The Employment and Labour Relations Court in Nyeri has ruled that private schools may still be sued in employment disputes even where they claim not to be legal entities.
The issue arose in a case filed by Samuel Kariuki Ndirangu against St. Mary’s Boys Secondary School and Child Rescue Centre, where he alleged unfair and unlawful termination of his employment as a security officer.
Ndirangu told the court that he worked for the institution from November 11, 2020, until February 5, 2024, when his services were allegedly terminated without notice.
He said that when he reported to work on the material day, he found new security personnel already deployed at his station.
Upon seeking clarification, he was allegedly informed that he was no longer employed and directed to return home.
He further stated that he was later issued a letter indicating that his position had been declared redundant.
In response, the school argued that it was a private institution without legal personality and therefore could not be sued in its own name.
It maintained that as a non-legal entity, it could not enter into valid employment contracts or be held liable in court proceedings.
Court Rules Private School Can Be Sued Despite Non-Legal Entity Claim
However, the court on Friday, April 24, raised questions over that position, noting that if the institution indeed lacked legal personality, it was unclear how it could have lawfully entered into employment contracts and described itself as an “employer.”
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The court further observed that the school had not clearly explained its legal structure, with uncertainty even in the testimony as to whether it was a company, a partnership, or a sole proprietorship.
Justice Stella Rutto held that, having presented itself as an employer and executed employment contracts in its own name, the institution could not later deny that status to avoid legal responsibility.
She stated that such conduct amounts to an inconsistent position that the law does not allow.
“Having executed a contract of employment in its own name and described itself as an “employer”, the Appellant cannot subsequently disclaim that capacity and assert that it is a non-legal entity incapable of being sued. It is estopped from advancing such a position, ” the court ruled.
Relying on the doctrine of estoppel, the court noted that a party cannot be allowed to deny a position it has previously taken where another party has relied on it. The court cited the case of Serah Njeri Warobi v John Kimani Njoroge [2013] eKLR, which reinforces that principle.
The court also referred to Section 120 of the Evidence Act, which provides that where a person, by words or conduct, causes another to believe in a certain state of affairs and act upon it, they cannot later deny that position in legal proceedings.
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Court Findings
The court also restated that Section 2 of the Employment Act defines the term “employer” broadly to include any person, public body, firm, corporation, or company that has entered into a contract of service to employ an individual, and includes the agent, foreman, manager, or factor of such person or entity.
From this statutory definition, the court observed that the term “employer” is given an expansive interpretation under the Employment Act so as to cover entities and persons who may not strictly be parties to a formal or conventional legal structure, as long as they are involved in the employment relationship.
This position has previously been affirmed by the court in Daniel Mutisya Masesi v Romy Madan & another [2013] eKLR, where it was held that:
“The Employment Act defines the term ‘employer’ expansively, and does not suggest anywhere that directors cannot be joined with their corporate business vehicles in redressing employment wrongs. The Court looks at the whole economic enterprise, not the legal and business reincarnations behind the enterprise.”
“For the foregoing reasons, the Court returns that the trial Court did not err in finding that the Appellant was the Respondent’s employer and that it had the capacity to sue and sued,” the court ruled.
