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ELRCPartially AllowedCause No. 19 of 2020· [2021] KEELRC 97 (KLR)

Rashmi Malde v Mutsimoto Motor Company Ltd [2021] KEELRC 97 (KLR)

Employment and Labour Relations Court of Kenya at Nakuru
16 December 2021
2,687 words in judgment
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The bottom line

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Kenya's Employment Court ruled a fixed-term contractor was owed only the Kshs. 670,000 agreed in her settlement, not the much larger sums she claimed.

What this practically means

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Executive summary

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The claimant sued the respondent in the Employment and Labour Relations Court at Nakuru alleging constructive dismissal and non-payment of salary, seeking salary arrears of Kshs. 1,350,000, November 2017 salary of Kshs. 500,000, compensation for unlawful termination, a certificate of service, and costs. The respondent denied an employment relationship, contending the claimant was an independent contractor hired to install palladium software for a fee of Kshs. 2,250,000, of which work valued at Kshs. 1,575,000 was done, Kshs. 900,000 paid, and a balance of Kshs. 670,000 agreed to be paid in instalments under an agreement dated 31st March 2020. The respondent also challenged the court's jurisdiction, arguing the claim was contractual. The court framed three issues: the nature of the relationship, whether there was unlawful termination, and entitlement to remedies. Examining the email correspondence, the court found no intention of permanent employment; the arrangement was a fixed three-month engagement for specific deliverables, subject to review which never occurred. On termination, the court held the contract ended by effluxion of time, not dismissal. On remedies, the court adopted the 31st March 2020 payment plan agreement, holding it defined the amount payable. Judgment was entered for the claimant for Kshs. 670,000/= plus costs and interest. The claims for salary arrears, November salary, compensation for termination and a certificate of service were not granted.

Key legal issues

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01

Whether the claimant was an employee or an independent contractor

Holding

The court found no permanent employment relationship; there was a working arrangement for a fixed period of three months subject to review, which was never reviewed

Reasoning

Relying on the emails of 19th June 2017 and 27th November 2017, the court found the parties agreed to an initial three-month working relationship with defined deliverables, with an appointment letter contemplated after the trial period. Payment was sporadic and staggered. The court held there was no intention of a permanent employment relationship and that the arrangement was for a fixed three-month term subject to review, which never occurred.

p. 4
02

Whether the claimant was constructively dismissed

Holding

No dismissal; the contract ended by effluxion of time when the three-month term lapsed

Reasoning

The court reasoned that the engagement was for a fixed period of three months and the claimant's continued work until November 2017 was attributable to the terms of the engagement based on performance of specific duties and deliverables, not to any dismissal by the respondent.

p. 4
03

What remedies the claimant is entitled to

Holding

Judgment for Kshs. 670,000/= per the 31st March 2020 agreement, plus costs and interest

Reasoning

The court found that the payment plan agreement dated 31st March 2020, which included a release and indemnification clause, defined the amount payable to the claimant. The court found for the claimant only to the extent of that agreed amount and entered judgment accordingly with costs and interest.

p. 4

Legal principles established

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  • A payment plan agreement with a release and indemnification clause, voluntarily entered between the parties, defines the amount payable and is enforceable as such.
  • A fixed-term engagement for specific deliverables ends by effluxion of time and does not amount to constructive dismissal.

Court orders

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  1. 1.Judgment entered for the claimant for Kshs. 670,000/= as per the agreement dated 31st March 2020
  2. 2.Costs of the suit awarded to the claimant
  3. 3.Interest on the decretal amount

Authorities

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Legislation

  • Employment Actsection 2
  • Employment Actsection 9(1)
  • Employment Actsection 51

Cases cited (4)

  • Fredrick Byakika V Mutiso Menezes international Unlimited
    [2016] eklr
  • Edward Ngarega Gacheru V Nation Media Group Limited
    [2019] eklr
  • Everret Aviation Limited V Kenya Revenue Authority (suing Through the Commissioner of Domestic taxes)
    [2013] eklr
  • Gilbert Sule Otieno V Seventh Day Adventist Church East Africa Ltd (suing on behalf of SDA Church Kiamunyi East)
    [2014] eklr
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (disputed by the respondent, who contended the claim was purely contractual)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Rashmi Malde v Mutsimoto Motor Company Ltd [2021] KEELRC 97 (KLR)", Case Analysis (2021). Cause No. 19 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/97/eng@2021-12-16

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