[2023] KEELRC 220 (KLR)
The court held that the applicant's right of access to justice under Article 48 of the Constitution would be impeded if he were barred from filing his claim for unfair termination within the statutory limitation period, simply because the 1st respondent is under administration. The Employment and Labour Relations...
Source-derived case information.
- Citation
- [2023] KEELRC 220 (KLR)
- Parties
- Applicant: Dan Munguti; Respondent: General Plastics Limited [under administration]; Respondent: PVR Rao [administrator]
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nairobi
- Jurisdiction
- Kenya
- Case Number
- Miscellaneous Application E143 of 2022
- Procedural Posture
- Miscellaneous Application / Ruling on Application for Leave to File Claim During Administration
- Outcome
- application allowed
- Judges
- J Rika
- Legal Topics
- Insolvency Administration, Leave to Sue, Unfair Termination, Access to Justice
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Dan Munguti
Applicant
General Plastics Limited [under administration]
Respondent
PVR Rao [administrator]
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Application for Leave to File Claim During Administration
Legal Issues
- 1 Whether the applicant requires leave under section 432 of the Insolvency Act to file a claim for unfair termination against a company under administration.
- 2 Whether the Employment and Labour Relations Court has jurisdiction to grant such leave, or if it is exclusively the High Court.
- 3 Whether denying leave would impede the applicant's constitutional right of access to justice.
Ratio Decidendi
The court held that the applicant's right of access to justice under Article 48 of the Constitution would be impeded if he were barred from filing his claim for unfair termination within the statutory limitation period, simply because the 1st respondent is under administration. The Employment and Labour Relations Court has jurisdiction to grant leave to file such claims, as its mandate covers employment and labour relations even in the context of insolvency. The court found that the administrator had not demonstrated how the mere filing of the claim would disrupt the administration process, nor had he considered the prejudice to the applicant if leave was denied. Accordingly, the court...
Court Disposition
application allowed
Orders
- Leave is granted to the applicant to file a claim against the respondents.
- The applicant shall file and serve his claim within 30 days of this ruling.
Full Case Text
Judgment text and source record
33 paragraphs
Munguti v General Plastics Limited [ under administration] & another (Miscellaneous Application E143 of 2022) [2023] KEELRC 220 (KLR) (31 January 2023) (Ruling)
Neutral citation: [2023] KEELRC 220 (KLR)
Republic of Kenya
In the Employment and Labour Relations Court at Nairobi
Miscellaneous Application E143 of 2022
J Rika, J
January 31, 2023
Between
Dan Munguti
Claimant
and
General Plastics Limited [ under administration]
1st Respondent
PVR Rao [administrator]
2nd Respondent
Ruling
1. The applicant is a former employee of the 1st respondent.
2. The 1st respondent was placed under the 2nd respondent’s administration, on January 14, 2020.
3. The applicant seeks leave under section 432 of the Insolvency Act No. 18 of 2015, in his application dated September 19, 2022, to bring a claim for unfair termination.
4. His contract was terminated on June 15, 2021 through the 2nd respondent.
5. The respondents oppose the application through the replying affidavit of the 2nd respondent, sworn on November 4, 2022.
6. They contend that the application contravenes section 560 of the Insolvency Act; the High Court is the right forum to seek leave; the 1st respondent has engaged a financial advisor to assist in reorganization of its business; filing of the claim would occasion the 1st respondent irreparable harm and damage; the applicant has not established a prima facie case with probability of success; and the application is in gross abuse of the process of the court.
The Court Finds: 7. The applicant has a right of access to justice, under article 48 of the Constitution.
8. The claim he intends to file against the respondents must be filed within a limited period of 3 years under section 90 of the Employment Act.
9. His contract was terminated on June 15, 2021, which means that over one year is already spent, out of the 3 years granted to him by the law, within which to file his claim.
10. He does not have control over the time administration proceedings at the High Court shall take. To bar him from filing his claim, until those proceedings come to an end, would impede his right of access to justice. He does not have control over the time the administration proceedings take, or indeed the outcome of those proceedings.
11. The Constitution of Kenya creates 3 courts with the status of the High Court- the High Court itself, the Employment and Labour Relations Court and the Environment and Land Court. These courts have their distinctive mandates.
12. Where insolvency as in the present application, affects employment and labour relations, jurisdiction is entirely with the Employment and Labour Relations Court.
13. It cannot be that leave is sought and issued at the High court, to file a claim at the Employment and Labour Relations Court. Section 2 of the Insolvency Act, like section 2 of the Civil Procedure Act, defining the Court to mean the High Court, must be understood within the context of the Constitution of Kenya.
14. Moratorium against commencement or continuing legal proceedings may be lifted against the Company, or against the Company’s assets, with the approval of the court, or the administrator.
15. Approval is appropriate, where the applicant is likely to suffer significant loss. in this application, the administrator has not considered the prejudice the applicant would suffer if his claim is not filed within the prescribed time. He has not stated anything about the claimant’s constitutional right of access to justice. He had not convinced the court in what way, the mere act of filing a claim, will disrupt the administration process.
16. The court has carefully weighed the interests of the parties, and concludes that the application must be allowed.It Is Ordereda. The application for leave to file claim against the respondents is allowed.b. The applicant shall file and serve his claim within the 30 days of this Ruling.c. No order on the costs.
DATED, SIGNED AND RELEASED TO THE PARTIES ELECTRONICALLY, AT NAIROBI, UNDER THE MINISTRY OF LABOUR AND JUDICIARY COVID-19 GUIDELINES, THIS 31ST DAY OF JANUARY 2023JAMES RIKAJUDGE