Lwanga v Nation Media Group Limited (Appeal E017 of 2023) [2024] KEELRC 1412 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the appellant was an employee or an independent contractor
The entirety of the agreement and the payment records showed an employment relationship; the retainer was a monthly wage, the 25 days relief were leave days, PAYE was deducted at source and the appellant enjoyed medical cover, so he was not an independent contractor.
The court re-evaluated the correspondent agreement. Clauses 3.4 and 3.6 provided for tax deduction at source and 25 relief days on retainer. The payment statement showed gross wage, taxable wage and tax deduction, replicating Section 20 records. Relying on the Alfajiri Villas hallmarks of an independent contractor (own hours, own business, invoicing, no PAYE or leave), none applied to the appellant.
Whether the termination was lawful and fair
The termination notice of 24 May 2021 assigned no reason and was issued under the mistaken belief there was no employment relationship; it was unlawful and unfair.
Under Sections 35, 41, 43, 45 and 47(5) of the Employment Act, the employer must prove a valid and fair reason and follow fair procedure including notification and hearing. No reason was assigned for the termination here. The payment of one month in lieu of notice was for work done and did not amount to notice pay.
Assessment of remedies
Notice pay and compensation were computed on the last gross wage of Ksh.43,661 under Section 49(2); the trial court's 6 months compensation was adopted; annual leave pay of Ksh.43,661 was awarded for 30 accrued days; service pay was refused.
The last payment statement showed a gross/taxable wage of Ksh.43,661, the applicable base under Section 49(2). The magistrate's 6-month compensation allocation was retained given her advantage of hearing witnesses. The relationship lasted 17 months under the agreement, and the medical cover benefit disentitled the appellant to service pay under Section 35(5) and (6).
Legal principles established
#- Where a purported contractor is paid a monthly wage, enjoys leave relief, is on the payroll with PAYE deducted and holds medical cover, the relationship is one of employment despite contractual labels
- Termination of employment requires notice and a valid and fair reason proved by the employer under Sections 35, 41, 43 and 45 of the Employment Act
Court orders
#- 1.Judgment in Kilifi CM ELRC No. E23 of 2022 set aside
- 2.Declaration that the appellant was an employee of the respondent
- 3.Declaration that employment was terminated unlawfully and unfairly
- 4.Compensation awarded at Ksh.261,966
- 5.Notice pay Ksh.43,661
- 6.Leave pay Ksh.43,661
- 7.Costs of the appeal to the appellant
- On appeal from
- Magistrates' Court (Kilifi)
- Kilifi CM ELRC No. E23 of 2022
- Jurisdiction invoked
- First appeal under Section 12 of the Employment and Labour Relations Court Act, 2011 read with Section 2 of the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lwanga v Nation Media Group Limited (Appeal E017 of 2023) [2024] KEELRC 1412 (KLR)", Case Analysis (2024). Kilifi ELRC Appeal arising from Kilifi CM ELRC No. E23 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1412/eng@2024-05-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.