Muthama v Tetra Pak Limited & another [2024] KEELRC 1254 (KLR)

Muthama v Tetra Pak Limited & another (Cause 324 of 2017) [2024] KEELRC 1254 (KLR) (3 May 2024) (Judgment)

Neutral citation: [2024] KEELRC 1254 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause 324 of 2017

MA Onyango, J

May 3, 2024

Between

Charles Muthama

Claimant

and

Tetra Pak Limited

1st Respondent

Tetra Pak International Sa

2nd Respondent

Judgment

1. The Claimant avers that he was previously employed by the 1st Respondent and later seconded and transferred to the 2nd Respondent as an expatriate.

2. The 1st Respondent is a limited liability company duly incorporated in Kenya while the 2nd Respondent is a Swiss Corporation having its registered offices in Switzerland and incorporated in Kenya under the 1st Respondent.

3. Vide an Amended Statement of Claim dated 8th November 2021, the Claimant seeks the following Orders:i.A declaration that the Dissolution Agreement made on the 2nd April 2003 between the Claimant and the 2nd Respondent is null and void.ii.A declaration that the Claimant was and has been discriminates by the Respondents.iii.General and Special damages for breach of employment contract, misrepresentation and discrimination.iv.6 months’ salary for period January 2001 to June 2002 together with interests from June 2002. v.12 months’ salary as compensation for unlawful and unfair terminationvi.Costs of this suit plus interests at court rate until payment in full.

4. The Claimant avers that on or about 14th July 1998, he was employed by the 1st Respondent as a training manager. He contends that on 3rd May 2001, the Claimant’s qualifications were recognized by Tetra Pak Group and he was thereafter seconded to work as an expatriate in Switzerland with the 2nd Respondent.

5. It is the Claimant’s case that the terms and conditions of his engagement with the 2nd Respondent were:a.The contract period as an expatriate was from 1st July 2001 to 31st March 2003 with a right to renew the contract for one or more years subject to agreement of the parties.b.At the end of the contract period, the Respondents were to identify a suitable new position for the Claimant with a TP Company.c.In the event (a) and (b) above were not possible then the Claimant would be entitled to the financial compensation to which he would have been entitled if he remained engaged with the 1st Respondent. Further, the Claimant would be entitled to relocation compensation.d.Payment of a monthly salary as follows;i.Basic salary………………Swedish Kroner 53,500ii.Gross salary………………Swedish Kroner 69,976iii.Allowances (House, transport, compensation) …..Swedish Kroner 21,441

6. According to the Claimant, in September 2020, the 2nd Respondent misrepresented to him that his contract was to be renewed and that as a result of said misrepresentation, he ended up frustrated, inconvenienced and suffered loss as he had to hurriedly make arrangements to relocate back to Kenya after learning that his contract was not to be renewed.

7. It is the Claimant’s case that on 2nd April 2003, he executed a dissolution agreement under duress, undue influence, coercion, pressure and accordingly the Claimant avers that the said agreement is null and void.

8. The Claimant further states that during the time he worked with the Respondents, he was discriminated against as he had no single discussion with his manager on career plan, performance appraisal or skills development programme; that whereas the Claimant was engaged for cluster 6 work, he was never allocated such work; that the Respondents had a deliberate scheme to exploit Kenyans by sending them outside the country and thereafter disengaging them; that since the 1st Respondent was established in Kenya, it has never allowed any Kenyan to climb to the position of factory manager yet there are qualified Kenyans for such a position.

9. The Claimant therefore in his Statement of Claim sought the following reliefs:a.A declaration that the Dissolution Agreement made on the 2nd April 2023 between the Claimant and the 2nd Respondent is null and voidb.A declaration that the Claimant was and has been discriminated by the Respondentsc.General and special damages for breach of employment contract, misrepresentation and discriminationd.6 months’ salary for period January 2001 to June 2002 together with intereste.12 months’ salary as compensation for unlawful and or unfair terminationf.Costs of this suit plus interest at court rate until payment in full.

10. The 1st Respondent filed its Statement of Defence dated 15th December 2005 on 16th December 2005. In that defence, the 1st Respondent denied the averments made by the Claimant in amended memorandum of claim and contended that it employed the Claimant with effect from 15th September 1998 pursuant to a written contract dated 17th July 1998. It however avers the said employment came to an end by the consent of the parties thereto when the Claimant entered into a separate employment contract on 5th June 2001 with a different party namely, Tetra Pak Information Management AB.

