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ELRCPartially AllowedNot stated in judgment

Lucas Otieno Ondong v Equitorial Commercial Bank Limited & another [2016] KEELRC 1838 (KLR)

Employment and Labour Relations Court
31 March 2016
1,374 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~5 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court removed the Central Bank from a banker's unfair termination case, confirming you can only sue the party that actually employed you.

What this practically means

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Executive summary

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The 2nd Respondent, the Central Bank of Kenya, filed a Notice of Motion dated 26th June 2015 seeking the striking out and dismissal of the suit against it on the ground that the dispute was purely an employer-employee matter between the Claimant and the 1st Respondent, Equatorial Commercial Bank Limited, and that privity of contract did not impose obligations on the 2nd Respondent. The Claimant opposed, asserting a nexus between the 2nd Respondent's inspection report of 31st January 2014 and his termination on 14th July 2014, and invoking Articles 41 and 159(d) of the Constitution. The Court noted that the ELRC Act and its rules do not directly address joinder and that the Court relies on the Civil Procedure Act and Rules, applying Order 1 rule 10(2) as adopted in Jacob N Muvengei v Speaker Nairobi City County Assembly, and its own holding in Dr. Kizito Lubano v KEMRI that a body performing only its statutory duty need not be joined. The Court found no specific claim against the 2nd Respondent beyond its report; termination was effected solely by the 1st Respondent. Distinguishing the Supreme Court's Trusted Society of Human Rights Alliance decision on facts, the Court held the 2nd Respondent's joinder unnecessary and allowed the application, expunging the 2nd Respondent from the record. Because the 2nd Respondent acted in the public interest in its statutory duty, it was denied costs; costs were ordered to be in the cause. Judgment delivered on 31st March 2016 by M. Mbaru, Judge.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the 2nd Respondent (Central Bank of Kenya) is wrongly joined as a party to the employment claim and whether the suit against it should be struck out
  2. 2.Whether the joinder of the 2nd Respondent is necessary to enable the Court effectually and completely adjudicate upon the dispute

Key legal issues

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01

Whether the Central Bank of Kenya was a necessary and proper party to the unfair termination claim

Holding

The joinder of the 2nd Respondent was not necessary; the termination was effected solely by the 1st Respondent and the dispute can be completely adjudicated without the 2nd Respondent

Reasoning

The Court found the only connection between the Claimant and the 2nd Respondent was an inspection report with recommendations made in the course of the 2nd Respondent's statutory mandate. The act of termination and its reasons were entirely the 1st Respondent's. Without the termination letter the report would not have arisen. Applying Order 1 rule 10(2) of the Civil Procedure Rules, the 2nd Respondent's presence was not necessary for complete adjudication, and it was distinguished from the Supreme Court's Trusted Society case on facts.

p. 2
02

Whether the 2nd Respondent should be awarded costs for being wrongly enjoined

Holding

Costs were refused because the 2nd Respondent acted in the public interest in performance of its statutory duty

Reasoning

Although the application succeeded, the Court noted the CBK carried out its statutory supervisory function over the 1st Respondent and issued the report in the public interest. The Court reasoned that awarding costs would discourage statutory bodies from performing their mandates, so the ordinary consequence of successful striking-out (costs) was withheld and costs were left in the cause.

p. 1

Legal principles established

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  • A stranger to an employment contract whose statutory report merely preceded termination is not a necessary party to a suit for unfair termination
  • Joinder must be necessary to enable the Court effectually and completely adjudicate upon the matter
  • Each joinder case must be decided on its own facts and remedies sought
  • A party performing its statutory duty in the public interest should not be condemned with costs

Court orders

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  1. 1.Application dated 26th June 2015 allowed
  2. 2.The 2nd Respondent (Central Bank of Kenya) is expunged from the records herein
  3. 3.Costs shall be in the cause

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act; Articles 41 and 159(d) of the Constitution invoked by the Claimant

Relief refused

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Dismissal of the entire suit with costs against the 2nd Respondent

The Court only expunged the 2nd Respondent and declined to award it costs since it was acting in its statutory/public duty

p. 3

Costs

Costs shall be in the cause; the 2nd Respondent, having acted in its statutory duty in the public interest, should not claim costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Save for the report made by the 2nd Respondent with recommendations to the 1st respondent, I find no specific claim(s) against the 2nd respondent.
p. 2Necessary party test
The presence of the 2nd Respondent before the Court is not a necessary party that will prevent the Court from effectively addressing the issue(s) in dispute completely for the adjudication of the same.
p. 3Joinder - necessity
Had the 1st Respondent not issued the letter of termination dated 14 th July 2014, the report of the 2nd Respondent would not have arisen herein.
p. 2Causation of claim
each case must be looked at in its facts and remedies sought and despite the position in the case of Supreme Court in Trusted Society of Human Rights Alliance, the facts relevant herein are totally different from that case.
p. 3Distinguishing precedent
Application dated 26th June 2015 allowed. The 2 nd Respondent is expunged from the records herein. Costs shall be in the cause.
p. 3Final orders

Issues in the judgment

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minor

The cause number of this suit is not stated anywhere in the judgment text

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, "Lucas Otieno Ondong v Equitorial Commercial Bank Limited & another [2016] KEELRC 1838 (KLR)", Case Analysis (2016). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1838/eng@2016-03-31

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