George Onyango Rachuonyo v African Development Solution (ADESO) [2022] KEELRC 890 (KLR)
The bottom line
#Kenya's Employment Court ruled that calling a worker a 'consultant' doesn't make it so, and awarded the former finance head over Kshs 2.2 million.
What this practically means
#Executive summary
#Key legal issues
#Status of the claimant: employee or independent consultant
The claimant was an employee of the respondent and not an independent consultant.
The consultancy agreement expired by its own clause on 20 December 2015, after which the claimant continued working without a new contract. He worked full-time hours (8 a.m. to 5 p.m., five days a week per time sheets), supervised staff, chaired meetings, reported directly to the CEO, held a head-of-department position in the organogram, and received allowances alongside monthly pay. The consultancy-fee/invoicing arrangement was a disguise to avoid PAYE and employer obligations under the Employment Act.
Validity of reason and fairness of procedure of termination
The termination was without valid procedural compliance - no notice, no notice to show cause, no hearing and no opportunity to be heard, contrary to sections 36, 41, 43 and 45 of the Employment Act.
The respondent, wrongly assuming the claimant was a consultant, terminated him by letter of 26 February 2016 without notice or hearing. The claimant's appeal for a fair hearing never materialised. The salary was withheld pending fraud investigations whose report was never shared with the claimant. The claimant did not contribute to the termination.
Entitlement to reliefs
The claimant was awarded one month's salary in lieu of notice, salary for February 2016 up to 25 February, and three months' salary as compensation under section 49(1)(c) and (4).
The claimant served diligently for six months, did not contribute to the termination, lost career prospects and job retention with his previous employer, and received no terminal benefits. Considering those circumstances, three months' salary compensation was appropriate, following Radido J's approach in Kenya Hotels and Allied Workers Union v Alfajiri Villas.
Legal principles established
#- Where an employer mixes elements of an independent contractor with elements applicable to an employee, the court must examine the dominant factors to determine the true status of the relationship.
- Labelling payment as consultancy fees may be a disguise to avoid employer obligations; the substance of the relationship (working hours, supervision, integration) prevails.
- Termination without notice, notice to show cause, a disciplinary hearing or any opportunity to be heard violates sections 36, 41, 43 and 45 of the Employment Act.
Court orders
#- 1.Declaration implied that termination was unlawful and unfair
- 2.Notice pay of Kshs 462,910.30
- 3.Salary for February 2016 of Kshs 385,750
- 4.Compensation for unlawful and unfair dismissal of Kshs 1,388,730 (three months' salary)
- 5.Total award of Kshs 2,237,390.30
- 6.Interest at court rates from date of judgment till payment in full
- 7.Costs of the suit to the claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 36, 41, 43, 45 and 49 invoked)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "George Onyango Rachuonyo v African Development Solution (ADESO) [2022] KEELRC 890 (KLR)", Case Analysis (2022). Cause No 1771 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/890/eng@2022-02-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.