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ELRCAllowedNaivasha CMELRC No. E005 of 2022 (Appeal)

Githinju v Elsamere Conservation Centre (Employment and Labour Relations Appeal E032 of 2023) [2024] KEELRC 979 (KLR)

Employment and Labour Relations Court
30 April 2024
3,413 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed that employers who claim a worker was a 'consultant' must produce a written contract, or they lose—and pay.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Naivasha against the judgment of Chief Magistrate Nathan Lutta in CMELRC No. E005 of 2022 delivered on 4th October 2023, which dismissed the appellant's claim on the basis that he was an independent contractor rather than an employee. The appellant, engaged as an accountant at a monthly pay of Kshs 45,000 later increased to Kshs 67,500, asserted he was a verbally employed employee summarily terminated on 23rd December 2021 without reasons or a disciplinary hearing. The respondent maintained he was a consultant engaged to avoid PAYE, paying 5% withholding tax, whose contract expired in December 2021. On appeal, Wasilwa J re-evaluated the evidence as required on a first appeal. The decisive finding was that the respondent never produced the alleged consultancy agreement, and under section 10(7) of the Employment Act the burden of proving the alleged terms of engagement falls on the employer. The court held the appellant was an employee whose termination was not guided by section 41 of the Employment Act, rendering it unfair. The appeal was allowed, the trial court's judgment set aside and substituted with judgment for the appellant, awarding one month's salary in lieu of notice (Kshs 67,500), service pay (Kshs 33,750), six months' salary as compensation for unfair termination (Kshs 405,000), and leave pay (Kshs 67,500), totalling Kshs 573,700, less statutory deductions, with costs of the appeal to the respondent. Judgment was delivered virtually on 30th April 2024.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the trial Magistrate erred in failing to analyse and accord due weight to the claimant's evidence
  2. 2.Whether the trial court considered materials not in evidence and displayed bias (the 'payroll'/muster roll and date discrepancies)
  3. 3.Whether the appellant was an employee of the respondent or an independent contractor
  4. 4.Whether the termination of the appellant's services was fair and lawful
  5. 5.Whether the trial court erred in awarding costs to the respondent

Key legal issues

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01

Whether the appellant was an employee or an independent contractor

Holding

The appellant was an employee of the respondent, not an independent contractor.

Reasoning

The respondent alleged a consultancy arrangement but never produced any consultancy agreement in evidence. Under section 10(7) of the Employment Act, the burden of proving the alleged terms of engagement lies with the employer where no written contract is produced. The appellant's evidence of monthly pay, supervision by the CEO and company-provided tools of trade pointed to employment. The trial court erred in reaching a contrary finding.

p. 6
02

Whether the termination was unfair

Holding

The termination was not guided by section 41 of the Employment Act and was therefore unfair.

Reasoning

Having found the appellant was an employee, the court assessed the circumstances of the termination against the procedural fairness requirements of section 41 of the Employment Act, 2007. The respondent gave no reasons and subjected him to no disciplinary hearing; the termination therefore lacked procedural fairness, justifying compensation of six months' salary.

p. 7
03

Whether the trial court's judgment was vitiated by error or bias

Holding

The trial court failed to be guided by the burden-of-proof rule and reached an erroneous decision dismissing the claim.

Reasoning

The court found the trial court erred in treating the appellant as an independent contractor despite the respondent's failure to produce a written consultancy contract, and further made findings of fraud that were not a pleaded or determining issue in the termination. Those errors warranted setting the judgment aside.

p. 7

Legal principles established

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  • Where an employer fails to produce a written contract of employment, the burden of proving or disproving the alleged term of employment rests on the employer.
  • An employer should issue an employee with a written contract; absent one, the employer bears the burden of proving the alleged terms of engagement.
  • On a first appeal the court re-evaluates the evidence and may affirm, reverse or vary the trial court's findings.

Court orders

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  1. 1.The appeal is allowed and has merit
  2. 2.The Hon. Chief Magistrate's judgement in ELRC No. E005 of 2022 is set aside and substituted with judgment in favour of the appellant
  3. 3.1 month salary in lieu of notice of Kshs 67,500
  4. 4.Service pay as pleaded of Kshs 33,750
  5. 5.Compensation of 6 months' salary as damages for unfair termination of Kshs 405,000
  6. 6.Leave pay of Kshs 67,500
  7. 7.Total award less statutory deductions
  8. 8.The respondent will pay the costs of this appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

On appeal from
Chief Magistrates Court at Naivasha (ELRC)
CMELRC No. E005 of 2022
Jurisdiction invoked
First appeal to the Employment and Labour Relations Court from the Chief Magistrate's Court (ELRC proceedings)

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In this case, the respondent never produced any written contract. It is therefore the appellants word against the respondent which burden the appellant didn't discharge that the respondent was an independent consultant as opposed to an employee.
p. 6Burden of proof on employer absent written contract
It is my finding that the appellant was an employee of the respondent and circumstance of his termination not being guided by the law in particular section 41 of the Employment act 2007, I find that indeed the appeal has merit and is allowed.
p. 7Employee status and unfair termination
In the circumstances the Hon. Chief Magistrate's judgement in ELRC no E005 of 2022 is set aside and substituted with judgement in favour of the appellant as follows.
p. 7Final orders - setting aside and substitution
Total = 573,700/= less statutory declaration. The respondent will pay cost of this appeal
p. 7Final orders - quantum and costs

Issues in the judgment

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minor

Arithmetic inconsistency in the award: the itemised figures (67,500 + 33,750 + 405,000 + 67,500) total Kshs 573,750, but the judgment states a total of 573,700/=

minor

Internal inconsistency in the compensation computation: six months' salary compensation is computed as '6x75,000' while the pleaded salary was 67,500

minor

The judgment records the claimant's employment start date inconsistently with the pleaded claim (25th September 2020 versus 28th September 2020)

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, "Githinju v Elsamere Conservation Centre (Employment and Labour Relations Appeal E032 of 2023) [2024] KEELRC 979 (KLR)", Case Analysis (2024). Naivasha CMELRC No. E005 of 2022 (Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/979/eng@2024-04-30

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