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ELRCDismissedNot stated in the judgment provided· [2019] KEELRC 868 (KLR)

Moses Waithaka Ngunje v Liberty Life Assurance Kenya Limited [2019] KEELRC 868 (KLR)

Employment and Labour Relations Court
24 September 2019
NMNzioki wa Makau
1,536 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed that insurance agents on commission are not employees and must pursue contract disputes in the High Court, not the ELRC.

What this practically means

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Executive summary

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The Claimant, engaged as a team leader at the Respondent's Nanyuki Branch, claimed he earned a net salary of Kshs. 160,000/- monthly and was coerced through economic duress into signing a new contract reducing his salary to Kshs. 100,000/- by the withholding of his July to September 2015 salaries. He alleged non-payment despite signing, dismissal without a notice to show cause, and sought the remainder of the contract from August to December 2015, three months' pay in lieu of notice, costs and interest. The Respondent denied an employment relationship, averring the Claimant was engaged as an insurance agent remunerated by commission, that the contract was terminated per its clause 8.1 for non-performance, and that the suit lacked jurisdiction. Both parties testified. The Respondent relied on authorities holding that insurance agents are independent contractors, not employees. The court found the Claimant had a contract of engagement rather than employment, was remunerated by a subsidy/commission, and that his own evidence confirmed he was an agent. Applying the cited authorities, the court held the relationship was commercial, creating an agency, and that redress for commissions or breach lay in the commercial division of the High Court, not the ELRC. The suit was dismissed as incompetent and an abuse of court process, with no order as to costs.

Key legal issues

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01

Whether the Claimant was an employee or an insurance agent

Holding

The Claimant was an agent, not an employee; he had a contract of engagement, received subsidy/commission rather than salary, and the ELRC had no jurisdiction

Reasoning

The court found the Claimant had a contract of engagement rather than a contract of employment, remunerated by a subsidy with a formula for administration. The agency agreement spelt out his roles as agent, his obligations and the mode of termination. His own evidence repeatedly described him as an agent. Following the authorities cited by the Respondent, the relationship was commercial, and redress lay in the High Court's commercial division, not the ELRC.

p. 3
02

Jurisdiction of the ELRC over agency disputes

Holding

The suit was incompetent and an abuse of court process as no employment relationship existed

Reasoning

Because the relationship was contractual/commercial and created an agency, the ELRC lacked jurisdiction over the claim. The proper forum was the commercial division of the High Court for payment of commissions or breach of a commercial contract.

p. 3

Legal principles established

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  • An insurance agent engaged under an agency agreement is not an employee, and the contract is a contract for service, not a contract of service

Court orders

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  1. 1.The suit is dismissed
  2. 2.No order as to costs

Authorities

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Legislation

  • Employment ActSection 2 (definition of employee)

Cases cited (4)

  • Vitalis Oliewo K'omudho v AAR Health Services
    [2016] eKLR
  • Simon Njuguna Kago v Pan African Life Assurance Limited
    [2018] eKLR
  • Evans Musya Musunzar v Jubilee Insurance Company of Kenya Limited
    [2018] eKLR
  • John Kawa Ilume v Gemina Insurance Co. Ltd
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act; contested by the Respondent on the ground that no employment relationship existed

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, "Moses Waithaka Ngunje v Liberty Life Assurance Kenya Limited [2019] KEELRC 868 (KLR)", Case Analysis (2019). Not stated in the judgment provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/868/eng@2019-09-24

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