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ELRCStruck OutPetition (ELRC, Nairobi) - number not stated in judgment· [2020] KEELRC 1005 (KLR)

Miriam Nzilani Mweu v Kiptiness & Odhiambo Associates [2020] KEELRC 1005 (KLR)

Employment and Labour Relations Court
29 May 2020
2,124 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 a law firm 'partner' sharing in profits is not an employee, so employment courts cannot hear her discrimination and commission claims.

What this practically means

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Executive summary

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The Petitioner, an advocate, was engaged by the Respondent law firm as an Associate on 6 April 2015 under a contract of service, and on 30 November 2017 was promoted to Fixed Remuneration Partner effective 1 January 2018, with entitlement to fixed remuneration, bonuses and 7.5% of practice group revenues plus commissions on business introduced. She gave notice of resignation on 28 September 2017, and on 19 July 2019 petitioned the ELRC alleging violation of her rights to equality, freedom from discrimination and inherent dignity, together with breach of contract claims concerning her share of partnership revenues and commissions. The Respondent sought referral to arbitration and opposed the Petition. The Court identified the threshold jurisdictional question as whether the Petitioner was an employee or a partner. It held that her initial engagement as an Associate was a contract of service, but her admission as a Fixed Remuneration Partner, with entitlement to share in the income profits of the firm, made her a partner. Relying on section 8(2) of the Partnerships Act, 2012, which prohibits a partnership from employing a partner as an employee, and noting foreign authorities were statute-specific and not determinative, the Court found she was not an employee under the Employment Act, 2007. It further held it lacked jurisdiction over the partnership revenue and commission claims, and that the constitutional claims could not be severed from them. In lieu of dismissal, the Petition, undetermined on the merits, was struck out with no order on costs.

Key legal issues

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01

Whether the Petitioner, admitted as a Fixed Remuneration Partner, was an employee within the jurisdiction of the ELRC

Holding

She was a partner, not an employee; her entitlement to share in the firm's income profits made her a partner, and she was in fact an employer under the partnership statutes

Reasoning

The Court found the initial engagement as Associate was a contract of service, but the admission as Fixed Remuneration Partner with entitlement to 7.5% of practice group revenues and commissions demonstrated profit-sharing characteristic of partnership. Section 8(2) of the Partnerships Act, 2012 prohibits a partnership from employing a partner as an employee. Foreign authorities turned on particular statutes and were not determinative of the domestic framework. The jurisdictional finding disposes of the Petition.

p. 2
02

Whether the ELRC has jurisdiction over a dispute on distribution of partnership revenue/commissions

Holding

It does not; statutory law does not confer such jurisdiction

Reasoning

The Court held that the gravamen of the Petitioner's case, apart from constitutional allegations, concerned her share of revenues and commissions from the partnership. Even if she were held to be an employee, the constitutional claims could not be severed from the partnership revenue claims. The ELRC's jurisdiction is confined to employment and labour relations as defined by the Employment Act and the ELRC Act, and partnership revenue distribution falls outside it.

p. 3
03

Weight of foreign authorities on status of salaried partners

Holding

Foreign decisions turned on particular statutes and were not particularly determinative of the domestic framework

Reasoning

The Court considered the UK Employment Appeal Tribunal decision in Williamson & Soden Solicitors v Briars, the US Supreme Court's six-factor test in Clackamas Gastroenterology Associates v Wells, and Clyde & Co LLP v Bates van Winklehof, but noted each turned on foreign statutory definitions (Employment Rights Act 1996, Employment Equity Act provisions). The Court instead applied the domestic statutory framework under the Partnerships Act, 2012 and the Limited Liability Partnerships Act, 2011.

p. 3

Legal principles established

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  • Section 8(2) of the Partnerships Act, 2012 bars a partnership from employing a partner as an employee of the firm
  • A partner in a law firm entitled to a share in the income profits of the firm is not an employee for purposes of the Employment Act, 2007, and the ELRC lacks jurisdiction over such disputes

Court orders

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  1. 1.The Petition is struck out
  2. 2.No order on costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)
  • Constitution of Kenya, 2010Article 41(2)
  • Employment Act, 2007section 2
  • Employment and Labour Relations Court Actsection 2
  • Partnerships Act, 2012sections 3 and 8(2)
  • Limited Liability Partnerships Act, 2011section 8
  • Employment Rights Act, 1996 (UK)definition of employee and contract of employment
  • Public Interest Disclosure Act, 1998 (UK)not specified

Cases cited (3)

  • Williamson & Soden Solicitors v Briars
    UKEAT/0611/10/DM
  • Clackamas Gastroenterology Associates v Wells
    123 S.Ct. 1673 (2003)
  • Clyde & Co LLP & Ar v Bates van Winklehof
    (2014) UKSC 32
Jurisdiction invoked
Article 162(2) of the Constitution as read with section 2 of the Employment Act, 2007 and section 2 of the Employment and Labour Relations Court Act

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, "Miriam Nzilani Mweu v Kiptiness & Odhiambo Associates [2020] KEELRC 1005 (KLR)", Case Analysis (2020). Petition (ELRC, Nairobi) - number not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1005/eng@2020-05-29

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