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ELRCDismissedCause No 12 of 2011· [2013] KEELRC 891 (KLR)

Maurice Oduor Okech v Chequered Flag Limited [2013] KEELRC 891 (KLR)

Industrial Court of Kenya
20 November 2013
LNLinnet Ndolo
1,312 words in judgment
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The bottom line

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Kenya's Employment Court ruled the worker was an independent contractor, not an employee, so his unfair termination claim failed completely.

What this practically means

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Executive summary

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The Claimant sued the Respondent for unfair termination of employment, claiming notice pay, 12 years' leave, house allowance, severance pay and 12 months' compensation. He averred that he was employed orally as a cushion maker from 7th August 1998 on piece-work rates and was terminated on 27th October 2010 without lawful cause, notice or a hearing. The Respondent denied an employment relationship, contending that the Claimant was an independent contractor trading as "Oketch's U/Car Cushioning", engaged job by job and paid per completed job upon issuing cash sales invoices. It explained the employee identity card as issued for identification against police harassment and the uniform as preserving corporate image. By counterclaim, the Respondent sought recovery of Kshs. 11,500 advanced to the Claimant for materials. The court identified the principal issue as whether an employment relationship existed. Applying section 2 of the Employment Act, 2007 and following Everret Aviation Limited v Kenya Revenue Authority, it held that the traditional control and integration tests are no longer conclusive and that the documentation and mode of payment are critical. Since the relationship was evidenced by job cards, local purchase orders and job contracts, with payment per completed job, the court found the Claimant was an independent contractor under a contract for services. The entire claim was dismissed. The counterclaim also failed, recovery of the advance lying under ordinary contract rather than employment law. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether the Claimant was an employee or an independent contractor

Holding

The Claimant was an independent contractor under a contract for services, not an employee

Reasoning

The court applied the statutory definitions in section 2 of the Employment Act, 2007 and held that it must go beyond the parties' own labels and examine the entire spectrum of facts. The relationship was evidenced by job cards, local purchase orders and job contracts, and the Claimant was paid per completed job. Such documentation and mode of payment are not ordinarily found in an employer/employee relationship, so the claim founded on employment failed.

p. 3
02

Whether the Respondent's counterclaim for Kshs. 11,500 was recoverable in this cause

Holding

The counterclaim failed because the recovery of the advance lay under ordinary contract law, not employment law

Reasoning

The Claimant admitted receiving the Kshs. 11,500 advance. Since the court found him to be an independent contractor, the advance was a debt owed under a contract for services, recoverable under normal contract rather than within the employment jurisdiction of the court.

p. 3

Legal principles established

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  • In determining whether a relationship is a contract for services or a contract of service, the traditional tests of control and integration are no longer conclusive; the form of documentation evidencing the relationship and the mode of payment are critical, and the court must look beyond the labels used by the parties.

Court orders

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  1. 1.The Claimant's entire claim premised on an employment relationship is dismissed
  2. 2.The Respondent's counterclaim for Kshs. 11,500 is dismissed
  3. 3.Each party will bear their own costs

Authorities

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Legislation

  • Employment ActSection 2

Cases cited (1)

  • Everret Aviation Limited Vs the Kenya Revenue Authority
    [2013] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction of the Industrial Court (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 (25)

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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, "Maurice Oduor Okech v Chequered Flag Limited [2013] KEELRC 891 (KLR)", Case Analysis (2013). Cause No 12 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/891/eng@2013-11-20

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