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ELRCDismissedCause No E213 of 2021· [2023] KEELRC 1473 (KLR)

Kuria v Tigoni Water Supply Co Ltd (Cause E213 of 2021) [2023] KEELRC 1473 (KLR)

Employment and Labour Relations Court
8 June 2023
BMB. O. M. Manani
2,968 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan director claiming employment benefits lost because he had no contract, pay slips, or statutory deductions proving he was an employee.

What this practically means

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Executive summary

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The claimant alleged he was employed by the respondent from January 1998, first as operations director and later as executive director earning a net monthly salary of Kshs 100,000.00, until his retirement on January 31, 2020. He claimed gratuity for twenty-two years of service and accrued leave dues, contending these were payable to all retiring employees and that the respondent's failure to pay him violated constitutional protection against discrimination and caused emotional anguish and financial embarrassment. The respondent denied any employment relation, contending the claimant served voluntarily as a member of its board of directors, attracting only board meeting allowances and reimbursement of out-of-pocket expenses. The court identified the central issue as whether an employment relation existed. It reaffirmed that directors are officers of a company and not, without more, employees, and that executive directors are not prima facie employees either; dual status must be established by evidence such as a written contract of service, payment of a regular salary, or remittance of statutory deductions. The claimant produced no pay slips, no evidence of PAYE, NSSF or NHIF deductions, and gave shifting accounts of his alleged salary. The respondent produced pay slips for three named employees showing deductions and an expenses ledger and schedule recording the claimant under directors' expenses, isolated from wages. The court held the claimant failed to discharge the burden of proving his employment status, and dismissed the claim, awarding costs to the respondent.

Key legal issues

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01

Whether the claimant, a self-described executive director, was also an employee of the respondent

Holding

He was not; no evidence of a contract of service, pay slips, or statutory deductions established employment status

Reasoning

The court noted the general position that directors are officers, not employees, and that dual status must be proved by evidence. The claimant produced no pay slips and no evidence of PAYE, NSSF or NHIF deductions, while the respondent showed its employees had pay slips and deductions and that the claimant's expenses were recorded under directors' expenses. The burden of proof lay on the claimant and was not discharged.

p. 5
02

Whether the ELRC had jurisdiction over the claim

Holding

Jurisdiction depended on proof of an employment relation, which was the central issue for determination

Reasoning

The court held that the ELRC must ascertain that a matter arises from or affects an employment relation to assume jurisdiction. Since the existence of the employment relation was contested, it became the central issue; had it been resolved against the claimant, the claim would fall outside the court's jurisdiction.

p. 2

Legal principles established

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  • The ELRC's jurisdiction depends on the existence of an employment relation; disputes outside it fall outside the court's jurisdiction
  • Whether a director is also an employee of a company is a question of fact requiring evidence, such as a written contract of service or proof of salary payment and statutory deductions
  • Executive directors, like non-executive directors, are not prima facie employees of a company
  • A pay slip is generated by the employer but issued to and ordinarily kept by the employee under section 20 of the Employment Act

Court orders

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  1. 1.The claim is dismissed
  2. 2.Costs of the action granted to the respondent

Authorities

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Legislation

  • Employment Actsection 20
  • Employment Actsection 2 (definition of contract of service)

Cases cited (3)

  • Chilliebush v Johnston and Others
    (JR1234/08) [2010] ZALCJHB 35 (26 January 2010)
  • Rift Valley Water Services Board & 3 others v Asanyo & 2 others
    (Civil Appeal 60 & 61 of 2015 (Consolidated)) [2022] KECA 778 (KLR)
  • McMillan v Guest
    [1942] AC p.561
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court over disputes arising from or affecting an employment relation

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, "Kuria v Tigoni Water Supply Co Ltd (Cause E213 of 2021) [2023] KEELRC 1473 (KLR)", Case Analysis (2023). Cause No E213 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1473/eng@2023-06-08

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