Adoyo & 6 others v De La Rue Currency & Security Limited [2023] KEELRC 1841 (KLR)

Adoyo & 6 others v De La Rue Currency & Security Limited (Cause E1051 of 2021) [2023] KEELRC 1841 (KLR) (6 July 2023) (Ruling)

Neutral citation: [2023] KEELRC 1841 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E1051 of 2021

BOM Manani, J

July 6, 2023

Between

John Adoyo

1st Claimant

Rose Nyamu

2nd Claimant

Stephen Ochieng

3rd Claimant

Joel Kaburu

4th Claimant

Edward Wekesa

5th Claimant

Abraham Akol

6th Claimant

Jefferson Mwakera

7th Claimant

and

De La Rue Currency & Security Limited

Respondent

Ruling

Introduction 1. This is a claim for unpaid dues following the termination of the claimants’ contracts of service. The claimants contend that on their release from employment in August 2019, the respondent did not pay the amounts due to them on account of banked hours which I understand to mean overtime dues.

2. The claim is contested by the respondent. It is the respondent’s case that the claimant’s were not its employees at the time they were declared redundant.

The Application to Strike out the Suit 3. After entering appearance in the cause, the respondent moved the court through the application dated December 2, 2022 seeking to strike out the suit. The basis for the application is that the respondent has been wrongly sued.

4. The respondent contends that it was not the claimants’ employer in August 2019 when their positions were allegedly declared redundant. The respondent further contends that at the time of the alleged redundancy, the claimants were employees of De La Rue Kenya EPZ Limited.

5. The respondent states that although the claimants were initially its employees, their services were terminated in April 2019 when it transferred its business venture to De La Rue EPZ Kenya Limited. According to the respondent, De La Rue Kenya EPZ Limited not only took over its business but its employees as well.

6. The respondent states that on February 2, 2017, the claimants were individually notified of the proposed transfer of their services to De La Rue Kenya EPZ Limited. This transfer was to take effect as soon as the business transfer between the respondent and De La Rue Kenya EPZ Limited was concluded. It is the respondent’s position that the claimants subsequently entered into contract of employment with De La Rue Kenya EPZ Limited effectively closing their relation with the respondent.

7. It is the respondent’s case that under the takeover arrangement, De La Rue Kenya EPZ Limited assumed the responsibility of settling all outstanding benefits for employees who were transferred to it. The respondent insists that since the two companies are distinct and the arrangement aforesaid took effect, the claimants cannot maintain the current action against it.

8. The respondent further argues that in any event, the redundancy process was undertaken by De La Rue Kenya EPZ Limited. As such, the current suit against the respondent is misconceived and should be struck out.

9. The claimants have opposed the application. According to them, the respondent is simply trying to evade responsibility for their claim.

10. The claimants contend that during the currency of their engagement, the respondent kept changing its names in an alleged attempt to evade its obligations. They aver that the change to De La Rue Kenya EPZ Limited is just one of such attempts.

11. The claimants admit signing some documents indicating that they were to transit to De La Rue Kenya EPZ Limited. However, they deny that the actual transfer ever crystallized.

12. According to the claimants, they did not sign employment transfer contracts with De La Rue Kenya EPZ Limited. All documents that were executed were between them and the respondent. Therefore, it is not true that there was a transfer of their services to De La Rue Kenya EPZ Limited as asserted by the respondent.

Analysis 13. There is no doubt that the respondent is a distinct legal entity from De La Rue Kenya EPZ Limited. As a matter of fact, the official searches issued by the Registrar of Companies and attached to the affidavit in support of the application confirm this fact.

14. It is also apparent that although the claimants were initially employed by the respondent, they entered into subsequent contracts of service with De La Rue Kenya EPZ Limited. This fact is evident from the fact that as at August 2019 the claimants were on the pay roll of De La Rue Kenya EPZ Limited.

15. The pay slips that are annexed to the affidavit in support of the respondent’s application show that the claimants were serving as employees of De La Rue Kenya EPZ Limited with definitive staff numbers as more particularly set out here below:-a.John Adoyo - staff No 3079. b.Rose Nyamu – staff No 3084. c.Stephen Ochieng – staff No 3100. d.Patrick Joel Kaburu – staff No 3091. e.Edward Wekesa – staff No 3021. f.Abraham Akol Ekai – staff No 3095. g.Jefferson Mwakera – staff No 3097.

