Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCAllowedClaim filed on 3rd April, 2019 (number not stated in judgment)· [2022] KEELRC 944 (KLR)

Michael Otieno Ouma v Bonito Hotels Ltd t/a Tourist Hotel Bungoma [2022] KEELRC 944 (KLR)

Employment and Labour Relations Court
2 February 2022
JKJ. W. KELI
2,577 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

#

A Kenyan court ruled that a 'consultant' chef was actually an employee and ordered Bonito Hotels to pay him Kshs. 1.34 million in unpaid wages.

What this practically means

#

Executive summary

#
The Claimant, engaged in October 2014 under an initial two-month consultancy agreement as a Chef Consultant at a fee of Kshs. 260,000, was thereafter engaged under a second undated agreement effective 1st December 2014, which, despite being titled a consultancy agreement, required him to perform the duties of Executive Chef for Tourist Hotel Bungoma and provided a monthly fee of Kshs. 130,000, company housing, transport allowances, weekly days off and 30 days annual leave. He claims Kshs. 1,341,330 in unpaid salary arrears after proceeding on unpaid leave in September 2017 and terminating the engagement in October 2017. The Respondent contested jurisdiction, asserting he was a consultant, not an employee. The court applied the multi-factor test from Eldoret Aviation Limited v Kenya Revenue Authority, adopted in Kollengode Venkatachala Laksminarayan v Intex Construction Limited, and distinguished NIDRI Therese Assie Lumumba. It found the substance of the relationship - integration into the business, employment-type benefits and three years of service - established an employer-employee relationship, conferring jurisdiction on the court. On quantum, the Respondent failed to produce payment records or specifically rebut the tabulated claim, and judgment was entered for Kshs. 1,341,330 in salary arrears, subject to statutory deductions, with costs and interest at court rates from the date of judgment.

Key legal issues

#
01

Whether the Claimant was an employee or a consultant of the Respondent

Holding

The Claimant was an employee of the Respondent with effect from 1st December 2014; the second agreement, though titled a consultancy agreement, amounted to an employment contract, conferring jurisdiction on the ELRC.

Reasoning

The court adopted the multi-factor test from Eldoret Aviation Limited v Kenya Revenue Authority as approved in Kollengode Venkatachala Laksminarayan v Intex Construction Limited, balancing control, integration, method of payment and the incidence of benefits. The second agreement provided the Claimant with company housing, electricity and water, weekly days off, 30 days annual leave and transport allowances - benefits typically associated with employment. He performed the duties of Executive Chef for Tourist Hotel Bungoma for about three years, and the Respondent's own witness confirmed that the hotel employs chefs and had engaged a chef trained by the Claimant after his departure. Distinguishing NIDRI Therese Assie Lumumba, the court held the title of the document and payment of a 'consultancy fee' were not decisive.

p. 4
02

Whether the Claimant is entitled to the reliefs sought

Holding

The claim for Kshs. 1,341,330/- in unpaid salary arrears was proved and awarded, subject to statutory deductions.

Reasoning

Once the employment relationship was established, the Respondent, as employer, was under an obligation to produce payment records. The Respondent admitted the Claimant left in 2017 but did not specifically rebut the tabulated arrears of Kshs. 1,341,330 with records. In the absence of such rebuttal, the Claimant's evidence and tabulation stood unchallenged, and the court awarded the full amount claimed as unpaid wages, together with costs and interest from the date of judgment.

p. 4

Legal principles established

#
  • The label given to a contract (e.g. 'consultancy agreement') and the description of remuneration as a fee rather than salary do not determine the nature of the relationship; courts apply a multi-factor test including control, integration, and the award of employment-type benefits.
  • Where the employment relationship is established and the employer admits the employee left, the employer bears the obligation to produce payment records; failure to rebut a claim with records means the claimed amount is proved.

Court orders

#
  1. 1.Judgment entered for the Claimant for salary arrears of Kshs. 1,341,330/-, subject to statutory deductions
  2. 2.Costs of the suit awarded to the Claimant
  3. 3.Interest at court rates from the date of judgment

Authorities

#

Legislation

  • Employment and Labour Relations Court ActSection 12(1)
  • Employment ActSection 9(1)
  • Constitution of KenyaArticle 162(2)

Cases cited (6)

  • Eldoret Aviation Limited v Kenya Revenue Authority (through the Commissioner of Domestic Taxes)
    (2013) eKLR
  • Kollengode Venkatachala Laksminarayan v Intex Construction Limited
    (2020) eKLR
  • NIDRI Therese Assie Lumumba v Forum for Africa Women Educationists
    (2020) eKLR
  • Beloff v Pressdram Ltd
    (1973) All ER 241
  • Simmons v Health Laundry Company
    (1919) 1 KB 543
  • Kelly v Trust House Forte
    (1983) 3 eKLR 456
Jurisdiction invoked
Section 12(1) of the Employment and Labour Relations Court Act; Article 162(2) of the Constitution

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (4)

#

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

Cite this brief

#

Cite this brief

Caselaw, "Michael Otieno Ouma v Bonito Hotels Ltd t/a Tourist Hotel Bungoma [2022] KEELRC 944 (KLR)", Case Analysis (2022). Claim filed on 3rd April, 2019 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/944/eng@2022-02-02

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