https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1640

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT ELDORET** **ELRC APPEAL NO. E032 OF 2025** *(Before Hon. Lady Justice Maureen Onyango)* **MARTIN MUKOLWE.…….....……………………………. APPELLANT** **VERSUS** **WESTERN STEEL MILLS LIMITED.....................RESPONDENT** **AND** **HERITAGE WORKFORCE LIMITED……INTERESTED PARTIES** *(Being an appeal against the judgment of the learned magistrate, Kimani Mukabi (PM) delivered on Eldoret Chief Magistrates Court, CMELRC No. E086 of 2021, Martin Mukolwe vs Western Steel Mills Limited & Heritage Workforce Limited)* **JUDGMENT** 1. The Appellant herein was the Claimant in Eldoret CMELRC No. E086 OF 2021 wherein he had sued the Respondent and the Interested Party vide a Statement of Claim dated 31st May 2021 seeking compensation for alleged unfair termination of his employment and for payment of his terminal dues. 2. Upon hearing the parties, the trial court delivered its judgment on 14th March 2025, finding the Interested Party liable for the Appellant's unfair termination. The Appellant was awarded one month's salary in lieu of notice, compensation equivalent to five months' salary for unfair termination, a certificate of service and costs of the suit. 3. The Appellant being dissatisfied with the said judgement instituted the instant appeal vide the Memorandum of Appeal dated 4th April 2025 on the following grounds of appeal: 4. That learned Magistrate erred in law and fact and rendered a decision that allowed the Appellant's Claim Against the Interested Party Heritage Workforce Limited, but declined the Appellant's Claim against the Respondent, Western Steel Mill Limited. 5. The learned Magistrate erred in law and fact and failed to hold both the Respondent and the Interested Party jointly and severally liable for the accident herein. 6. The learned Magistrate erred in law and fact by failing to act judiciously and hence failing to properly appreciate the facts of this case and the employment law as envisaged under section 2 of the Employment Act which defines an employer to include but not limited to any person, public body, firm, corporation or company who or which has entered into a contract of service to employ any individual and includes the agent, foreman, manager or factor of such person, public body, firm, corporation or company. 7. The learned Magistrate erred in law and fact by failing to act judiciously and hence failing to properly appreciate the fact that the Respondent was expressly liable for the unfair dismissal herein by virtue of being the principle and that the Interested Party herein was only vicariously liable in that regard. 8. The learned Magistrate erred in law and fact by misapprehending the evidence on record and applying the wrong principles of law and rendered a decision that is incompetent and not supported by evidence and law. 9. The learned Magistrate erred in law and fact by misapplying the provisions of the employment law and/or procedural law as envisaged under the provisions of Order 1 Rule 7 of the Civil Procedure Rules 2010 whereby the Claimant/Appellant is entitled to enjoin two or more defendants and rendered a decision that is incompetent and not supported by law. 10. The learned Magistrate erred in law and fact by failing to act judiciously appreciate the fact and hence failing to properly Claimant was jointly and severally employed by both the Respondent and the Interested Party. 11. The learned Magistrate erred in law and fact in dismissing the Claimant's/Appellant's claim against the Respondent in total disregard of the provisions of the Constitution, the statutory law, the Employment law, the Case Law and the submissions tendered therein. 12. Consequently, the Appellant prayed for this Appeal be allowed and the judgment dismissing the Appellant’s claim against the Respondent be set aside and the Honourable Court be pleased to order that:- 13. That the Respondent, Western Steel Mills Limited and the Interested Party, Heritage Workforce Ltd be held jointly and severally liable for the unfair dismissal of the Appellant from the employment. 14. The Respondent be condemned to pay the costs of the instant appeal. **Analysis** 1. This being a first appeal, this Court has the duty to analyze and re-examine the evidence adduced in the lower Court and reach its own conclusion but to bear in mind that it neither saw nor heard the witnesses testify and make due allowance for that as was held in the case of [***Abok James Odera T/A A.J Odera & Associates v John Patrick Machira T/A Machira & Co. Advocates***](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/judgment/keca/2013/208)***[2013] eKLR***. 2. Vide his Statement of Claim dated **31st May 2021,** the Claimant (now the Appellant) averred that at all material times to the suit, the Interested Party was the employing agency and agent of the Respondent. 3. The Claimant stated that he was employed by the Respondent and the Interested Party in April 2016 as a Quality Control at a monthly salary of Kshs. 15,736. 4. It was the Claimant’s case that he diligently and faithfully served the Respondent and the Interested Party until 19th February 2020, when his employment was summarily terminated unfairly and without payment of his terminal dues. 5. The Appellant therefore sought to be paid his terminal dues which he particularized as follows: - 6. Unpaid House Allowance from April 2016 to February 2020……………………………………………....Kshs. 144,771.20 7. Service benefits……………………………..………..Kshs. 31,472 8. One month salary in lieu of notice…..