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ELRCPartially Allowed· [2023] KEELRC 399 (KLR)

Mungai v Avion Limited (Cause 972 of 2016) [2023] KEELRC 399 (KLR)

Employment and Labour Relations Court
16 February 2023
3,382 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that a worker called an 'independent contractor' was actually an employee, awarding him compensation for unfair dismissal.

What this practically means

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Executive summary

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The Claimant sued the Respondent alleging wrongful termination of his employment as a security guard, engaged around April 2015 and terminated without notice or reason. The Respondent denied an employment relationship, contending the parties dealt on an independent contractor-client basis and that the arrangement ended in July 2015 due to absenteeism. The court framed three issues: the nature of the relationship, whether the contract was unfairly terminated, and entitlement to reliefs. Applying the control test, the court found the Respondent determined the hours (night shift 6 pm to 6 am), the place (the Gachororo quarry) and paid a periodic wage, establishing a contract of service; the Respondent failed to discharge the evidential burden of proving an independent contract. On termination, the Respondent alleged absenteeism but produced no attendance records, warning letters, notice to show cause or disciplinary process, so the dismissal breached sections 41 and 43 of the Employment Act and was declared unlawful under section 45. On reliefs, service pay failed for want of one year's continuous service, and the public holiday claim failed for lack of particulars. The court awarded house allowance of Ksh 4,500 (15% of basic salary for three months), overtime pay of Ksh 9,216 for 384 excess hours, one month's salary in lieu of notice (Ksh 11,500) and six months' gross salary (Ksh 69,000) as compensation under section 49, with interest at court rates, subject to statutory deductions, plus costs and a Certificate of Service. Judgment was delivered online on 16 February 2023 by B O M Manani, Judge.

Key legal issues

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01

Contract of service vs contract for services

Holding

The parties were engaged under a contract of employment; the Respondent controlled the hours, time and place of work and paid a periodic wage.

Reasoning

Applying the control test, the court found the Respondent dictated night-shift hours (6 pm to 6 am) and the specific quarry (Gachororo) where the Claimant worked, and paid a periodic wage. Lack of interview and short duration were immaterial. The Claimant's prima facie evidence shifted the evidential burden to the Respondent, which failed to discharge it.

p. 4
02

Unfair termination

Holding

The termination was unlawful as the Respondent did not comply with sections 41, 43 and 45 of the Employment Act.

Reasoning

The Respondent alleged absenteeism but tendered no evidence of the absent days, no warning letters, no notice to show cause and no disciplinary process. The employer bears the burden of proving both the reason for termination and procedural fairness; failing which the termination is deemed unlawful under section 45.

p. 5
03

Reliefs: house allowance, overtime, notice pay and compensation

Holding

House allowance of Ksh 4,500 for three months, overtime pay of Ksh 9,216, one month's salary in lieu of notice (Ksh 11,500) and six months' salary (Ksh 69,000) as compensation were awarded; service pay and public holiday pay were declined.

Reasoning

House allowance at 15% of basic salary was payable under regulation 5 of the Regulation of Wages (Protective Security Services) Order, 1998 read with section 31 of the Employment Act. Working 12-hour days exceeded the 52-hour weekly maximum, generating 384 overtime hours payable at one and a half times the hourly rate. Notice pay followed sections 35 and 36, and compensation was assessed under section 49 considering the short duration of employment.

p. 6

Legal principles established

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  • The nature of a labour relation is determined by the totality of facts against applicable law, not the parties' own characterization of it.
  • Once an employee adduces prima facie evidence of a contract of service, the evidential burden shifts to the alleged employer to prove an independent contract.
  • Under section 47 of the Employment Act, the employee need only establish a prima facie case of unfair termination, whereupon the employer must justify the validity of the termination.

Court orders

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  1. 1.Declaration that the contract between the parties was one of employment and not an independent contractor arrangement
  2. 2.Declaration that the Respondent unlawfully terminated the Claimant's contract of employment
  3. 3.Award of unpaid house allowance of Ksh 4,500/-
  4. 4.Award of overtime pay of Ksh 9,216/-
  5. 5.Award of salary for one month in lieu of notice, Ksh 11,500/-
  6. 6.Award of compensation for wrongful termination equivalent to six months' gross salary, Ksh 69,000/-
  7. 7.Award of interest on the sums at court rates from the date of institution of the suit till payment in full
  8. 8.Award subject to applicable statutory deductions in terms of section 49 of the Employment Act
  9. 9.Award of costs of the case to the Claimant
  10. 10.Respondent ordered to issue the Claimant with a Certificate of Service under section 51 of the Employment Act

Authorities

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Legislation

  • Employment Actsections 18(2)(c), 31, 35, 36, 41, 43, 45, 47, 49, 51
  • Evidence Actsection 109
  • Regulation of Wages (Protective Security Services) Order, 1998regulations 5, 6, 7
  • ELRC Procedure RulesRule 28(3)

Cases cited (5)

  • Omusamia v Upperhill Springs Restaurant
    (Cause 852 of 2017) [2021] KEELRC 3 (KLR)
  • Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance
    [2010] BTC 49
  • Milano Electronics Limited v Dickson Nyasi Muhaso
    [2021] eKLR
  • National Bank of Kenya v Samuel Nguru Mutonya
    [2019] eKLR
  • Ngunda v Ready Consultancy Limited
    (Civil Appeal 129 of 2019) [2022] KECA 577 (KLR)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment and labour relations disputes (claim for unlawful termination under the Employment Act)

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, "Mungai v Avion Limited (Cause 972 of 2016) [2023] KEELRC 399 (KLR)", Case Analysis (2023). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/399/eng@2023-02-16

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