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ELRCPartially AllowedNot stated in the judgment provided· [2023] KEELRC 2265 (KLR)

Westbuild General Contractors Ltd v Ntinyari & 17 others & another (Employment and Labour Relations Appeal E001 of 2023) [2023] KEELRC 2265 (KLR)

Employment and Labour Relations Court (first appellate court)
29 September 2023
2,812 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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This was a first appeal to the Employment and Labour Relations Court at Nyeri (Onesmus N Makau, J) against a magistrates' court judgment (Hon. D.W. Nyambu, CM) awarding 18 employees Kshs 7,741,334.72 against a road contractor (appellant) and the supervisor's representative (2nd respondent) following a strike and cessation of employment over unpaid salaries on two road projects in Embu and Tharaka Nithi. The appellant contended it was never the employer: the stafi were engaged and supervised by the 2nd respondent, and the appellant merely paid their wages as paymaster under Clause 01-08-030 of the Works Contract with the Ministry of Transport and Infrastructure, with entitlement to reimbursement plus overheads and profit. The court framed four issues: identity of the employer, joinder of the Ministry, liability for dues, and the quantum awarded. It held that a contract of service under Section 2 of the Employment Act is essential, and on the evidence (Clause 01-08-030, and the witnesses' admissions that they were interviewed, instructed and supervised by the 2nd respondent) the appellant was not the employer; the employees belonged to the 2nd respondent. The claim of refusal to join the Ministry was found unfounded, as the joinder had been allowed and the third party participated in the trial. On liability, the 2nd respondent was liable in law, with the appellant contractually bound to pay and entitled to indemnity from the contracting authority. The award of 16 months' salary was unsupported - non-payment ran only six months - and was re-assessed at 7 months' gross salary, aggregating Kshs 4,202,171.40, with salary increment arrears set aside. The appeal was allowed to that extent, judgment set aside and substituted, liability made joint and several with indemnity against the Ministry, subject to statutory deductions, with each party bearing its own costs of the appeal.

Key legal issues

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01

Whether the appellant was the employer of the 1st respondents

Holding

The appellant was not the employer; the employees belonged to the 2nd respondent (supervisor's representative). The appellant merely paid them as paymaster/agent and was entitled to reimbursement.

Reasoning

Clause 01-08-030 of the Works Contract required the contractor to pay wages of attendant stafi belonging to the Engineer. The witnesses admitted under oath that they were interviewed, instructed and supervised daily by the 2nd respondent. Payment of salaries, issuance of pay slips and remission of statutory deductions were done as agent, which does not create a contract of service with the appellant.

p. 4
02

Whether the trial court refused to join the Ministry of Transport and Infrastructure as third party

Holding

The trial court had in fact allowed the joinder; the third party participated in the trial, and the suit against it was merely dismissed after hearing. The ground of appeal was unfounded.

Reasoning

The typed proceedings showed the application to join the Ministry was granted, a preliminary objection against the joinder was dismissed, and the third party filed a defence and participated in the trial. The court only dismissed the suit against the third party after the hearing, so the appellant could not fault it for refusing joinder.

p. 5
03

Who is liable to pay the 1st respondents' dues

Holding

The 2nd respondent is liable in law as employer; the appellant is also liable under the project contract as paymaster, with entitlement to reimbursement/indemnity from the contracting authority.

Reasoning

Having found the 2nd respondent was the employer, the primary duty to pay salary and terminal dues lies with it. However, under the project contract the appellant was bound to pay the stafi and seek reimbursement, making it liable as well. Apportionment of liability was rejected as the contract placed the payment duty on the appellant.

p. 5
04

Whether the award of Kshs 7,741,334.72 should stand

Holding

The award of 16 months' salary was unsupported by evidence; it was reduced to 7 months' gross salary (6 months' unpaid salary November 2018 to April 2019 plus one month in lieu of notice), aggregating Kshs 4,202,171.40.

Reasoning

Evidence showed non-payment only from November 2018 to April 2019, i.e. six months, not sixteen. The court therefore interfered with the quantum and re-assessed each employee's award at 7 months' gross salary. The claim for salary increment arrears was set aside for want of particulars and evidence.

p. 5

Legal principles established

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  • There cannot be an employer/employee relationship without existence of a contract of service.
  • A contractor paying a supervisor's stafi as paymaster under a project contract does not thereby become their employer.
  • A first appellate court re-evaluates evidence and does not interfere with findings of fact not shown to be unsupported by evidence or based on misapprehension of law.

Court orders

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  1. 1.The respondents' are entitled to Kshs 4,202,171.40.
  2. 2.The 2nd respondent and the appellant are liable, individually and severally, to the said sum to the 1st respondent.
  3. 3.The 2nd respondent and the appellant are entitled to indemnity from the contracting authority, Ministry of Transport and Infrastructure for any money they shall pay the 1st Respondent in settlement of the decretal sum.
  4. 4.The award shall be subject to statutory deductions.
  5. 5.Each party shall bear own costs of the appeal.

Authorities

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Legislation

  • Employment ActSection 2 (definition of contract of service and employee)
  • Employment and Labour Relations Court (Procedure) RulesRule 28(3)

Cases cited (2)

  • Mwanasokoni v Kenya Bus Services Limited (Mombasa) Civil Appeal No 35 of 1985 (UR)
    Civil Appeal No 35 of 1985 (UR)
  • Stanley Mungai Muchai v National Oil Corporation of Kenya (2021) eKLR
    (2021) eKLR
On appeal from
Magistrates' Court (ELRC)
Not stated
Jurisdiction invoked
First appeal under ELRC jurisdiction (Employment and Labour Relations Court Procedure Rules invoked; first appellate re-evaluation mandate)

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, "Westbuild General Contractors Ltd v Ntinyari & 17 others & another (Employment and Labour Relations Appeal E001 of 2023) [2023] KEELRC 2265 (KLR)", Case Analysis (2023). Not stated in the judgment provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2265/eng@2023-09-29

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