………Kshs. 18,883.20 9. Compensation for unfair termination………Kshs. 226,598.40 10. NSSF remittance………………………………………Kshs 18,400 11. NHIF remittance……………………………………….Kshs 23,000 **Total ………………………………………………Kshs. 463,124.20** 12. **Loss of future earnings………………………….Kshs 6,042,624** 13. The Appellant further sought the following reliefs:- 14. A declaration that the summary dismissal of Claimant from his permanent employment, by the Respondents was malicious, unlawful, unfair, unprocedural and a fundamentally violated the rights of the Claimant. 15. A declaration that the Claimant was entitled to House Allowance 16. A declaration that the Claimant is entitled to one month salary in lieu of annual leave. 17. A declaration that the Claimant is entitled to National Social Security Fund (NSSF) and National Hospital Insurance Fund (NHIF), for the period worked. 18. A declaration that the Claimant is entitled to his dues, compensation, damages, and benefits as a result of wrongful dismissal from the employment as calculated herein. 19. An award of a maximum compensation of 12 months as per Section 49 (c) of the Employment Act and Section 12 of the Employment and Labour Relations Court Act 20. Damages and terminal dues as per the calculations under paragraph above 21. Loss of Earning of salary for a period of 32 years that the claimant would have worked until the statutory retirement age of 60 years. 22. A Certificate of Service as per section 51 of the Employment Act 23. Costs of this suit from the date of filling until its full determination. 24. The claim is allowed in entirety. 25. Any other and/ or further relief as the court deems fit and just to grant. 26. In response, the Respondent filed a Response to Statement of Claim dated **19th May 2023 and averred that there exists no employment relationship between the Respondent and the Claimant and that as such, the Respondent could not have dismissed the Claimant from employment.** 27. The Respondent urged the trial court to dismiss the Claim against it with costs. 28. The record shows that the Interested Party did not participate in the proceedings before the trial court. **The Evidence adduced** 1. At trial, the Appellant testified as **CW1** and adopted his witness statement recorded on **31st May 2021 as his evidence in chief**. He also relied on the documents he filed in court in support of his claim. 2. Upon cross-examination, the Appellant stated that he was employed by the Respondent and that the Interested Party was the Respondent’s agent. He stated that he was paid his salary by the Interested Party. 3. The Respondent called **its Human Resource Manager, Michael Njuguna who testified as RW1. RW1** adopted his witness statement dated **11th** July 2023 as his evidence in chief. 4. On cross-examination, RW1 stated that the Claimant worked for the Interested Party at the Respondent’s premises. He also contended that the Interested Party does not own any factory. 5. Upon hearing the parties, the trial court delivered its judgment on **14th March 2025**, finding the **Interested Party liable** while exonerating the **Respondent from liability.** The Appellant was awarded **one month's salary in lieu of notice**, **five months' salary as compensation for unfair termination**, a **certificate of service**, and **costs of the suit** 6. It is that judgment which is the subject of the present appeal. **The Appeal** 1. The appeal was disposed of by way of written submissions. Both parties filed their submissions. The Appellant’s submissions are dated 11th May 2026 while the 1st Respondent’s submissions are dated 16th March 2026. ***Appellant’s submissions*** 1. In his submissions, the Appellant submitted that the trial court erred in holding the Interested Party solely liable for the unfair termination of his employment to the exclusion of the Respondent. According to the Appellant, in attributing liability solely to the Interested Party, the trial court misapprehended the evidence on record and consequently misapplied the applicable principles of law. 2. The Appellant submitted that the Respondent's witness (RW1) testified that both the Respondent and the Interested Party were involved in the Appellant's employment and that as such, both entities ought to have been held jointly and severally liable for the unfair termination of his employment. 3. The Appellant further submitted that although the Respondent denied being his employer, its witness, **Michael Njuguna (RW1),** admitted that the Respondent had contracted the Interested Party, to recruit and provide manpower on its behalf. 4. Further, the Appellant submitted that RW1 admitted that although the Appellant was formally employed by the Interested Party, he worked at the Respondent's premises and performed duties for the Respondent. The Appellant contended that while the Interested Party deployed the workforce, the deployed employees were under the Respondent’s control and supervision. It is the Appellant’s submission that although the Interested Party engaged the Appellant, such engagement was undertaken for the benefit of the Respondent, which, together with the Interested Party, employed, supervised and remunerated the Appellant. 5. On this basis, the Appellant submitted that the Interested Party acted as an agent of the Respondent and that the Respondent, as principal, was liable for the acts of the Interested Party. 6. The Appellant therefore asserted that both the Respondent and the Interested Party were jointly and severally liable for the unfair termination of the Appellant's employment. In support of this position, reliance was placed on the decisions in ***David Njuguna Ngotho v Family Bank Limited & Another (2018) eKLR*** *and* ***Karanja v Phoenix of East Africa Assurance Company Limited (1991) eKLR****.