Amalgamated Union of Kenya Metal Workers v Mashariki Motors Limited & 2 others [2021] KEELRC 1462 (KLR)
The bottom line
#A Kenyan court threw out a workers' claim for redundancy pay because it was filed six years too late — conciliation meetings don't freeze the deadline.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Who was the employer of the grievants
- 2.Whether there was unfair termination of employment
- 3.Whether the grievants should be issued with Certificates of Service
- 4.Whether the respondents should be fined pursuant to section 88 of the Employment Act and or section 82 of the Labour Relations Act
- 5.Who should meet the costs of the suit
- 6.Whether the suit is time-barred under section 90 of the Employment Act, 2007
Key legal issues
#Whether the suit was time-barred under section 90 of the Employment Act, 2007
The cause of action arose on 31st October 2008 but the suit was filed on 11th November 2014, six years later. Section 90 requires suit within 3 years. Conciliation before the Minister does not extend time. The suit is time-barred and the court lacks jurisdiction.
The court directed parties to address section 90 even though no party had raised limitation in the pleadings, holding that jurisdiction may be raised by the court sua sponte and must be decided forthwith. Relying on G4S Security Services, Rift Valley Railways and Attorney General v Andrew Maina Githinji, the court held that conciliation and parallel remedies do not suspend limitation. The claim having been filed six years after termination, the court was deprived of jurisdiction to grant any relief.
Who was the employer of the grievants
The 1st respondent, Mashariki Motors Limited, was the employer at all material times. It terminated the grievants' employment on redundancy grounds on 31st October 2008 and admitted owing terminal dues.
The termination letter was issued by the 1st respondent, which also admitted in its defence that it employed the grievants and owed them terminal dues, though it pleaded financial constraints. The 2nd respondent, despite shared directors and majority shareholding, is a separate legal entity, and no employment ever existed between the grievants and the 3rd respondent; the joinder of the 2nd and 3rd respondents was irregular.
Whether termination upon the joint venture/transfer to Bavaria Auto Limited amounted to unfair termination
The redundancy itself was valid; the grievants were offered new and separate employment by Bavaria Auto Limited. There was no unfair termination and no continuity of employment with any third party.
Applying Kenya Airways Ltd v Aviation & Allied Workers Union, redundancy based on operational requirements is a legitimate ground for termination if procedurally fair. The validity of the redundancy was not contested; only non-payment of dues was in dispute. Following Elizabeth Washeke v Airtel Networks, employees who accept new contracts with a new employer after notice cannot claim terminal dues from the new employer; the former employer remains liable for dues under section 40 of the Employment Act.
Whether the joint venture between the 2nd and 3rd respondents rendered them liable
No employment existed between the grievants and the 2nd and 3rd respondents and the joinder was irregular.
The joint venture agreement between Karuna Holdings and Simba Colt Motors was never signed and did not materialise; the BMW distributorship was acquired by Bavaria Auto Limited directly from BMW Group. The 3rd respondent did not employ the grievants. The 2nd respondent, though the majority shareholder in the 1st respondent, is a distinct legal entity with no liability for its debts. Consequently neither respondent is liable for the grievants' terminal dues.
Legal principles established
#- A question of jurisdiction must be decided forthwith once raised, whether by a party or by the court on its own motion
- Engagement in conciliation or other out-of-court dispute resolution does not stop time from running under section 90 of the Employment Act
- Upon redundancy and termination, terminal dues are payable by the former employer, not the new employer who offers fresh employment contracts
- Employment does not transfer by continuity to a third party; acceptance of a new contract creates a new and separate employment
Court orders
#- 1.The suit herein is struck out
- 2.Each party shall pay own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Article 162(2) of the Constitution establishing the Employment and Labour Relations Court; Employment and Labour Relations Court Act, 2011; Employment Act, 2007
Relief refused
#Payment of redundancy benefits and 12 months' compensation to the grievants as tabulated, plus interest
The suit was filed six years after the cause of action arose and is time-barred under section 90 of the Employment Act; conciliation does not stop time running
Certificates of service for the grievants
Not reached as the suit was struck out for lack of jurisdiction
Fines against the respondents under section 88 of the Employment Act and/or section 82 of the Labour Relations Act
Not reached as the suit was struck out for lack of jurisdiction
Costs
Each party shall pay own costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The claim herein was filed out of time. The court is denied jurisdiction to award as prayed. Accordingly, the suit herein is struck out. Each party shall pay own costs.
In this case, the cause of action with regard to termination of employment and non-payment of terminal dues arose on 31st October, 2008. At the time, the applicable law was the Employment Act, 2007 and under section 90, such cause of action ought to have been filed with the court within 3 years.
Time does not stop running on the commencement of reconciliation or other alternative dispute resolution mechanisms provided for under the Constitution or any other law.
It is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything.
no employment exists or existed between the grievants and these respondents. The joinder of these parties was irregular.
In such new employment, the employees cannot claim for the payment of their terminal dues from the new employer with regard to dues owe by the former employer.
Issues in the judgment
#The judge's name is printed as 'M. MBAR?' with an apparent typographical error in the delivery clause
The judgment refers to the dispute being reported and evidence of dues 'due to the 10 grievants' while only seven grievants are named in the issue in dispute
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Amalgamated Union of Kenya Metal Workers v Mashariki Motors Limited & 2 others [2021] KEELRC 1462 (KLR)", Case Analysis (2021). Cause No. 2001 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1462/eng@2021-02-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.