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ELRCPartially AllowedMemorandum of Claim dated March 12, 2018· [2024] KEELRC 574 (KLR)

Ulalo v Nation Media Group (Cause 292 of 2018) [2024] KEELRC 574 (KLR)

Employment and Labour Relations Court
15 March 2024
BOByram Ongaya
1,562 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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The claimant, engaged as a freelance sales executive from 2010 to July 27, 2017, sued for wrongful and unlawful summary dismissal, claiming notice pay, leave, gratuity, 12 months' compensation and a certificate of service. The respondent asserted the claimant was an independent contractor terminable on 24 hours' notice and that he was paid all commissions. The court, Byram Ongaya, Principal Judge, first determined the threshold question of whether a contract of service existed. Following its own prior decision in Edward Ngarega Gacheru v Nation Media Group Limited [2019] eKLR, the court held that the existence of employment is a matter of fact, not contractual labelling. Evidence that the claimant had a staff number, was on the payroll, subject to PAYE, appraisals, and workplace regulation established an employer-employee relationship notwithstanding the independent contractor label; contracts camouflaged to defeat the Employment Act's minimum protections are disregarded. The court then found the termination abrupt, without notice or hearing, and unfair under sections 41 and 45 of the Employment Act. Applying section 49 factors, and noting the retainer of Kshs. 45,000 per month, the court awarded compensation of 6 months' salary, Kshs. 270,000 less PAYE, reducing the award because the claimant contributed to his predicament by raising no grievance. The notice, leave, 30% deduction and gratuity claims failed for lack of particulars and strict proof as special damages, with unsupported claims deemed abandoned. Judgment was entered for the claimant for Kshs. 270,000 payable by May 1, 2024 with interest on default, and the respondent was ordered to pay the costs of the suit.

Key legal issues

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01

Whether the freelance sales executive arrangement was a contract of service governed by the Employment Act, 2007

Holding

Yes - despite the contract describing the claimant as an independent contractor, the parties were in a contract of service

Reasoning

The court held that the existence of an employment relationship is determined by the facts of control, integration and conduct, not the contractual label. The claimant was under the respondent's control, had a staff number, was on the payroll, subject to PAYE deduction, internal appraisals and workplace regulation. Following Edward Ngarega Gacheru v Nation Media Group Limited, contracts camouflaged to defeat statutory minimum protections are disregarded and the Employment Act applies.

p. 2
02

Whether the termination was unfair and what remedies are due

Holding

The termination was procedurally and substantively unfair; the claimant is entitled to compensation of 6 months' salary (Kshs. 270,000) less PAYE

Reasoning

The termination was abrupt, without notice or hearing, contravening sections 41 and 45 of the Employment Act. Applying section 49 factors, the court awarded 6 months' salary based on the retainer of Kshs. 45,000 per month, reducing compensation because the claimant contributed to his predicament by raising no grievance. Other terminal dues claims failed for lack of particulars and strict proof of the basis of the sums claimed as special damages.

p. 4

Legal principles established

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  • The existence of a contract of employment is a matter of fact based on evidence and conduct, not merely the label in the contract; contracts camouflaged to defeat the Employment Act's minimum protections will be disregarded
  • Termination without due notice and hearing contravenes sections 41 and 45 of the Employment Act and is procedurally unfair

Court orders

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  1. 1.Payment of Kshs.270,000.00 by May 1, 2024 failing interest to be payable thereon at court rates from date of judgment till full payment
  2. 2.The respondent to pay costs of the suit

Authorities

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Legislation

  • Employment Actsections 41, 45, 49
  • Income Tax Actsection 35(3) as read with the 3rd Schedule

Cases cited (1)

  • Edward Ngarega Gacheru v Nation Media Group Limited
    [2019] eKLR
Jurisdiction invoked
Employment Act, 2007 (employment and labour relations jurisdiction)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Ulalo v Nation Media Group (Cause 292 of 2018) [2024] KEELRC 574 (KLR)", Case Analysis (2024). Memorandum of Claim dated March 12, 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/574/eng@2024-03-15

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