* 7. In the end, the Appellant urged the Court to set aside the judgment of the trial court, and to hold the Respondent liable together with the Interested Party for the reliefs awarded. ***The Respondent’s submissions*** 1. On its part, the Respondent contended that the Appellant's case before the trial court was hinged on establishing the existence or otherwise of an employment relationship between the Appellant, the Respondent and the Interested Party. 2. The Respondent submitted that the Appellant produced an NSSF Statement (Claimant's Exhibit 1) which expressly indicated the Interested Party as his employer. It was further submitted that section 19(1)(f) of the Employment Act permits an employer to deduct from the wages of an employee any amount authorised by law and that the documentary evidence produced before the trial court pointed to the Interested Party as the employer of the Appellant. 3. The Respondent maintained that although the Appellant alleged the existence of an agency relationship within the meaning of section 2 of the Employment Act, the evidence adduced before the trial court pointed only to the Interested Party as the Appellant’s employer. 4. It is the Respondent’s submission that where an agency relationship or a master-servant relationship exists, it would ordinarily be expected that the alleged agent would take positive steps to protect the interests of its principal, including entering appearance and defending proceedings brought against it. The Respondent submitted that such a relationship is often manifested through common legal representation so as to avoid a situation where the interests of the principal are prejudiced. 5. The Respondent argued that the Appellant failed to adduce any evidence demonstrating that the Interested Party was an agent, manager, foreman or servant of the Respondent. 6. The Respondent further submitted that it is trite law that parties are bound by their pleadings and the evidence adduced in support thereof. In support of this proposition, reliance was placed on ***Nyane v Western Steel Mills Ltd & Another (Employment and Labour Relations Cause No. 156 of 2017) [2024] KEELRC 13396 (KLR) (11 December 2024) (Judgment).*** 7. The Respondent maintained that the burden rested upon the Appellant to prove, on a balance of probabilities, that the Respondent was jointly liable as an employer of the Appellant. 8. It was submitted that having failed to discharge that burden to the requisite standard, the Appellant's claim against the Respondent could not succeed insofar as it alleged the existence of an employment relationship between the Appellant and the Respondent. 9. The Respondent further submitted that RW1 testified before the trial court that the relationship between the Respondent and the Interested Party was that of an independent contractor and client, as opposed to one of principal and agent or master and servant. According to the Respondent, the extent of the relationship between the two entities was that the Interested Party independently recruited and remunerated its employees, as evidenced by Claimant's Exhibit 1, while the employees performed their duties at the Respondent's premises under the supervision of the Interested Party. 10. The Respondent submitted that where no principal-agent or master-servant relationship exists, a party cannot be held jointly liable for the unlawful or procedurally unfair acts of another. Reliance was placed on ***Board of Governors St. Mary's School v Boli Festus Andrew Sio [2020] KECA 952 (KLR).*** 11. The Respondent further submitted that, pursuant to section 2 of the Employment Act, the Interested Party, being a body corporate, was entitled to hire and engage its own employees and that nothing in law prohibited it from doing so. 12. In response to the Appellant’s averment that the learned magistrate erred in law and fact by misapplying employment law and Order 1 Rule 7 of the Civil Procedure Rules, 2010, the Respondent submitted that the law does not operate in a vacuum and that the Appellant had failed to specifically identify the provisions of employment law allegedly misapplied by the trial court. According to the Respondent, since parties are bound by their pleadings, the court could not be expected to interpret unspecified or blanket provisions of the law. 13. The Respondent further submitted that the mere joinder of two or more defendants under Order 1 Rule 7 of the Civil Procedure Rules does not automatically result in judgment being entered against all defendants as liability must be determined on the basis of the evidence adduced by the parties. 14. The Respondent reiterated that the main issue before the trial court was whether the Appellant had proved his case on a balance of probabilities so as to warrant a finding of liability against both the Respondent and the Interested Party and that although the Interested Party was accorded an opportunity to defend the suit, it failed to enter appearance or participate in the proceedings. The Respondent maintained that in contrast, it entered appearance and filed a Response to the Statement of Claim in which it consistently maintained that no agency or master-servant relationship existed between it and the Interested Party as it was an independent contractor engaged to provide services. 15. Accordingly, the Respondent submitted that the only employment relationship established by the evidence was that between the Appellant and the Interested Party. 