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ELRCDismissedCause No 725 of 2014· [2021] KEELRC 1540 (KLR)

Silas Okome v Panesars Kenya Limited [2021] KEELRC 1540 (KLR)

Employment and Labour Relations Court
18 June 2021
JRJames Rika
1,209 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 a furniture designer was an independent contractor, not an employee, so he lost all claims for terminal benefits and unfair termination compensation.

What this practically means

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Executive summary

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The Claimant sued the Respondent, a furniture-making business, alleging he was employed from 1997 as a Curve and Designer on a monthly salary of Kshs. 68,400, and that his contract was unfairly terminated on 17th June 2013 after his demand for a pay rise was declined. He sought notice pay, salary for days worked in June 2013, service pay for 15.5 years, house allowance at 15% of salary, annual leave, and 12 months' salary as compensation for unfair termination, together with costs and interest. An ex parte judgment of 2nd November 2018 in his favour was set aside on 17th May 2019, and the Respondent filed a Statement of Response maintaining that the Claimant was an independent contractor paid on piece rate, subject to 3% withholding tax rather than PAYE, using his own tools and setting his own timelines. The Court framed three issues: the Claimant's status, whether termination was unfair, and whether remedies were merited. On the evidence, including the Claimant's own admissions that he designed on his own, arranged his own work and was described as a contractor on his job card, the Court held he was an Independent Contractor. The conciliation process at the Ministry of Labour had reached the same conclusion. Consequently, the Claimant was not in an employer-employee relationship and could not merit terminal benefits or compensation for unfair termination. The Claim was declined with no order on costs, dated 18th June 2021 at Nairobi.

Key legal issues

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01

Whether the Claimant was an employee or an Independent Contractor

Holding

The Claimant was an Independent Contractor, not an employee.

Reasoning

On cross-examination the Claimant admitted he designed on his own, determined completion times, arranged his own work, used his own tools, and his job card described him as a contractor. He was not on PAYE but subject to 3% withholding tax, and was paid according to pieces designed. The conciliator at the Ministry of Labour reached the same conclusion. The evidence of both parties compelled the finding of independent contractor status.

p. 3
02

Whether the remedies for unfair termination and terminal benefits were available

Holding

The remedies were not available because no employer-employee relationship existed.

Reasoning

Having found the Claimant to be an independent contractor, the Court held he could not merit terminal benefits or compensation for unfair termination. The Labour Officer had similarly found he was a piece-rate worker who did not merit terminal dues, and the Respondent deposited Kshs. 11,765 at the Labour Office as payment for completed works.

p. 3

Legal principles established

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  • An Independent Contractor performs work for another person according to the Independent Contractor's own processes and methods.

Court orders

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  1. 1.The Claim is declined
  2. 2.No order on the costs

Authorities

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Cases cited (3)

  • Kenneth Kimani Mburu & Another v. Kibe Muigai Holdings Limited
    [2014] e-KLR
  • Maurice Oduor Oketch v. The Chequered Flag Limited
    [2011] e-KLR
  • Fredrick Yakima v. Menezes International
    [2016] e-KLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act (implied from the employment dispute; not expressly cited in the judgment)

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, "Silas Okome v Panesars Kenya Limited [2021] KEELRC 1540 (KLR)", Case Analysis (2021). Cause No 725 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1540/eng@2021-06-18

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