1. Before Court is the Respondent’s notice of Preliminary Objection dated 3rd March, 2026, wherein the Respondent seeks the striking out of the Claimant’s Claim on the ground that the Court lacks jurisdiction to hear the suit for reason that the Claimant was a Director and Shareholder of the Respondent and not an employee, as there was no employment contract between the parties.
2. The Respondent contends that as a director/shareholder of the Respondent, the Claimant had no employer-employee relationship with the Respondent, and that the Court of Appeal is authoritative on this issue through the case of Rift Valley Water Services Board & 3 others v Asanyo & 2 others [2022] KECA 778 (KLR).
3. Parties were directed to canvass the objection through written submissions, but submissions were only received from the Respondent. The Claimant did not file submissions even though he indicated to the court that he did.
The Respondent’s Submissions
4. The Respondent submits that the Preliminary Objection (P.O.) is properly founded in law and, if upheld, is capable of disposing of the entire suit without the need for a full hearing. Relying on the principles in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [19691 EA 696, the Respondent contends that a valid preliminary objection must raise a pure point of law arising from the pleadings and be capable of determining the suit.
5. It argues that the present objection satisfies this test because it challenges the Court's jurisdiction under the Constitution and the relevant legislation. Further, the objection is based solely on the Claimant's own pleadings and admissions, requiring neither the ascertainment of disputed facts nor the exercise of judicial discretion. Accordingly, the Respondent urges the Court to uphold the Preliminary Objection.
6. The Respondent argues that the Court lacks jurisdiction for reason that the Claimant was a director and shareholder, and not an employee. It submits that under Article 162(2) of the Constitution and Section 12(1)(a) of the Employment and Labour Relations Court Act, the Court can only hear disputes arising from an employer–employee relationship founded on a contract of service, and that since the Claimant's own pleadings do not establish such a relationship, the Respondent contends that the Court has no jurisdiction to entertain the claim.
7. The Respondent submits that a person does not become an employee merely by being a director of a company, unless there is a separate contract of service. Relying on Rift Valley Water Services Board & 3 Others v Geoffrey Asanyo & 2 Others [2022] KECA 778 (KLR), and Parsons v Albert J. Parsons and Sons Ltd [19791 ICR 271, it argues that the Claimant's appointment as a director did not create an employment relationship.
8. The Respondent further contends that the Claimant's receipt of monthly payments described as a "salary" does not establish an employment relationship. Citing the case of Fredrick Byakika v Mutiso Menezes International Unlimited [2016] eKLR, it maintains that the Claimant's own pleadings show he was only a director and shareholder, and that any dispute arising from that relationship falls within the jurisdiction of the High Court (Commercial Division), not the Employment and Labour Relations Court.
9. The Respondent submits that the Preliminary Objection is well founded because the Claimant's own pleadings show that he was a director and shareholder, rather than an employee under a contract of service. Consequently, the dispute falls outside the jurisdiction of the Employment and Labour Relations Court.
10. The Respondent argues that once a court finds it lacks jurisdiction, it must immediately down its tools as was held in Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [19897 KLR 1. Accordingly, it prays that the Preliminary Objection be upheld, the claim be struck out or dismissed for want of jurisdiction, and costs be awarded to the Respondent.
Determination
11. The sole issue arising for my determination is whether the Respondent's Preliminary Objection raises a pure point of law capable of disposing of the suit on the question of jurisdiction.
12. The Respondent's objection is premised on the argument that the Claimant was merely a director and shareholder of the Respondent company and not an employee serving under a contract of service. Consequently, it contends that this Court lacks jurisdiction under Article 162(2)(a) of the Constitution and Section 12 of the Employment and Labour Relations Court Act.
13. In the often cited case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696, the former East African Court of Appeal held that a preliminary objection consists of a pure point of law which is argued on the assumption that all the facts pleaded by the opposite party are correct, and which, if successful, is capable of disposing of the suit. The Court further cautioned that a preliminary objection cannot be founded on disputed facts or matters requiring the Court to ascertain evidence.
14. The same principle was reiterated by the Supreme Court in Independent Electoral and Boundaries Commission v Jane Cheperenger & 2 Others [2015] eKLR, where it observed that a preliminary objection must not involve contested factual issues requiring evidentiary interrogation.
15. The question for this court is whether the issue raised by the Respondent can be determined purely from the pleadings without receiving evidence.
16. The Respondent relies on the Claimant's averments that he was a director and shareholder of the Respondent and submits that those facts, by themselves, remove the dispute from the jurisdiction of this Court.
17. The decisions in Rift Valley Water Services Board (supra) and the English authority of Parsons v Albert J. Parsons & Sons Ltd [1979] ICR 271, both cited by the Respondent, recognize that a company director is not automatically an employee merely by virtue of being appointed a director. An employment relationship must be established through a contract of service and the surrounding facts.