16. The Respondent thus submitted that the learned magistrate's determination was proper, lawful and firmly grounded on the pleadings, evidence and applicable legal principles. It was contended that the court could not go beyond the evidence on record in order to impose liability where none had been established. 17. This Court was urged to find that the appeal is devoid of merit and to dismiss it with costs. **Determination** 1. Having carefully considered the Record of Appeal, the rival submissions on the appeal and the applicable law, the issues that arise for determination are: - 2. **Whether the Respondent and the Interested Party were jointly and severally liable as employers of the Appellant** 3. **Whether the learned trial magistrate erred in dismissing the Appellant's claim against the Respondent.** ***Whether the Respondent and the Interested Party were jointly and severally liable as employers of the Appellant*** 1. It is common ground that the Appellant was engaged by the Interested Party and that his employment was terminated on 19th February 2020. Indeed, the trial court found the termination to have been unfair and entered judgment against the Interested Party awarding the Appellant one month's salary in lieu of notice, compensation for unfair termination, a certificate of service and costs of the suit. 2. The only question before this Court is whether the Respondent ought also to have been held liable jointly with the Interested Party for the said termination. 3. As can be deduced from the grounds of appeal, the Appeal herein is founded on the contention that the Interested Party acted as an employing agency or agent of the Respondent and that, by virtue of that relationship, both entities jointly employed the Appellant and should therefore be held jointly and severally liable for the unfair termination of his employment. 4. The Respondent, on the other hand, maintained that there existed no employment relationship between itself and the Appellant and that the Interested Party was an independent contractor engaged by the Respondent to provide manpower services. According to the Respondent, the Interested Party independently recruited, remunerated and managed its employees and was therefore solely responsible for any liability arising from the employment relationship. 5. Section 2 of the Employment Act defines an employer to include any person, public body, firm, corporation or company that has entered into a contract of service to employ an individual and further includes the agent, foreman, manager or factor of such person, public body, firm, corporation or company. 6. As already mentioned, the Appellant pleaded that the Interested Party was the employing agency and agent of the Respondent. However, beyond that assertion, no documentary evidence was produced demonstrating the existence of an agency relationship between the Respondent and the Interested Party. The Appellant did not place before the trial court any contract, agreement or other material from which such a relationship could be inferred. 7. The evidence on record instead shows that the Appellant's salary was paid by the Interested Party. Indeed, during cross-examination, the Appellant admitted that he was paid by the Interested party. Further, the NSSF statement produced before the trial court, at page 14 of the Record of Appeal identified the Interested Party as the Appellant’s employer. These factors point to the existence of an employment relationship between the Appellant and the Interested Party. 8. The Appellant nevertheless contended that because he worked at the Respondent's premises and performed duties for the Respondent, both entities should be deemed his employers. It is not disputed that the Appellant worked at the Respondent's premises. Indeed, RW1 testified that the Interested Party did not own a factory and that the Appellant worked at the Respondent's premises. 9. However, the mere fact that an employee performs work at the premises of another entity or that such work is undertaken for the benefit of that entity does not, without more, establish an employment relationship. Modern labour arrangements frequently involve outsourcing and the engagement of labour through independent contractors. In such circumstances, liability does not automatically attach to the recipient of the services unless it is demonstrated that the recipient exercised such control over the employee or otherwise assumed the obligations of an employer as to justify a finding of joint employment. 10. In the instant case I find no evidence that the Interested Party was an agent of the Respondent. ***Whether the learned trial magistrate erred in dismissing the Appellant's claim against the Respondent.*** 1. Having re-evaluated the evidence on record, I find no basis upon which this Court can interfere with the trial court's finding that the employment relationship existed between the Appellant and the Interested Party. The Appellant did not discharge the burden of proving that the Respondent was his employer or that the Interested Party acted as the Respondent's agent in relation to his employment. 2. Consequently, I find that the learned trial magistrate neither misapprehended the evidence nor misapplied the law in dismissing the claim against the Respondent while entering judgment against the Interested Party. 3. The appeal therefore lacks merit and is hereby dismissed. Given that the Respondent has successfully defended the appeal, it shall have the costs of the appeal. **DATED, DELIVERED AND SIGNED** **ON THIS 12TH DAY OF JUNE 2026.** **M. ONYANGO** **JUDGE**