The Supreme Court in Nairobi.
The Supreme Court is to decide whether employment disputes between foreign embassies and locally recruited staff are protected by sovereign immunity or can be heard by the local courts.
The Court of Appeal in Nairobi has cleared the Embassy of Sweden to challenge a landmark Labour Court’s ruling after finding the dispute raises issues of general public importance.
The outcome could determine whether thousands of Kenyans employed by diplomatic missions and international organisations can sue their foreign employers in local courts.
A three-judge bench of appellate court ruled that the intended appeal goes beyond a decade-old disagreement between the Swedish mission and its two former employees.
This is because the case raises unresolved questions on the interpretation of international law, diplomatic immunity and the jurisdiction of Kenyan courts over foreign states.
At the centre of the dispute are Lucy Muingo Kusewa and Renalda Mboje Mjomba, two Kenyan employees whose jobs were declared redundant after the Embassy of Sweden restructured its regional operations in 2014 and transferred functions to Addis Ababa and Stockholm.
Ms Kusewa served as operations controller while Mjomba worked as national programmes officer for institutional development, anti-corruption and governance.
The pair moved to court in the Employment and Labour Relations Court in 2015, arguing that they had been unfairly dismissed and denied employment benefits. They sought declarations that they were permanent and pensionable employees together with compensation and other remedies under Kenya's employment laws.
The Milimani Law Courts in Nairobi.
The embassy responded by asking the court to strike out the suits before trial, arguing that it was an extension of the Swedish state and therefore enjoyed sovereign and diplomatic immunity from the jurisdiction of Kenyan courts.
It maintained that Sweden had not waived that immunity and that Kenyan courts could not entertain employment claims against a foreign sovereign without its consent.
However, the Employment and Labour Relations Court rejected that argument in a July 2017 ruling, holding that modern international law recognises restrictive rather than absolute state immunity.
The Labour Court said that employment disputes involving locally recruited staff do not automatically fall within protected sovereign functions.
“Though the respondent may enjoy diplomatic immunity, this immunity is restrictive and does not cover employment matters as expressly outlined under UN Convention on Jurisdictional Immunities of States and their Property,” said the Labour Court.
It added: Employment matters also fall under the purview of Private law where immunity is restricted under the Privileges and Immunities Act and the Vienna Convention on the Law of Treaties.
The embassy was aggrieved with this ruling and appealed, but the Court of Appeal upheld that decision in April 2020, allowing the employment claims to proceed before the labour court.
The latest ruling now allows the embassy to seek the Supreme Court's intervention after the appellate judges concluded that the dispute presents legal questions whose determination extends beyond the parties before the court.
"The intended appeal raises issues of general public importance, such as the interpretation, application and enforcement of treaty and international laws in Kenya," the judges said while certifying the case to proceed to the apex court.
They added that "the question of a court's jurisdiction goes to the core of the determination of a dispute" and should be conclusively resolved before the employment claims proceed to full hearing.
The embassy argued that the case would clarify whether an embassy, as an extension of a sovereign state, remains immune from the jurisdiction of courts in the receiving state where there has been no waiver of immunity.
It also contended that certainty is needed on whether employment relationships involving locally engaged embassy staff constitute sovereign functions protected under international law or private employment relationships that may be litigated before domestic courts.
In its ruling, the Court of Appeal agreed that those questions transcend the immediate dispute and warrant consideration by the country's highest court.
However, the judges declined to stop the hearing of the cases from continuing before the Employment and Labour Relations Court while the embassy pursues the Supreme Court appeal.
"The respondents will not suffer any prejudice," the embassy had argued, adding that it was "a recognized and reputable foreign sovereign" capable of satisfying any judgment if its appeal ultimately failed.
The Supreme Court’s eventual ruling is expected to provide guidance on the balance between diplomatic immunity, treaty obligations and the employment rights of locally recruited staff working for foreign missions operating in Kenya.
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