18. The authorities cited, however, do not in my view establish that every dispute involving a director is automatically outside the jurisdiction of the Employment and Labour Relations Court. Rather, they underscore that the existence or otherwise of an employment relationship is a matter to be determined from the evidence of the parties' legal relationship.
19. From the pleadings before Court, the Claimant alleges that he served the Respondent in an executive capacity, received monthly remuneration described as salary, and that his engagement was unlawfully terminated. Although the Respondent disputes that the payments constituted salary and maintains that the Claimant served solely as a director and shareholder, those competing positions reveal a factual controversy regarding the true nature of the relationship between the parties.
20. Whether the Claimant served merely as a director, or whether he simultaneously served under a contract of service as an employee, is not a question capable of determination solely from the pleadings. The same requires examination of documentary evidence such as the employment contract, board resolutions, payroll records, remuneration structure, statutory deductions, job description, reporting structure, and other surrounding circumstances. Such an inquiry necessarily involves the reception and evaluation of evidence.
21. The Court of Appeal itself acknowledged in Rift Valley Water Services Board & 3 Others v Geoffrey Asanyo & 2 Others [2022] KECA 778 (KLR), that the existence of a contract of service is the decisive factor.
Whether such a contract existed is a matter of proof and cannot ordinarily be determined through a preliminary objection where the facts remain contested.
22. The Respondent herein invites the Court to conclude, without hearing evidence, that the Claimant was exclusively a director and shareholder and therefore outside the protection of employment law. Making such a finding would require the Court to determine contested factual matters, which fall outside the scope of a proper preliminary objection as contemplated in Mukisa Biscuit.
23. It is also not lost on this court that a person may simultaneously hold the office of director while serving under a contract of employment, and whether such dual capacity existed in this matter is a matter for trial.
24. Accordingly, while the Respondent has correctly cited the legal principles distinguishing directors from employees, the applicability of those principles to the present dispute cannot be resolved without evidence. The Preliminary Objection, therefore, ceases to be a pure point of law and instead becomes one requiring factual determination.
25. In the upshot, the Respondent's Notice of Preliminary Objection dated 3rd March 2026 is found lacking in merit and is accordingly dismissed with costs in the cause.
26. It is so ordered.
SIGNED, DATED, AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS 3RD DAY OF JULY, 2026.
Mr. Katee present for the Claimant/Respondent
N/A for the Respondent/Applicant
Ms. Esther -C/A
2. The Respondent contends that as a director/shareholder of the Respondent, the Claimant had no employer-employee relationship with the Respondent, and that the Court of Appeal is authoritative on this issue through the case of Rift Valley Water Services Board & 3 others v Asanyo & 2 others [2022] KECA 778 (KLR).
3. Parties were directed to canvass the objection through written submissions, but submissions were only received from the Respondent. The Claimant did not file submissions even though he indicated to the court that he did.
The Respondent’s Submissions
4. The Respondent submits that the Preliminary Objection (P.O.) is properly founded in law and, if upheld, is capable of disposing of the entire suit without the need for a full hearing. Relying on the principles in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [19691 EA 696, the Respondent contends that a valid preliminary objection must raise a pure point of law arising from the pleadings and be capable of determining the suit.
5. It argues that the present objection satisfies this test because it challenges the Court's jurisdiction under the Constitution and the relevant legislation. Further, the objection is based solely on the Claimant's own pleadings and admissions, requiring neither the ascertainment of disputed facts nor the exercise of judicial discretion. Accordingly, the Respondent urges the Court to uphold the Preliminary Objection.
6. The Respondent argues that the Court lacks jurisdiction for reason that the Claimant was a director and shareholder, and not an employee. It submits that under Article 162(2) of the Constitution and Section 12(1)(a) of the Employment and Labour Relations Court Act, the Court can only hear disputes arising from an employer–employee relationship founded on a contract of service, and that since the Claimant's own pleadings do not establish such a relationship, the Respondent contends that the Court has no jurisdiction to entertain the claim.
7. The Respondent submits that a person does not become an employee merely by being a director of a company, unless there is a separate contract of service. Relying on Rift Valley Water Services Board & 3 Others v Geoffrey Asanyo & 2 Others [2022] KECA 778 (KLR), and Parsons v Albert J. Parsons and Sons Ltd [19791 ICR 271, it argues that the Claimant's appointment as a director did not create an employment relationship.
8. The Respondent further contends that the Claimant's receipt of monthly payments described as a "salary" does not establish an employment relationship. Citing the case of Fredrick Byakika v Mutiso Menezes International Unlimited [2016] eKLR, it maintains that the Claimant's own pleadings show he was only a director and shareholder, and that any dispute arising from that relationship falls within the jurisdiction of the High Court (Commercial Division), not the Employment and Labour Relations Court.
