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ELRCPartially AllowedCause No 906 of 2017· [2022] KEELRC 1083 (KLR)

Pietro Lunghi v Simba Hospitality Services Limited t/a Villa Rosa Kempinski [2022] KEELRC 1083 (KLR)

Employment and Labour Relations Court
3 January 2022
JGJacob Gakeri
5,490 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that a 'consultancy' contract was actually employment, and blocking a chef from resuming duty after sick leave amounted to unfair constructive dismissal.

What this practically means

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Executive summary

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The Claimant, engaged under a contract styled a 'consultancy contract' as Chef De Cuisine (Italian) at USD 4,000 per month, sued for constructive dismissal after being barred from resuming duty on 3rd March 2017 following more than three months' sick leave, leading to his resignation on 17th March 2017. The Respondent maintained that the relationship was a genuine consultancy, pointing to invoicing, withholding tax, absence of statutory deductions and leave, and the Claimant's lack of a work permit. The court framed three issues: the nature of the engagement, whether there was constructive dismissal, and entitlement to reliefs. Applying the control and integration tests, and drawing on Rika J.'s decision in Kenneth Kimani Mburu and the Court of Appeal's principles in Coca Cola v Ligaga, the court held that the label and the parties' intention were not conclusive; the contract's salary, probation, fixed hours, tools of trade, non-delegation and exclusivity clauses established a contract of service. On constructive dismissal, the verbal, unexplained bar on resuming duty, the Respondent's failure to respond to the medical report and the protest resignation letter, and its three-month silence amounted to a repudiatory breach, and the Claimant resigned within a reasonable time. Judgment was entered for the Claimant: one month's salary (USD 4,000) as damages under Section 49(1) of the Employment Act, and accrued salary for November 2016 to February 2017 for days covered by sick sheets. Claims for anticipatory earnings of USD 24,000 and unproved medical costs were disallowed. The Claimant, partially successful, was awarded 50% of costs, with interest at court rates from judgment, subject to statutory deductions. Delivered virtually at Nairobi on 3rd January 2022 by Dr. Jacob Gakeri, J.

Key legal issues

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01

Whether the Claimant was an employee or an independent consultant

Holding

Despite the contract being styled a consultancy contract, the Claimant was an employee

Reasoning

A holistic evaluation showed features of a contract of service: monthly 'salary', probation clause, essential and integral role, tools of trade provided (uniform, meals, laundry, shoes), fixed working hours of 48 per week, non-delegation, prohibition on other work without permission, and control under the Chief Chef. Absence of statutory deductions and leave provisions did not negate employment. The absence of a work permit could not disguise the daily working relationship.

p. 6
02

Whether the Claimant was constructively dismissed

Holding

Yes, the Claimant was constructively dismissed

Reasoning

The Claimant returned from over three months' sick leave on 3rd March 2017 but was verbally barred from resuming duty pending legal advice, with no written communication or time frame. The Respondent ignored the doctor's report and gave no response to the protest resignation letter. Its ambivalence amounted to a repudiatory breach going to the root of the contract, and the Claimant resigned within a reasonable time as a direct consequence.

p. 7
03

What reliefs flow from the findings

Holding

One month's salary as damages and accrued salary for months with sick sheets; anticipatory income and medical costs refused

Reasoning

Under Section 49(1) of the Employment Act the Court exercised discretion, considering the one-year tenure, the Respondent's accommodation of the sickness, and the Claimant's prospects of comparable employment, to award one month's salary. Salary was awarded for November 2016 to February 2017 for days covered by sick sheets. Anticipatory earnings failed because the contract was terminable by notice; medical costs failed as unproved special damages.

p. 7

Legal principles established

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  • The label the parties give a contract is not conclusive of its nature; courts look at the relationship as a whole
  • Control and integration into the business are central indicators of a contract of service
  • Constructive dismissal requires a repudiatory breach going to the root of the contract and resignation within a reasonable time in response to it
  • Barriers to resuming duty after sick leave without explanation may amount to a repudiatory breach

Court orders

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  1. 1.Judgment entered for the Claimant
  2. 2.Damages for unfair constructive dismissal equivalent to one month's salary (USD 4,000) under Section 49(1) of the Employment Act
  3. 3.Payment of accrued salary for November 2016 to February 2017 for days covered by sick leave sheets, excluding days without sick sheets
  4. 4.Claim for loss of anticipated income of USD 24,000 disallowed
  5. 5.Claim for medical costs disallowed
  6. 6.Claimant awarded 50% of the costs of the suit
  7. 7.Total sum awarded subject to all statutory deductions
  8. 8.Interest at court rates from the date of judgment until payment in full

Authorities

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Legislation

  • Employment ActSection 2 (definitions of employee and employer)
  • Employment ActSection 10(3)
  • Employment ActSection 10
  • Employment ActSection 49(1)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (8)

  • Kenneth Kimani Mburu & another v Kibe Muigai Holdings Limited
    [2014] eKLR
  • David Odwori Namohisa v Magnate Ventures Limited
    [2017] eKLR
  • Coca Cola East & Central Limited v Maria Kagai Ligaga
    [2015] eKLR
  • Lorna Adhiambo Aling v Safi International AS
    [2017] eKLR
  • Kollengode Venkatachala Laksminarayan v Intex Construction Limited
    [2020] eKLR
  • Robert Indiazi v Tembo Sacco Limited
    [2018] eKLR
  • Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance
    [1968] 2 QB 497
  • Western Excavating ECC Ltd v Sharp
    [1978] 2 WLR 344
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (claim for unfair/constructive dismissal); Article 159(2)(d) and Article 48 of the Constitution referred to on virtual delivery

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, "Pietro Lunghi v Simba Hospitality Services Limited t/a Villa Rosa Kempinski [2022] KEELRC 1083 (KLR)", Case Analysis (2022). Cause No 906 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1083/eng@2022-01-03

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