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ELRCPartially AllowedCause 416 of 2011· [2013] KEELRC 410 (KLR)

SHAMSA WANJUKI NJAGI V SUPREME COUNCIL OF KENYA MUSLIMS [2013] KEELRC 410 (KLR)

Industrial Court of Kenya
2 April 2013
2,610 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that calling someone a 'consultant' does not make it so — SUPKEM unfairly fired an employee and must pay her Kshs. 232,000.

What this practically means

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Executive summary

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The Claimant sued the officials of the Supreme Council of Kenya Muslims (SUPKEM) for unfair termination of employment, having been engaged in November 2009 as a Monitoring and Evaluation Officer in the Global Fund Round 7 HIV/AIDS Program and terminated verbally on 8th November 2010 without notice or stated reason. The Respondent denied an employment relationship, contending she was a consultant on monthly contracts and alleging her contract document was a forgery, and further alleged she was terminated for involvement in fraudulent activities. The court first determined her status. Applying Section 2 of the Employment Act, 2007 and the principle that the label used by the parties is immaterial, and noting that the Respondent's own contracts described her as an employee of SUPKEM, the court held she was an employee on a month-to-month contract of service. On termination, the Respondent's allegation of fraud was unsubstantiated, and the procedure in Section 41 for misconduct was not followed; the termination was therefore unfair under Sections 43 and 45. The court awarded three months' pay as compensation, one month's salary in lieu of notice, and unpaid leave, using a monthly salary of Kshs. 45,000 inclusive of travel allowance. The prayer for salary for the unexpired program period was declined as it would amount to specific performance; claims for NSSF and NHIF dues were dismissed as unproved, while claims for two days' salary in November 2010 and Mombasa accommodation costs were allowed. The certificate of service is to be re-issued in the Section 51 format, and each party bears their own costs. Total award: Kshs. 232,000.

Key legal issues

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01

Status of the Claimant: employee or consultant

Holding

Though referred to as a consultant, the Claimant was an employee of the Respondent on a contract of service renewable from month to month.

Reasoning

The court noted it is not in dispute there was a contract of engagement running month to month, at Kshs. 2,000 per day for 20 days per month. Clause 6 of the Respondent's own contracts referred to the Claimant as an employee of SUPKEM. Relying on Daniel Inyangu Dungani v Mary Khagali Lumula, the court held that the terminology used by the parties is immaterial; the substance of the relationship governs. On all the circumstances, the engagement was a contract of service.

p. 4
02

Whether the termination was unfair

Holding

The termination was unfair within the meaning of Section 45 of the Employment Act, 2007.

Reasoning

Under Section 43(1) the employer must prove the reason for termination. The Respondent alleged the Claimant was involved in fraudulent activities, an accusation that was not substantiated. Further, the allegation would fall under misconduct, requiring compliance with Section 41's procedure of explanation and hearing, which was not followed. The termination was therefore both substantively and procedurally unfair.

p. 5
03

Remedy for the unexpired term of the program

Holding

The claim for salary up to the end of the Global Fund Program was declined.

Reasoning

Since the employment was based on renewable monthly contracts, awarding salary for the unexpired program period would effectively amount to specific performance, a remedy granted sparingly in employment cases. Citing Southern Highlands Tobacco v McQueen on compensation subject to mitigation, the court held the only remedies available were compensation for unfair termination and pay in lieu of notice.

p. 5

Legal principles established

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  • In determining whether an employment relationship exists, the label the parties use for the relationship is not decisive; the court looks at the substance of the engagement.
  • An employer bears the burden of proving the reason for termination; failure to do so renders the termination unfair, and allegations of misconduct must be proved and the procedure in Section 41 of the Employment Act followed.
  • An employee wrongfully dismissed is entitled to full compensation for financial loss subject to the duty to mitigate, and the loss is not necessarily the unexpired term's emoluments.

Court orders

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  1. 1.3 months' pay as compensation for unfair termination of Kshs. 135,000
  2. 2.Salary in lieu of notice of Kshs. 45,000
  3. 3.Unpaid leave of Kshs. 45,000
  4. 4.Salary for 2 days worked in November 2010 of Kshs. 4,500
  5. 5.Accommodation costs incurred in Mombasa of Kshs. 2,500 (total award Kshs. 232,000)
  6. 6.Respondent directed to re-issue the Claimant's certificate of service in the format set out in Section 51 of the Employment Act, 2007
  7. 7.Each party to bear their own costs

Authorities

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Legislation

  • Employment Act, 2007Section 2
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43(1)
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 51
  • Constitution of Kenya, 2010Article 159(2)(c)

Cases cited (2)

  • Daniel Inyangu Dungani Vs Mary Khagali Lumula
    Industrial Court Cause No 1541 of 2011
  • Southern Highlands Tobacco Vs McQueen
    (1960) EA 410
Jurisdiction invoked
Employment and labour relations dispute under the Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "SHAMSA WANJUKI NJAGI V SUPREME COUNCIL OF KENYA MUSLIMS [2013] KEELRC 410 (KLR)", Case Analysis (2013). Cause 416 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/410/eng@2013-04-02

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