9. The Respondent submits that the Preliminary Objection is well founded because the Claimant's own pleadings show that he was a director and shareholder, rather than an employee under a contract of service. Consequently, the dispute falls outside the jurisdiction of the Employment and Labour Relations Court.
10. The Respondent argues that once a court finds it lacks jurisdiction, it must immediately down its tools as was held in Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [19897 KLR 1. Accordingly, it prays that the Preliminary Objection be upheld, the claim be struck out or dismissed for want of jurisdiction, and costs be awarded to the Respondent.
Determination
11. The sole issue arising for my determination is whether the Respondent's Preliminary Objection raises a pure point of law capable of disposing of the suit on the question of jurisdiction.
12. The Respondent's objection is premised on the argument that the Claimant was merely a director and shareholder of the Respondent company and not an employee serving under a contract of service. Consequently, it contends that this Court lacks jurisdiction under Article 162(2)(a) of the Constitution and Section 12 of the Employment and Labour Relations Court Act.
13. In the often cited case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696, the former East African Court of Appeal held that a preliminary objection consists of a pure point of law which is argued on the assumption that all the facts pleaded by the opposite party are correct, and which, if successful, is capable of disposing of the suit. The Court further cautioned that a preliminary objection cannot be founded on disputed facts or matters requiring the Court to ascertain evidence.
14. The same principle was reiterated by the Supreme Court in Independent Electoral and Boundaries Commission v Jane Cheperenger & 2 Others [2015] eKLR, where it observed that a preliminary objection must not involve contested factual issues requiring evidentiary interrogation.
15. The question for this court is whether the issue raised by the Respondent can be determined purely from the pleadings without receiving evidence.
16. The Respondent relies on the Claimant's averments that he was a director and shareholder of the Respondent and submits that those facts, by themselves, remove the dispute from the jurisdiction of this Court.
17. The decisions in Rift Valley Water Services Board (supra) and the English authority of Parsons v Albert J. Parsons & Sons Ltd [1979] ICR 271, both cited by the Respondent, recognize that a company director is not automatically an employee merely by virtue of being appointed a director. An employment relationship must be established through a contract of service and the surrounding facts.
18. The authorities cited, however, do not in my view establish that every dispute involving a director is automatically outside the jurisdiction of the Employment and Labour Relations Court. Rather, they underscore that the existence or otherwise of an employment relationship is a matter to be determined from the evidence of the parties' legal relationship.
19. From the pleadings before Court, the Claimant alleges that he served the Respondent in an executive capacity, received monthly remuneration described as salary, and that his engagement was unlawfully terminated. Although the Respondent disputes that the payments constituted salary and maintains that the Claimant served solely as a director and shareholder, those competing positions reveal a factual controversy regarding the true nature of the relationship between the parties.
20. Whether the Claimant served merely as a director, or whether he simultaneously served under a contract of service as an employee, is not a question capable of determination solely from the pleadings. The same requires examination of documentary evidence such as the employment contract, board resolutions, payroll records, remuneration structure, statutory deductions, job description, reporting structure, and other surrounding circumstances. Such an inquiry necessarily involves the reception and evaluation of evidence.
21. The Court of Appeal itself acknowledged in Rift Valley Water Services Board & 3 Others v Geoffrey Asanyo & 2 Others [2022] KECA 778 (KLR), that the existence of a contract of service is the decisive factor.
Whether such a contract existed is a matter of proof and cannot ordinarily be determined through a preliminary objection where the facts remain contested.
22. The Respondent herein invites the Court to conclude, without hearing evidence, that the Claimant was exclusively a director and shareholder and therefore outside the protection of employment law. Making such a finding would require the Court to determine contested factual matters, which fall outside the scope of a proper preliminary objection as contemplated in Mukisa Biscuit.
23. It is also not lost on this court that a person may simultaneously hold the office of director while serving under a contract of employment, and whether such dual capacity existed in this matter is a matter for trial.
24. Accordingly, while the Respondent has correctly cited the legal principles distinguishing directors from employees, the applicability of those principles to the present dispute cannot be resolved without evidence. The Preliminary Objection, therefore, ceases to be a pure point of law and instead becomes one requiring factual determination.
25. In the upshot, the Respondent's Notice of Preliminary Objection dated 3rd March 2026 is found lacking in merit and is accordingly dismissed with costs in the cause.
26. It is so ordered.
SIGNED, DATED, AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS 3RD DAY OF JULY, 2026.
C. N. BAARI
JUDGE
Appearance: Mr. Katee present for the Claimant/Respondent
N/A for the Respondent/Applicant
Ms. Esther -C/A