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ELRCDismissedCause No 1154 of 2011· [2015] KEELRC 183 (KLR)

Zachariah Kerauni Maosa v British American Insurance Co (K) Ltd [2015] KEELRC 183 (KLR)

Employment and Labour Relations Court
13 November 2015
LNLINNET NDOLO
1,258 words in judgment
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The bottom line

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Kenya's Employment Court dismissed a commission agent's terminal dues claim, confirming that working for a company is not the same as being its employee.

What this practically means

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Executive summary

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The Claimant sought payment of terminal dues from the Respondent, alleging that he worked both as an employee and an agent from August 1976 until April 1997 when he was retired without notice. He claimed pay in lieu of notice, pension, security bond, commissions, retirement benefits, service pay, leave allowance and house allowance for 21 years, together with costs and interest. The Respondent denied an employment relationship, contending that the Claimant was a commission agent who resigned voluntarily, and further raised limitation and the position that pension claims lie against the Pension Scheme. The Court framed three issues: whether an employment relationship existed, whether the claim was statute barred, and whether the remedies were due. Examining the Claimant's February 1997 payslip, the Court noted that his earnings comprised commissions and attracted withholding tax rather than PAYE, inconsistent with employment. Applying the Ontario v Sagaz approach as adopted in Everret Aviation, and affirming John Kamau Mburu v PATH, the Court held that a work relationship existed but no employment relationship as defined in the repealed Employment Act. Consequently, the Court found it lacked jurisdiction, since the ELRC's jurisdiction under Article 162(2)(a) and Section 12(1)(a) of the ELRC Act is premised on an employment relationship, and pension claims fall to the Retirement Benefits Authority. The claim was dismissed with no order for costs.

Key legal issues

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01

Whether there was an employment relationship between the Claimant and the Respondent

Holding

Although there was a work relationship, there was no employment relationship as defined in the applicable law; the Claimant was paid commissions and subject to withholding tax rather than PAYE, indicating agency rather than employment.

Reasoning

The Court examined the Claimant's February 1997 payslip, which showed earnings made up of several categories of commissions with withholding tax deducted. An employee would ordinarily earn a constant basic salary subject to PAYE, not withholding tax. Relying on Ontario Ltd v Sagaz Industries and Everret Aviation Limited v Kenya Revenue Authority, the Court held that the intention of the parties and the totality of the relationship must be examined, and concluded that no employment relationship as defined in the repealed Employment Act existed.

p. 3
02

Whether the Court had jurisdiction to entertain the claim

Holding

The Court held that it had no jurisdiction since the claim did not arise from an employment relationship as defined in law.

Reasoning

The Court's jurisdiction under Article 162(2)(a) of the Constitution and Section 12(1)(a) of the Employment and Labour Relations Court Act is limited to disputes relating to or arising out of employment between an employer and an employee. Since no employment relationship existed, the Court had no leeway to entertain the claim, which would fall within the province of regular civil courts. The Court accordingly declined to rule on the other issues, including limitation.

p. 3

Legal principles established

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  • The jurisdiction of the Employment and Labour Relations Court is premised on the existence of an employment relationship as defined in law; a mere work relationship does not confer jurisdiction, and such claims fall within the province of regular civil courts.
  • An employment relationship is not the same as a work relationship; the mere fact that parties work together does not necessarily give rise to an employment relationship.
  • Original jurisdiction over pension claims lies with the Retirement Benefits Authority.

Court orders

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  1. 1.The Claimant's claim as filed before this Court is dismissed
  2. 2.No order for costs

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)(a)
  • Employment Act (repealed)Section 2
  • Employment and Labour Relations Court ActSection 12(1)(a)

Cases cited (4)

  • Ontario Ltd v Sagaz Industries Inc.
    2001 SCC 59
  • Everret Aviation Limited v the Kenya Revenue Authority
    [2013] eKLR
  • John Kawa Ilume v Gemina Insurance Co. Ltd
    [2014] eKLR
  • John Kamau Mburu v Program for Appropriate Technology in Health (PATH) & Another
    [2015] eKLR
Jurisdiction invoked
Article 162(2)(a) of the Constitution; 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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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, "Zachariah Kerauni Maosa v British American Insurance Co (K) Ltd [2015] KEELRC 183 (KLR)", Case Analysis (2015). Cause No 1154 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/183/eng@2015-11-13

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