Kariuki v Sanlam Insurance Company Limited (Formerly Pan Africa Insurance) (Cause 123 of 2017) [2019] KEELRC 2625 (KLR)
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
#Key legal issues
#Whether the court had jurisdiction notwithstanding the arbitration clause and the Respondent's jurisdictional objection
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
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.
Whether the relationship between the Claimant and the Respondent was employment
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
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.
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.The suit before the court was struck out
- 2.No order as to costs
- 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.