Jackson Okoth v Wells Fargo Courier Ltd & another [2020] KEELRC 516 (KLR)
The bottom line
#Kenya's Employment Court ruled a commission-based sales executive was an independent contractor, so unfair termination protections did not apply and his case failed.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction - whether a dispute between a Sales Executive engaged under a retainer/commission agreement falls within the ELRC's jurisdiction
The court held it had jurisdiction because the dispute arose from a human service relationship related to employment and labour, even though the claimant was found to be an independent Sales Executive
The court reasoned that the agreement, though silent on employee status, was a contract of service under section 2 of the Employment Act. It involved provision of human services for an indefinite period, so any dispute in a human service relationship is employment and labour related and within section 12(1)(a) of the ELRC Act.
Whether the claimant was an employee or an independent contractor
The court found that the claimant worked as an independent Sales Executive; his retainer and commissions were performance-based and not a fixed wage or salary
Reading the four corners of the agreement and Schedule I, the court noted defined territory, performance-based retainer conditioned on 80% of sales targets, 5% withholding tax on commissions, and termination for consecutive failure to meet targets - features consistent with an independent contractor rather than an employee earning a fixed salary.
Whether the termination was unlawful and unfair
The court held the contract was lawfully and fairly terminated in accordance with the agreement's provisions, since the unfair termination provisions of the Employment Act (sections 36, 41, 43 and 45) did not strictly apply
Because the contract did not entail strictu sensu an employment contract, the fairness of termination had to be construed from the contract itself and general contract law. The respondents demonstrated that termination followed the agreement's terms for continued failure to meet sales targets.
Legal principles established
#- The ELRC's jurisdiction extends to disputes arising in human service relationships, not strictly employment contracts alone
- A contract of service that is not strictly an employment contract is to be construed from within the contract itself and the law of contract, not the unfair termination provisions of the Employment Act
Court orders
#- 1.The suit is dismissed.
- 2.No orders as to costs.
- Jurisdiction invoked
- Article 162(2)(a) of the Constitution read with section 12(1)(a) of the Employment and Labour Relations Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Jackson Okoth v Wells Fargo Courier Ltd & another [2020] KEELRC 516 (KLR)", Case Analysis (2020). ELRC Cause, Nairobi (filed 11th June 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/516/eng@2020-09-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.