a transferee becomes liable for liabilities incurred in the transferred business notwithstanding any agreement to the contrary, but that liability ceases once the statutory notice becomes complete unless proceedings were instituted within the notice period.
  • Production of the Gazette notice under section 3(4) of the Transfer of Businesses Act is prima facie evidence against both transferor and transferee of the statements contained in the notice.
  • A party whose presence is not necessary for effectual adjudication, and who assumed no liability for the claim, should not be joined; joinder that would vex parties and convolute proceedings is refused.

Court orders

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  1. 1.Dismissal of the Claimant's Notice of Motion dated 16th January 2026
  2. 2.Costs of the application to the Respondent
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over the employment cause; interlocutory application under Order 1 Rule 3 & 10 of the Civil Procedure Rules

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, "Dorsilla Agunda v Hillcrest Investments Limited", Case Analysis (2026). Cause No. E571 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2585/eng@2026-09-28

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