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ELRCPartially AllowedCause No. 189 of 2015· [2018] KEELRC 841 (KLR)

Imtiaz Khan v Five Forty Aviation Limited & another [2018] KEELRC 841 (KLR)

Employment and Labour Relations Court
22 October 2018
HWHellen S. Wasilwa
2,937 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 that calling someone a 'consultant' doesn't avoid employment duties, and retirement-age terminations still require notice and reasons.

What this practically means

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Executive summary

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The Claimant sued the 1st Respondent seeking damages for unlawful termination and terminal benefits, having been employed in October 2006 as Resource Training & Development Manager (Ground Services), later promoted (as she alleged) to Airport Manager. The 2nd Respondent was struck out by a Ruling of 20 August 2015. The Respondent denied an employment relationship after 2008, contending the Claimant voluntarily resigned on 31 January 2008 and thereafter served only as a consultancy contractor who had surpassed mandatory retirement age, whose consultancy was terminated by mutual agreement in late 2014. The court framed three issues: the nature of the relationship, whether the dismissal was unfair, and entitlement to remedies. On the first issue, the court held that despite the 'consultancy agreement' label, the Respondent paid the Claimant a monthly salary, remitted NSSF and NHIF dues, and the Claimant worked under the Respondent's direction and control, so an employment relationship existed. On the second, the court found no one month's notice was given as the agreement required, and the termination was effected without reasons and without due process under Section 41 of the Employment Act; even retirement-age terminations require explanation and notice. The court awarded one month's salary in lieu of notice (Kshs. 277,000), six months' salary as compensation for unfair termination (Kshs. 1,662,000), and a certificate of service. House allowance was refused as the salary was consolidated, and claims for service pay, gratuity and severance pay were not granted. The Respondent was ordered to pay costs plus interest from the date of judgment.

Key legal issues

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01

Nature of the relationship between the Claimant and the Respondent after January 2009

Holding

The relationship was one of employment despite the consultancy label

Reasoning

Despite the wording of the consultancy agreement, the Respondent paid the Claimant a monthly salary and remitted NSSF and NHIF dues, which would not occur in a genuine consultancy. The Claimant also worked under the Respondent's direction and control and was paid periodically for work done, satisfying the indicia of employment.

p. 4
02

Whether the termination was unfair

Holding

The termination was unfair; no notice was given as envisaged and no reasons or due process were accorded

Reasoning

There was no indication that the Respondent gave the one month's notice contemplated in the agreement. The termination was effected without reasons and without the due process envisaged under Section 41 of the Employment Act. Reaching retirement age did not excuse the employer from explaining the fact and giving notice of retirement.

p. 4
03

Remedies payable

Holding

One month's notice pay, six months' compensation for unfair termination, and a certificate of service awarded; house allowance, service pay, gratuity and severance pay declined

Reasoning

The court applied its finding of unfair termination to award notice pay and the statutory maximum-style compensation of six months' salary, together with a certificate of service. House allowance was excluded because the salary was consolidated; other heads failed for want of contractual provision, pleading, or proof.

p. 4

Legal principles established

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  • The label in a consultancy agreement does not determine the nature of the relationship; direction, control and periodic payment of salary indicate employment.
  • Termination on account of retirement age still requires reasons and notice to the employee; failing which it is unfair.

Court orders

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  1. 1.1 month salary in lieu of notice of Kshs. 277,000
  2. 2.6 months' salary as compensation for unfair termination of Kshs. 1,662,000
  3. 3.Issuance of a Certificate of Service to the Claimant
  4. 4.Respondent to pay costs of the suit plus interest at Court rates from the date of judgment

Authorities

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Legislation

  • Employment ActSection 35(1)(c)
  • Employment ActSection 43(1)
  • Employment ActSection 41
  • Employment ActSection 51(1)
  • Employment ActSection 51(3)
  • Constitution of Kenya, 2010Article 41
  • Human Resource Management Professionals ActSections 3, 22 and 23

Cases cited (4)

  • David Odworina Muhisa v Magnate Ventures Limited
    [2017] EKLR
  • Walter Ogal Anuro v Teachers Service Commission
    (2013) EKLR
  • Angela Wokabi Muoki v Tribe Hotel Limited
    Cause No. 1712 of 2014
  • Moses Muhipi Wamalwa v Bake ‘N’ Bite Limited
    Cause No. 347 of 2015
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (first-instance employment cause)

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, "Imtiaz Khan v Five Forty Aviation Limited & another [2018] KEELRC 841 (KLR)", Case Analysis (2018). Cause No. 189 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/841/eng@2018-10-22

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