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ELRCPartially AllowedNot stated in the judgment (Memorandum of Claim dated 10th April 2018)· [2024] KEELRC 898 (KLR)

Njuguna v Geosat Solutions Limited (Employment and Labour Relations Cause 541 of 2018) [2024] KEELRC 898 (KLR)

Employment and Labour Relations Court
5 April 2024
3,708 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a worker was an independent contractor, not an employee, so he lost termination protections but still recovered unpaid salary.

What this practically means

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Executive summary

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The Claimant sued the Respondent alleging that his employment as a principal officer in charge of motor vehicle assessment and valuation, which he said began on 21.06.2016 at a monthly salary of Kshs 40,000, was wrongfully and unfairly terminated on 15.12.2017 without notice, reasons or a fair hearing. He sought unpaid salary for three months (Kshs 120,000), one month's pay in lieu of notice, annual leave, paternity leave, house allowance, NSSF and NHIF remittances and costs associated with the non-issuance of a certificate of service. The Respondent denied an employment relationship, asserting the Claimant was an independent contractor on a monthly retainer who withdrew his Certificate of Proficiency and abandoned the engagement. The court framed the principal issue as whether the Claimant was an employee or an independent contractor. Applying the totality-of-relationship approach and the control, four-fold and integration tests as set out in Omusamia v Upperhill Springs Restaurant and Mungai v Avion Limited, and noting the absence of any documentary evidence from either side, the court found the Claimant was an independent contractor: he held the certificate of proficiency essential to the Respondent's registration, controlled his own schedule and was paid without statutory deductions. The employment claim was accordingly dismissed. However, because the Respondent's witness admitted under cross-examination that the Claimant was not paid for three months, the court ordered payment of Kshs 120,000 plus interest at court rates from the date of filing suit until full payment. Each party was ordered to bear its own costs. Judgment was delivered virtually in Nairobi on 5th April 2024 by Anna Ngibuini Mwaure, Judge.

Key legal issues

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01

Whether the Claimant was an employee or an independent contractor

Holding

The Claimant was an independent contractor, not an employee of the Respondent

Reasoning

Neither party produced any documents evidencing the relationship. The Claimant held the certificate of proficiency essential to the Respondent's business registration, determined his own working schedule, was not supervised, and was paid Kshs 40,000 monthly in cash without statutory deductions, no payslips or PAYE. The court applied the tests in Omusamia v Upperhill Springs Restaurant and Mungai v Avion Limited and found the arrangement was a contract for services.

p. 8
02

Recovery of unpaid salary despite the dismissal of the employment claim

Holding

The Claimant was awarded Kshs 120,000 for three months' unpaid salary, which the Respondent's witness admitted was not paid

Reasoning

RW1 admitted under cross-examination that the Respondent failed to pay the Claimant for three months due to low business. Even though the employment claim failed, the court ordered payment of the admitted debt with interest from the date of filing suit until payment in full.

p. 8

Legal principles established

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  • Where a claimant provides prima facie evidence tending to establish an employment relationship, the evidential burden shifts to the respondent to prove the relationship was one of independent contract (Section 109, Evidence Act)
  • In determining whether a worker is an employee or independent contractor, the court examines the totality of the relationship, applying tests such as the control test, the four-fold test and the integration test according to the circumstances of each case
  • A worker whose professional certificate is essential to the respondent's business, who is paid without statutory deductions and who controls his own working schedule may be an independent contractor

Court orders

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  1. 1.The claim against the Respondent is dismissed
  2. 2.The Respondent to pay the Claimant Kshs 120,000/- being three months' unpaid salary plus interest at court rates from the date of filing the suit until full payment
  3. 3.Each party to pay their respective costs of the suit

Authorities

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Legislation

  • Employment ActSection 9
  • Evidence ActSection 109
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d) and Article 48

Cases cited (5)

  • Omusamia v Upperhill Springs Restaurant (Cause 852 of 2017) [2021] KEELRC 3 (KLR)
    [2021] KEELRC 3 (KLR)
  • Mungai v Avion Limited (Cause 972 of 2016) [2023] KEELRC 399 (KLR)
    [2023] KEELRC 399 (KLR)
  • Ontario v Sagaz Industries Canada Inc.
  • Stevenson Jordon and Harrison Limited v MCdonald and Evans (1952)
    (1952)
  • Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance
    [2010] BTC 49 (as cited in Mungai v Avion Limited)
Jurisdiction invoked
Employment and labour relations jurisdiction under Article 162(2) of the Constitution (implied); Respondent challenged jurisdiction on the ground that the Claimant was not an employee

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, "Njuguna v Geosat Solutions Limited (Employment and Labour Relations Cause 541 of 2018) [2024] KEELRC 898 (KLR)", Case Analysis (2024). Not stated in the judgment (Memorandum of Claim dated 10th April 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/898/eng@2024-04-05

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