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ELRCDismissedNotice of Motion dated 22nd February, 2021 (Cause number not stated in judgment)

Direct Pay Limited v Marion Khasoa Stevens [2021] KEELRC 1486 (KLR)

Employment and Labour Relations Court
11 March 2021
2,535 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to force a former employee to leave a competitor, confirming non-compete clauses are rarely enforced against workers' right to earn a living.

What this practically means

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Executive summary

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Direct Pay Limited, the applicant, moved the Employment and Labour Relations Court by Notice of Motion dated 22nd February 2021 seeking a mandatory injunction compelling its former Product Manager to cease employment with Pesapal Limited, a direct competitor, pending the hearing and determination of arbitral proceedings. The applicant contended that the respondent had executed a 2018 addendum to her employment contract containing restrictive covenants including a non-compete clause, had access to highly sensitive proprietary business information, and had breached the covenant by joining Pesapal Limited. The respondent opposed the application through Grounds of Opposition and authorities, arguing that the orders would cause her abrupt loss of employment without any corresponding benefit, that no secrets or misuse of information were demonstrated, and that the restraint contravened fair labour practices under Article 41 of the Constitution and public policy. The court framed a single issue: whether a mandatory injunction should issue compelling the respondent to cease employment with a third party pending arbitration. It found no prima facie case, noting the addendum containing the non-compete clause was dated 13th March 2018 while employment ran only from 15th June 2020 to 13th August 2020, and that the application was filed over six months after employment ended. The court held that no employer should restrict an employee from seeking alternative employment except in demonstrated exceptional circumstances, that a restraint without a corresponding benefit offends fair labour practices and public policy, and that the applicant had sought no relief on disclosure of information. The application was dismissed with costs to the respondent.

Questions the Court framed

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

  1. 1.Whether the court should issue a mandatory injunction compelling the respondent to cease employment with a third party (Pesapal Limited) pending hearing of the arbitral proceedings to determine the dispute between the parties

Key legal issues

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01

Whether a mandatory injunction should issue compelling the respondent to cease employment with a competitor pending arbitration

Holding

No - the application failed for want of a prima facie case, delay of over six months, and because enforcing the non-compete restraint would offend fair labour practices and public policy

Reasoning

The court noted the addendum containing the non-compete clause was dated 13th March 2018 while employment ran only from 15th June 2020 to 13th August 2020, so the document's temporal scope did not support a prima facie case. The application was also filed over six months after employment ceased. Enforcing the restraint would deprive the respondent of her right to work and earn a living without a corresponding benefit, contrary to Article 41 fair labour practices, forced-labour prohibitions, and public policy. The applicant also sought no relief on disclosure of confidential information.

p. 4
02

Whether the restrictive covenant could justify keeping the respondent out of employment without a corresponding benefit

Holding

No - subjecting an employee to loss of employment on the basis of a restrictive clause is unreasonable and contrary to public policy in Kenya's context of unemployment

Reasoning

Relying on Credit Reference Bureau Holdings Limited v Steven Kunyiha, the court adopted the reasoning that enforcing a restraint clause would remove an employee from employment without any guarantee of re-employment after the restraint period, which is unreasonable and against public policy. The court also invoked the constitutional prohibition of forced labour, the Employment Act's outlawing of forced employment, the right to fair labour practices under Article 41, and the right to work under Article 15 of the African Charter read with Article 2(6) of the Constitution.

p. 3

Legal principles established

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  • A mandatory injunction at the interlocutory stage should not be granted in the absence of special circumstances, in a clear case, and where the matter ought to be decided at once
  • No employer should be allowed to restrict an employee from seeking alternative employment unless in very exceptional circumstances demonstrated to the court
  • Restraining an employee from working without a corresponding benefit would breach the right to fair labour practices under Article 41 of the Constitution and be contrary to public policy

Court orders

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  1. 1.The application dated 22nd February, 2021 is declined and dismissed
  2. 2.Costs of the application awarded to the respondent

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(1)(3)(i)(viii) of the Employment and Labour Relations Court Act; Rule 17 of the Employment and Labour Relations Court (Procedure) Rules; section 7(1) of the Arbitration Act and Rule 43 of the Arbitration Rules, 2020

Relief refused

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Mandatory injunction compelling the respondent to cease employment with Pesapal Limited pending hearing and determination of the application and of the arbitral proceedings

No prima facie case established; the non-compete addendum predated the employment; the application was filed over six months after employment ended; enforcing the restraint would offend fair labour practices and public policy

p. 4

Costs

Application dismissed with costs to the respondent

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.

Accordingly, for the reasons above, application dated 22 nd February, 2021 is declined and hereby dismissed with costs to the respondent. It is so ordered.
p. 4Final orders - dismissal of the application
As a principles, a mandatory injunction can be granted on an interlocutory application as well as at the hearing but should not be granted in the absence of special circumstances, in a clear case, and where the court finds this ought to be decided at once.
p. 3Threshold for mandatory injunction at interlocutory stage
no employer should be allowed to restrict an employee from seeking alternative employment unless in very exceptional circumstance and which must be demonstrated to the court.
p. 3Restraint of trade and right to work
To restrict the right to work would go contrary to fair labour practices, a right secured under Article 41 of the Constitution, 2010. Such an action would be contrary to public policy
p. 3Non-compete covenants and fair labour practices

Issues in the judgment

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minor

The judgment refers to Article 18 of the African Charter on Human and People's Rights for the right to work, but the right to work is under Article 15; Article 18 concerns the family

minor

The affidavit is attributed to 'Agnes Mwatha' but thereafter referred to as 'Ms Mwathi', an internal inconsistency in the name

minor

The judgment contains typographical errors, e.g. 'non-complete covenant' for 'non-compete covenant' and 'Rue 17' for 'Rule 17'

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, "Direct Pay Limited v Marion Khasoa Stevens [2021] KEELRC 1486 (KLR)", Case Analysis (2021). Notice of Motion dated 22nd February, 2021 (Cause number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1486/eng@2021-03-11

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