11. The 1st Respondent states that any employment agreement entered into by the Claimant on 5th June 2001 was not with it and that as such, it is not legally responsible for any aspect thereof.

12. The court was urged to dismiss the claim with costs.

13. The 2nd Respondent entered appearance in protest but did not file a Response to the Amended Statement of Claim.

The Evidence 14. At the hearing of the case, the Claimant testified as CW1. He adopted his witness statement filed in court on 17th September 2018 as his evidence in chief and relied on the documents he filed in court in support of his case.

15. The Claimant stated that he stated his career as a police constable then joined DHL where he worked in Europe and throughout Africa. He avers that the 1st Respondent head hunted him from DHL where he was HR, Project and training and appointed him as a Training and Development Manager at a salary of Kshs. 267,000 per month on permanent and pensionable terms.

16. The Claimant states that in 2000, he applied for an internally advertised position within the 2nd Respondent’s company and after successfully passing a series of interviews on the phone and physically in Sweden, he was offered the position of Organization Alignment Specialist by Tetra Pak International S.A of Lausanne, Switzerland and seconded to Tetra Pak AB Sweden. The Claimant states that he moved to Sweden as an expatriate.

17. He also stated that he was never paid his salary between January and June 2001.

18. CW1 told the court that the contract period as an expatriate employee was from 1st July 2001 to April 2003 and was governed by Tetra Pak’s Policies and Procedures for Expatriates and International Employees which was to the effect that, expatriation should be a positive move in the employer’s career and that at the end of the contractual period, subject to the agreement of both parties, the contract will be renewed for one or more years.

19. It was the Claimant’s testimony that when he assumed his new posting in Sweden on 1st July 2001, the 1st Respondent facilitated his travel as he was an employee of the 1st Respondent proceeding on an international assignment as given to him by the 2nd Respondent.

20. He avers that he worked until August 2002, when he inquired from his manager about the possibility of his contract being renewed and was assured that his contract would be renewed and that he would be relocated to Mexico.

21. He states that from November 2002, none of his managers would give him a clear and definite word about the renewal or non-renewal of his contract or repatriation back to Kenya, that he was not assigned any work and was asked to leave two team meetings which he had been invited to with his team mates.

22. The Claimant states that he was given a dissolution agreement on 2nd April 2003, which he signed under duress, undue influence, coercion and pressure, and that the effect of the agreement was to rescind the initial International Service Agreement dated 3rd May 2001 on allegations of redundancy by the 2nd Respondent.

23. The Claimant contends that he was confused since he had legitimate expectations that his contract would be renewed.

24. On cross examination, the Claimant stated that the contract he entered into of 1st July 2001 was with regard to a Swiss company and not a Kenyan company. The Claimant admitted that the International agreement he entered into had terms that were subject to Swiss laws.

25. CW2 was Weveti Nyagah who adopted her witness statement filed in support of the Claimant’s case as her evidence in chief.

26. CW2 told the court that she knew that Claimant after the Claimant recruited her to work under him in 2001. She stated that she was employed as Human Resource Attachee in the Claimant’s department and that she was recruited so that she would handle his docket for a period of 6 months as the Claimant was travelling to Sweden.

27. On cross examination, CW2 told the court that during the period she was with Tetra Pak company, she never saw any documentation relating to the Claimant’s travel to Sweden.

28. At the Close of the Claimant’s case, the 1st Respondent’s counsel Mr Ojiambo informed the court that he will not call any witness but would rely on the documents on record.

29. The court then directed the parties to file written submissions.

The Claimant’s submissions 30. In his submissions dated 28th September 2022, the Claimant submitted that he was constructively dismissed from employment as he was frustrated by the Respondents in terms of humiliation, racial profiling and discrimination. It is contended that with the legitimate expectation that his contract would be renewed, he was coerced to sign a dissolution agreement. The Claimant submitted that the Respondent frustrated the Claimant and that the dissolution agreement and lack of a job opening back in Kenya were meant to constructively terminate the Claimant from employment.

31. The Claimant also submitted that he worked for the 1st Respondent as a permanent and pensionable employee before he was seconded to the 2nd Respondent to a position that had been internally advertised. The Claimant cited the case in Nairobi ELRC Cause No. 1352 of 2016 between Willian Njoroge vs Versus Kenol Kobil Limited where the court established a parent-subsidiary relationship of the oil company in Kenya and Rwanda.

