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ELRCDismissedCause No 1313 of 2012· [2015] KEELRC 80 (KLR)

Nathan Ngwili Muange v Muka Mukuu Farmers Cooperative Society Ltd [2015] KEELRC 80 (KLR)

Employment and Labour Relations Court of Kenya
11 December 2015
LNLinnet Ndolo
1,476 words in judgment
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The bottom line

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Kenya's Employment Court dismissed a Kshs.29 million claim because working for someone doesn't automatically make you an employee—no salary, no employment contract.

What this practically means

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Executive summary

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The Claimant sued the Respondent cooperative society seeking Kshs.29,316,359.00 in salary and allowances from the year 2000, Kshs.500,000.00 for an impounded motor vehicle, Kshs.105,500.00 for impounded household goods and Kshs.194,000.00 for unpaid 1987 dues, plus costs and interest. He claimed he was first employed as Accountant in 1985, wrongfully dismissed in 1987, and re-engaged as Chief Accountant by a letter dated 17th October 2000 with a re-entry salary of Kshs.120,000.00 fixed by a 2006 letter, but was denied duties from 2009 without a termination letter. The Respondent admitted the 1985-1987 employment and dismissal for gross misconduct but denied any resumption of employment, contending the 2000 reinstatement letter and related documents were unauthentic, that the Society was in wrangles and without a legitimate Management Committee between 2005 and 2007, and that the claim was fraudulent and brought in collusion. The Court framed two issues: whether an enforceable employment relationship existed, and entitlement to remedies. It held the 2000 letter, which specified no salary, created no contract of service, and that the Claimant worked as an independent contractor with other clients, a work relationship over which the Court lacked jurisdiction under Article 162(2)(a) of the Constitution and Section 12(1)(a) of the Employment and Labour Relations Court Act. Claims arising from the 1985-1987 employment were statute barred and unproved. The entire claim was dismissed with costs to the Respondent.

Key legal issues

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01

Whether the letter of reinstatement dated 17th October 2000 created an employment relationship

Holding

The letter did not create an employment relationship as known in law; it was no more than a good wish, and the fixing of salary six years later deepened the Court's doubt

Reasoning

The Court examined the letter of 17th October 2000 and the minutes of 20th October 2000 against the definitions of employee and employer under the repealed Employment Act (Cap 226). The letter specified no monthly salary, which is essential to a contract of service. The salary figure appeared only in 2006, and the evidence showed the Claimant worked as an independent contractor with other clients.

p. 3
02

Jurisdiction over work relationships that are not employment relationships

Holding

The Court lacks jurisdiction under Article 162(2)(a) of the Constitution and Section 12(1)(a) of the Employment and Labour Relations Court Act over work relationships that are not employment relationships

Reasoning

The evidence established that after 1987 the Claimant operated a private professional office, carried the Society's books for updating in his own offices at Tala and Machakos, and had other clients, giving technical advice on the Society's court case. The Court characterized this as an independent contractor arrangement, a mere work relationship outside the Court's statutory mandate.

p. 4
03

Claims arising from the 1985-1987 employment

Holding

These claims are statute barred and were not proved

Reasoning

The Court found that although the initial employment between 1985 and 1987 was not in contest, the claims arising from it, including the outstanding balance of Kshs.194,000.00 claimed, were time barred and unsupported by evidence, so no relief could issue on that head.

p. 4

Legal principles established

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  • An employment relationship is not the same as a work relationship; a mere work arrangement does not necessarily give rise to an employment relationship
  • This Court has no jurisdiction to entertain claims arising from a work relationship that is not an employment relationship
  • A letter of engagement that does not specify the salary payable does not create a contract of service

Court orders

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  1. 1.The Claimant's entire claim fails and is dismissed with costs to the Respondent

Authorities

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Legislation

  • Employment Act (Cap 226) (repealed)definitions of employee and employer
  • Employment and Labour Relations Court ActSection 12(1)(a)
  • Constitution of Kenya, 2010Article 162(2)(a)

Cases cited (1)

  • John Kamau Mburu v Program for Appropriate Technology in Health (PATH) & Another
    [2015] eKLR
Jurisdiction invoked
Article 162(2)(a) of the Constitution as read with Section 12(1)(a) of the Employment and Labour Relations Court Act

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, "Nathan Ngwili Muange v Muka Mukuu Farmers Cooperative Society Ltd [2015] KEELRC 80 (KLR)", Case Analysis (2015). Cause No 1313 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/80/eng@2015-12-11

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