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ELRCDismissedCause No. 327 of 2014· [2016] KEELRC 1225 (KLR)

Fredrick Byakika v Mutiso Menezes International Unlimited [2016] KEELRC 1225 (KLR)

Employment and Labour Relations Court of Kenya
5 April 2016
MMM. Mbaru
2,923 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled a consultant invoicing monthly on withholding tax, not PAYE, was not an employee and could not claim unfair termination remedies.

What this practically means

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Executive summary

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The claimant, engaged by letter dated 9th July 2013 as Resident Engineer on the respondent's project for the construction of the National Records and Archives Building in Kampala, Uganda, sued claiming that his summary dismissal for absenteeism was wrongful and unfair. He sought a declaration of unfair termination, balance of salaries for July and August 2013 and 20 days of September 2013, notice pay, and damages for wrongful termination. The respondent maintained that he was engaged as a consultant, not an employee, payable only upon invoicing with timesheets, subject to 5% withholding tax, and that he absconded duty. The court framed three issues: whether the claimant was an employee, whether there was wrongful termination, and whether remedies were due. Applying the written terms of the letter of appointment, the court held that the parties had agreed on a consultancy relationship: the claimant invoiced monthly, was subject to withholding tax rather than PAYE, had no fixed working hours, and did not seek leave when ill. Relying on Ready Mixed Concrete and Kenya Hotel & Allied Workers Union v Alfajiri Villas, the court found the claimant was not an employee under section 2 of the Employment Act, so the statutory unfair termination framework could not apply. The respondent's witness admitted in evidence that the balance of salaries for July, August and 20 days of September remained payable. The court dismissed the claim save for the admitted salaries and ordered each party to bear its own costs.

Key legal issues

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01

Whether the Claimant was an employee under a contract of service or an independent consultant

Holding

The claimant was a consultant, not an employee; the written letter of appointment governed the relationship and its terms (invoicing, 5% withholding tax, unfixed hours, consultancy designation) were inconsistent with a contract of service

Reasoning

The court held that where parties reduce their relationship to writing, those written terms carry importance as the basis of their intentions. Although the appointment used terms like salary and summary dismissal, the claimant invoiced monthly, was paid upon invoices, was subject to 5% withholding tax rather than PAYE, had no fixed hours, did not apply for sick leave, and was designated a consultant within the Project Consultancy Team. These aligned with the characteristics of an independent contractor as set out in the cited authorities.

p. 5
02

Whether the Employment Act protections (sections 31, 41, 43 and 45) applied

Holding

They did not apply, since the claimant was not an employee as defined in section 2 of the Employment Act

Reasoning

The claimant's own submissions relied on sections 31, 41, 43 and 45 of the Employment Act, but these provisions presuppose an employment relationship. Having found the claimant was engaged on consultancy terms where control and remuneration were on consultancy terms, the court found no employment relationship and therefore no statutory unfair termination framework to invoke. The suit could not be sustained before the ELRC save for admitted salary dues.

p. 4
03

Remedies due

Holding

Only the admitted balance of salaries for July, August and 20 days of September 2013 remained payable; all employment-based remedies were refused and the claim was dismissed

Reasoning

The respondent's witness, Alan Simu, admitted in evidence that the respondent was willing to pay the balance of salaries due for July, August and 20 days of September. Beyond that admitted amount, notice pay and damages for unfair termination were not available because the claimant was found not to be an employee. The claim therefore failed except for the admitted salaries, and each party was to bear its own costs.

p. 5

Legal principles established

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  • Where parties have reduced the terms of their relationship into writing, the written terms govern the nature of that relationship, and labels such as salary, employment terms and summary dismissal do not of themselves confer an employment relationship
  • A consultant/independent contractor is characterised by invoicing for services, working his own hours, being subject to withholding tax rather than PAYE, and not enjoying employment benefits such as leave

Court orders

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  1. 1.The claim is dismissed save for the admitted salaries due
  2. 2.Each party to bear their own costs

Authorities

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Legislation

  • Employment Actsection 2
  • Employment Actsection 31
  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45

Cases cited (6)

  • Christine Adot Lopeyio versus Wycliffe Pere
    Cause No. 1688 of 2012
  • Everett Aviation Limited versus Kenya Revenue Authority
    [2013] eKLR
  • Kenya Shoe and Leather Workers union versus Fast-rack Management Consultants Ltd
    [2015] eKLR
  • George Kamau Ndiritu versus Intercontinental Hotel
    Cause No. 2347 of 2012
  • Ready Mixed Concrete (South East) Ltd versus Ministry of Pensions and National Insurance
    [1968] 2 QB 497
  • Kenya Hotel & Allied Workers union versus Alfajiri Villas
    [2014] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court under Article 162(2) of the Constitution (dispute whether the claimant fell within the Employment Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (22)

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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, "Fredrick Byakika v Mutiso Menezes International Unlimited [2016] KEELRC 1225 (KLR)", Case Analysis (2016). Cause No. 327 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1225/eng@2016-04-05

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