32. On the prayer for compensation for the unlawful termination, the Claimant submitted that he worked for the Respondents in a senior position earning Kshs 250,000 from the year 1998 to 2003 when he was unlawfully terminated.

33. The court was urged to enter judgment for the Claimant as prayed in the Amended Statement of Claim and award damages for unfair termination of employment equivalent to a period of twelve months together with costs and interests.

The Respondents’ submissions 34. The 1st Respondent submitted that the 1st and 2nd Respondents are entirely different, separate and distinct entities as evidenced by the documents produced by the Claimant. That the employment out of which the Claimant complaints is not the one that was entered into by the 1st Respondent but the one commenced on 1st July 2001 with the 2nd Respondent.

35. It is therefore the 1st Respondent’s case that it was a stranger to the employment created by the contract of 5th July 2001 and was clearly erroneously included in this suit. That the Claim against it should be struck out for misjoinder.

36. The 1st Respondent also raised an issue on jurisdiction and maintained that firstly, the claim against the 1st Respondent is premised on an employment contract between the Claimant and the 2nd Respondent which the 1st Respondent is not privy to. Secondly, that the claim against the 2nd Respondent is essentially against a foreign corporate entity which is neither incorporated nor domiciled in Kenya. According to the counsel for the Respondents, the subject contract was governed by Swiss Law and was entered into mainly to be performed outside Kenya. It is the Respondents submission that the domestic courts of Kenya lack jurisdiction to determine any dispute between the parties in such contract. In support of this position, the following cases were cited; James Finlay (Kenya) Limited vs Elly Okongo Inganga&6 others (2019) eKLR, Miguna vs Lufthansa Group Operating as Lufthansa German Airlines & 6 others, Kenya National Commission on Human Rights & Another (Interested Parties) (2021) eKLR.

37. According to the 1st Respondent, the assumption that the court has assumed jurisdiction over the 2nd Respondent as a matter of right is misguided. It is submitted that to invoke jurisdiction, the Claimant had to comply with Order 5 Rule 21 of the Civil Procedure Rules (2010) which provides for service of summons outside the jurisdiction of the Court.

38. The 1st Respondent submitted that the principle that the requirement for leave to serve summons outside the jurisdiction of the court is a mandatory requirement before a court may assume jurisdiction over a foreign defendant.

39. It is the 1st Respondent’s case that the fact that the subject contract between the Claimant and the 2nd Respondent was governed by Swiss law by virtue of section 48 of the Evidence Act. It is submitted that the Claimant herein has not made any attempt whatsoever to lead evidence on the nature and effect of Swiss Law on the dispute in this case.

40. Lastly, the Respondents submitted that the suit before court is incompetent and premature for reasons that the Claimant’s employment letter contained an arbitral clause which provided that any dispute arising therefrom would be adjudicated only by an arbitral tribunal of three members in accordance with the arbitral rules of the Chamber of Commerce and Industry, Geneva, with the aid of the tribunal initially being in Lansame Switzerland.

41. It is the Respondent’s submission that the duty of the Court where a forum for dispute resolution has been chosen by parties to a contract to give effect to the clause. The cases in National Bank of Kenya Ltd vs Pipe Plastic Samkoli (K) Ltd & Another (2001) eKLR, Health & Water Foundation vs Intervita Onlus (2015) eKLR and Areva T 7 D India Limited vs Priority Electrical Engineers & Another (2012) eKLR were cited.

42. In the end, the 1st Respondent submitted that even if this court had jurisdiction to determine this claim, the claim is without merit and the prayers sought cannot be granted as the Claimant’s employment contract was a fixed term contract which ended by effluxion of time. In addition, the 1st Respondent submitted that the Claimant voluntarily signed a Dissolution Agreement dated 2nd April 2003 by which agreement he agreed to part ways with the 2nd Respondent in exchange for payment of dues which he was paid and duly accepted.

43. The 1st Respondent thus submitted that the Claimant is not entitled to the reliefs he is seeking in his Amended statement of Claim.

Analysis and Determination 44. Having considered the pleadings, the evidence of the parties as well as their submissions, I find the issues for determination to be:i.Whether the court has assumed jurisdiction over the 2nd Respondentii.Whether the Claimant has established a cause of action against the 1st Respondentiii.Whether the Claimant’s claim, is in any case, is merited

45. On the first issue, from the evidence on record, it is apparent that the Claimant was previously employed by the 1st Respondent and thereafter seconded to the 2nd Respondent, a constituent of the 1st Respondent.

