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Court of AppealDismissedCivil Appeal No. 57 of 2014· [2015] KECA 425 (KLR)

Chemilil Outgrowers Co. Ltd v Lens Charles Ndago & 3 others [2015] KECA 425 (KLR)

Court of Appeal of Kenya
25 September 2015
David Kenani MaragaD. K. MaragaSKS. Gatembu KairuAMA. K. Murgor
2,842 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that commission-paid field clerks are employees, and firing them without notice and a hearing was unlawful.

What this practically means

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Executive summary

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The Court of Appeal at Kisumu dismissed this employer's appeal against a judgment of the Industrial Court (H. Wasilwa J) awarding four former field clerks terminal dues after finding their employment had been unlawfully terminated on 8 September 2009. The appellant contended the respondents were commission agents engaged under sugar-industry trade practices, paid a standing allowance of Kshs 1,000 plus commission, and not employees entitled to wages, notice pay, twelve months' salary for wrongful termination or service pay. On appeal, counsel collapsed nineteen grounds into one: that the trial court failed to evaluate the evidence on the nature of the engagement. The Court, applying the Makube vs Nyamiro standard for interference with factual findings and noting that section 17 of the Industrial Court Act confines appeals to points of law, re-evaluated the record. It held the letters of appointment referred to monthly wages and 'employment', the work was clerical and for the appellant's benefit, and the performance appraisals were inconsistent with an agency relationship; no agency terms or agreed commission rate existed. The respondents were therefore employees under the Employment Act, 2007. Their summary termination, based on below-average appraisal findings without twenty-eight days' notice under section 35(1)(c) or an opportunity to be heard under section 41, was wrongful. The trial court's findings and awards were affirmed, and the appeal was dismissed with costs to the respondents.

Key legal issues

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01

Whether the respondents were employees or commission agents

Holding

The respondents were employees within the meaning of the Employment Act, 2007; there was no evidence of a principal/agent relationship, and the letters of appointment provided monthly wages and used the language of employment.

Reasoning

The Court examined the letters of appointment, which referred to monthly wages and acceptance of terms of employment, and the nature of the clerical work performed for the benefit of the appellant's business. The carrying out of performance appraisals was itself an employment methodology inconsistent with agency. No agreement specified agency terms or a rate of commission; any per-ton payment could equally have been an employee incentive.

p. 5
02

Whether the termination of the respondents' services was lawful

Holding

The termination was wrongful: the appellant gave no twenty-eight days' notice as required by section 35(1)(c) and denied the respondents an opportunity to make representations as required by section 41.

Reasoning

The termination letter summarily ended the services on the basis of below-average appraisal findings, with no notice period and no opportunity for the respondents to rebut the findings. Both statutory requirements were breached, so the summary termination was unlawful and the trial court's finding of wrongful termination was correct.

p. 6

Legal principles established

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  • On a first appeal, an appellate court will not normally interfere with a trial court's finding of fact unless it is based on no evidence, a misapprehension of evidence, or wrong principles.
  • Where a contract of service pays wages monthly, either party must give twenty-eight days' written notice before termination under section 35(1)(c) of the Employment Act.
  • Before terminating an employee for poor performance, an employer must inform the employee of the reasons and give an opportunity to make representations under section 41 of the Employment Act.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs awarded to the respondents

Authorities

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Legislation

  • Industrial Court ActSection 17
  • Employment Act, 2007Section 9(1)
  • Employment Act, 2007Section 9(3)
  • Employment Act, 2007Section 10
  • Employment Act, 2007Section 10(h) and (i)
  • Employment Act, 2007Section 35(1)
  • Employment Act, 2007Section 41

Cases cited (1)

  • Makube vs Nyamiro
    [1983] KLR 403
On appeal from
Industrial Court of Kenya at Kisumu
Industrial Cause No. 67 of 2013
Jurisdiction invoked
Section 17 of the Industrial Court Act (appeals from the Industrial Court on points of law)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Chemilil Outgrowers Co. Ltd v Lens Charles Ndago & 3 others [2015] KECA 425 (KLR)", Case Analysis (2015). Civil Appeal No. 57 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/425/eng@2015-09-25

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.