Otulia v Menengai Oil Refineries Ltd & another
The bottom line
#A Kenyan court ruled that outsourcing a worker without protecting his agreed terms amounted to unfair termination, awarding him over Kshs. 271,000.
What this practically means
#Executive summary
#Key legal issues
#Lawfulness of the outsourcing arrangement by the 1st respondent
The 1st respondent's outsourcing without consultation or securing the claimant's terms amounted to an unlawful termination for which it is liable, though the prayers sought did not relate to that termination
Applying the Wrigley Company parameters for credible outsourcing, the court found the 1st respondent did not adhere to best practice; the claimant was unaware his services were being outsourced. Outsourcing did not absolve the 1st respondent of its obligations, and transferring the claimant without securing his agreed terms was tantamount to a termination. However, the reliefs pleaded all related to the later 20/07/2023 termination by the 2nd respondent, so no relief was granted against the 1st respondent.
Compensation for unfair dismissal by the 2nd respondent
Awarded 11 months' gross salary as compensation, Kshs. 253,550, against the 2nd respondent
The contract terminated on 20/07/2023 was a fixed term contract with the 2nd respondent, who was the claimant's employer at that time. The court found an unfair termination and exercised discretion to award the equivalent of 11 months' gross salary, Kshs. 253,550, entering judgment against the 2nd respondent only.
Underpayment based on minimum wage orders
Claim failed; special damages not strictly proved
Although the evidence on a balance of probability showed the claimant was employed by the respondents, it did not establish the underpayment as prayed for. The court reiterated that it is not enough to merely plead special damages; they must be strictly proved, and no evidence establishing underpayment against the minimum wage orders was found on the record.
Legal principles established
#- Outsourcing an employee's services without the employee's knowledge or securing their terms is tantamount to a termination and does not absolve the original employer of obligations
- An employer cannot be liable for termination of employment occurring after the employee has ceased to be its employee
Court orders
#- 1.Judgment entered against the 2nd respondent in favour of the claimant
- 2.Compensation for unlawful dismissal of 11 months' gross salary, Kshs. 253,550
- 3.Unpaid wages of Kshs. 17,730.80
- 4.Costs of the suit
- 5.Interest at court rates
- Jurisdiction invoked
- Employment and labour relations claim under the Employment Act regime; memorandum of claim filed as Cause 252 of 2023
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Otulia v Menengai Oil Refineries Ltd & another", Case Analysis (2026). Cause 252 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/1009/eng@2026-10-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.