16. Although the claimants deny that the transition of their employment from the respondent to De La Rue Kenya EPZ Limited ever crystallized, the pay slips attached to the affidavit in support of the application suggest otherwise. The pay slips were issued to the claimants under the name of De La Rue Kenya EPZ Limited. Besides, there are the various petty cash requisitions for every of the claimants that were prepared around August 21, 2019 attached to the affidavit in support of the application. The documents were prepared by De La Rue Kenya EPZ Limited and bear the individual names of the claimants.

17. In their response to the application to strike out the suit, the claimants do not deny that the payments shown in the petty cash vouchers and pay slips were made to them as employees of De La Rue Kenya EPZ Limited. They do not contest the staff numbers allocated to them by De La Rue Kenya EPZ Limited. And neither do they suggest that the documents are fraudulent. All that they do is to make a general denial of employment with De La Rue Kenya EPZ Limited.

18. Although there are no written contracts of employment between the claimants and De La Rue Kenya EPZ Limited to indicate when they entered into the employment relation, there are documents which confirm that the claimants and De La Rue Kenya EPZ Limited had an employment relation as at August 2019 when the latter issued the notice of termination of the contracts on account of redundancy. These include pay slips and petty cash vouchers. The mere absence of written contracts of service between the claimants and De La Rue Kenya EPZ Limited does not necessarily negate the fact that they had an employment relation.

19. It is true that the various contracts signed between the claimants and the respondent in February 2017 did not establish employment relations between the claimants and De La Rue Kenya EPZ Limited. However, the instruments constitute agreements between the claimants and the respondent regarding how they were to handle their employment relations going forward. They agreed that the claimants’ employment services were to be transferred to De La Rue Kenya EPZ Limited once the joint venture between De La Rue Kenya EPZ Limited, Thomas De La Rue AG and Treasury of the Republic of Kenya was completed.

20. The pay slips and petty cash vouchers referred to earlier and which have not been challenged by the claimants demonstrate that the claimants and De La Rue Kenya EPZ Limited eventually sealed individual employment contracts whether written or oral. Therefore, the arrangement between the claimants and the respondent expressed in their agreements signed in February 2017 took effect. Once they took up employment with De La Rue Kenya EPZ Limited as evidenced from their respective pay slips, the claimants’ employment status shifted from one between them and the respondent to one between them and De La Rue Kenya EPZ Limited.

21. In their affidavit opposing the application to strike out the suit, the claimants rubbish the respondent’s averment that the two (respondent and claimants) had no employment relation when the claimants’ positions were declared redundant in August 2019. To support their argument, the claimants aver that as at August 2019, the respondent had not left the premises where the parties had hitherto been operating from. Further, they point out that one Ian Davies who is an official of the respondent was the same individual who purported to issue them with the redundancy notice allegedly on behalf of De La Rue Kenya EPZ Limited. The claimants contend that this corroborates their position that the respondent was still in charge of their workplace and therefore their employment. Therefore, the assertion by the respondent that the parties were no longer in an employment relation at the time the redundancy notices issued is a sham.

22. With respect, I do not agree. The fact that the parties never relocated from the premises where they had been working to some other location counts for nothing. Similarly, the fact that Ian Davies is associated with the respondent does not mean that he could not have been acting for De La Rue Kenya EPZ Limited when he issued the redundancy notices. The fact of the matter is that in law, the respondent and De La Rue Kenya EPZ Limited are distinct entities.

23. There is ample evidence to demonstrate that in August 2019 when the claimants allege that their contracts of employment were irregularly terminated, they were in the employment of De La Rue Kenya EPZ Limited with distinct pay roll numbers. There is evidence that the redundancy notice of August 13, 2019 was issued under the hand of an individual who held himself out as acting on behalf of De La Rue Kenya EPZ Limited. There is no evidence that the impugned redundancy process was triggered by the respondent. Consequently, the action against the respondent is unwarranted.

24. It is not only unnecessary but also oppressive to the respondent to maintain this action in its current form. The claimants ought to have instituted the proceedings against De La Rue Kenya EPZ Limited, their employer as at August 2019.

Determination 25. The upshot is that I find that the respondent’s application dated December 2, 2022 is merited.

26. Accordingly, I strike out the suit as prayed.

27. I make no order as to costs.

Dated, signed and delivered on the 6th day of July, 2023B. O. M. MANANIJUDGEIn the presence of:…………. for the Applicant………………for the RespondentORDERIn light of the directions issued on 12thJuly 2022 by her Ladyship, the Chief Justice with respect to online court proceedings, this decision has been delivered to the parties online with their consent, the parties having waived compliance with Rule 28 (3) of the ELRC Procedure Rules which requires that all judgments and rulings shall be dated, signed and delivered in the open court.B. O. M MANANI3