46. The instant suit, from the pleadings and evidence on record, was filed by the Claimant after the 2nd Respondent allegedly terminated his employment. According to the Claimant, he had a legitimate expectation that his contract would be renewed after an agent of the Respondents intimated to him that upon the expiry of his contract with the 2nd Respondent, he would be retained and moved to work in Mexico.

47. On its part, the 1st Respondent avers that it was not a party to the agreement between the Claimant and the 2nd Respondent. The 2nd Respondent in the submissions filed on behalf of both Respondents contended that it is a foreign corporate entity which is neither incorporated nor domiciled in Kenya and further, that the subject contract was governed by Swiss Law and was entered into mainly to be performed outside Kenya. According to the 2nd Respondent, this court lacks jurisdiction to determine any dispute between the parties in such a contract.

48. In order to bring into context the dispute herein, it is important that I reproduce the Claimant’s contract of employment with the 2nd Respondent. It reads:Tetra Pak EMPLOYMENT CONTRACTTemporary EmploymentMade between Tetra Pak Information Management ABRuben Rausings gata221 86 LundAnd Charles Muthama, 641207Tetra Pak LtdEnterprise Road, Industrial AreaBox 78340Nairobi, KENYAWith conditions and terms as stated belowPosition Organisational Alignment Team MemberEmployee number 3653Department ISP Programme / cost centre 413800Reporting to Ian WhyteDuration of employment From 2001-07-01 to 2003-03- 31 with possibility to extend for one or more years if both parties agree.Salary You are entitled to an annual gross amount in SEK which equals to SEK 360 000 net after you have been compensated for costs for housing. Next salary review 2002-01-01. Working hours 40 hours, excluding lunch breakVacation 25 days per yearOvertime and business travel Shall be undertaken in accordance with the demands of the business and position. When travelling on Tetra Pak business the applicable conditions are stated in Tetra Pak’s travel policy plus Rules and regulations for cost compensation during businessCompensation for overtime No compensation for overtime.Other general conditions As stated in current collective agreement between the Swedish Employers Association and the Swedish Central Organisation of Salaried Employees as well as company specific local agreements, protection and work rule.Special agreements Car allowance (4400 SEK/ Month)This contract is drawn up in duplicate whereof each of the signing parties will receive one.Lund on the 5th of July 2001Tetra Pak/Information Management ABSigned SignedLennart Ljunggren Charles Muthama

49. A cursory examination of the above employment contract shows that it is an international contract governed by the Swiss Laws. Evidently, the Claimant was to work in Sweden which is outside this court's jurisdiction. In my view, the court cannot therefore assume jurisdiction.

50. On the second issue, the Claimant has sued the 1st Respondent on account of his previous engagement with it prior to his alleged secondment. According to the Claimant, he worked for the 1st Respondent as a permanent and pensionable employee before he was seconded to the 2nd Respondent. The Claimant urged the court to find that there existed a parent-subsidiary relationship between the 1st and 2nd Respondent.

51. Although the Claimant has averred that he was seconded by the 1st Respondent to work for the 2nd Respondent, in his testimony before court, he stated that the position at the 2nd Respondent was internally advertised and he was subjected to several interviews before he was issued with the offer letter.

52. No documentary evidence in form of a secondment letter or a separation agreement has been produced by the Claimant to show that there was an arrangement between himself and the 1st Respondent that he would be re-employed when his contract with the 2nd Respondent expired.

53. In my view, the Claimant accepted the employment offer by the 2nd Respondent and subjected himself to the terms and conditions of that contract which converted his employment terms to a fixed term contract. The 1st Respondent cannot therefore be held accountable for the alleged termination of employment by the 2nd Respondent which it was not a party to.

54. Consequently, I find that there is no valid cause of action against the 1st Respondent and in view of the finding that this court cannot assume jurisdiction over the 2nd Respondent, it follows that the prayers sought by the Claimant herein cannot issue.

55. In the end, I find the Claimant’s claim to be without merit and hereby dismiss it. There will be no orders as to costs.

DATED, SIGNED AND DELIVERED VIRTUALLY ONTHIS 3RD DAY OF MAY 2024MAUREEN ONYANGOJUDGE7NRB ELRC NO. 324 OF 2017 JUDGMENT