Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCStruck OutNot stated in the judgment as provided· [2019] KEELRC 2625 (KLR)

Kariuki v Sanlam Insurance Company Limited (Formerly Pan Africa Insurance) (Cause 123 of 2017) [2019] KEELRC 2625 (KLR)

Employment and Labour Relations Court
11 December 2019
1,298 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~5 min to read original · ~4 min brief

The bottom line

#

A Kenyan court struck out a dismissal claim because the worker was an independent contractor, not an employee, so the employment court had no power to hear it.

What this practically means

#

Executive summary

#
The Claimant sued his former employer, alleging he was engaged as a unit manager and later promoted to branch manager, and that a disciplinary process culminated in his dismissal in April 2016 in breach of Article 50 of the Constitution and the Employment Act. He sought a declaration of unfair dismissal, 12 months' damages, aggravated/exemplary damages, a certificate of service, costs and interest. The Respondent did not file a defence but objected to the court's jurisdiction, pointing to an arbitration clause in the contract; arbitration had been attempted but the court vacated it after the arbitrator declined to present his report. The court first resolved jurisdiction, holding that Section 75 of the Labour Relations Act 2012 excludes the Arbitration Act from proceedings before the ELRC, so the objection was misplaced. However, on the evidence the court found that the Claimant's contract was a contract for service, not a contract of service: he was paid commission, paid withholding tax rather than NSSF and NHIF, and was an agent of the Respondent. There was thus no employer-employee relationship, and the dispute as framed was a commercial dispute in the wrong forum. The court struck out the suit with no order as to costs on 11 December 2019 at Nyeri, per Nzioki Wa Makau J.

Key legal issues

#
01

Whether the court had jurisdiction notwithstanding the arbitration clause and the Respondent's jurisdictional objection

Holding

The Arbitration Act is excluded from proceedings before the ELRC by Section 75 of the Labour Relations Act, so the Respondent's jurisdictional objection was misplaced

Reasoning

The court relied on Section 75 of the Labour Relations Act 2012, which ousts the Arbitration Act from proceedings before the Industrial Court (now ELRC). It also invoked the well-known jurisdictional principles from the Lillian S and Joey authorities on the threshold nature of jurisdiction. Since jurisdiction existed, the court proceeded to render judgment rather than stay the suit pending arbitration.

p. 2
02

Whether the relationship between the Claimant and the Respondent was employment

Holding

The contract was a contract for service, not a contract of service; the Claimant was an independent contractor/agent, so the claim was a commercial dispute wrongly filed in the ELRC

Reasoning

On a plain reading of the exhibited contract, the court found it was a contract for service. The Claimant was paid commission rather than salary, paid withholding tax rather than employee statutory deductions such as NSSF and NHIF, and was an agent of the Respondent. No employer-employee relationship was created, so the ELRC lacked jurisdiction over the dispute as framed and the suit was struck out.

p. 3

Legal principles established

#
  • Under Section 75 of the Labour Relations Act 2012, the Arbitration Act does not apply to proceedings before the Employment and Labour Relations Court
  • Where the contract is a contract for service creating an independent contractor or agency relationship, there is no employer-employee relationship and the dispute is not cognisable as an employment dispute

Court orders

#
  1. 1.The suit before the court was struck out
  2. 2.No order as to costs

Authorities

#

Legislation

  • Labour Relations ActSection 75
  • Arbitration ActGeneral (Act No. 4 of 1995)
  • Employment ActNot specified (invoked in the Claimant's pleadings)
  • Constitution of KenyaArticle 50

Cases cited (2)

  • The Owners of Motor Vessel "Lillian S" v Caltex Oil Kenya Limited
    (1989) KLR 1
  • Owners and Masters of The Motor Vessel "Joey" v Owners and Masters of The Motor Tugs "Barbara" and "Steve B"
    [2007] eKLR
Jurisdiction invoked
Section 75 of the Labour Relations Act 2012 (Arbitration Act does not apply to proceedings before the Industrial/ELRC); dispute ultimately struck out as wrongly filed in this forum

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Kariuki v Sanlam Insurance Company Limited (Formerly Pan Africa Insurance) (Cause 123 of 2017) [2019] KEELRC 2625 (KLR)", Case Analysis (2019). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2625/eng@2019-12-11

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