Wambugu v Foresight Ventures Limited (Cause 742 of 2019) [2024] KEELRC 2515 (KLR)
The bottom line
#Kenya's Employment Court ruled that a 'consultancy' label doesn't hide an employment relationship, but rejecting a varied role isn't constructive dismissal.
What this practically means
#Executive summary
#Key legal issues
#Whether an employment relationship existed despite the contract being styled a consultancy agreement
Yes. The Claimant occupied the central position of Acting Managing Director, integral to the Respondent's core business, so the 'consultancy' label did not alter the employer/employee relationship.
The court applied the statutory definitions in section 2 of the Employment Act and Black's Law Dictionary, emphasising the employer's right to control work performance. Relying on Rika J's decision in Kenneth Kimani Mburu, it held that the existence of an employment contract is discerned from the parties' conduct, not merely the terms used. Because the Claimant was at the centre of the Respondent's core business rather than on its periphery, the relationship was one of employment. This finding also answered the Respondent's jurisdictional objection.
Whether the Claimant was constructively dismissed
No. The Claimant resigned after declining a varied role (brand ambassador) offered on 3rd March 2019; rejecting revised terms does not amount to constructive dismissal.
The court adopted the Court of Appeal's principles in Coca Cola v Ligaga, including the objective test, causation and the employee's burden of proving repudiatory breach. On the facts, the Respondent raised performance concerns and offered a varied role which the Claimant declined. Applying section 10(5) of the Employment Act as explained by Rika J in Emmanuel Wambua Muthusi, variation requires consultation, revision and notification, not agreement; an employee may accept or reject revised terms. Having declined the new position, the Claimant could not claim constructive dismissal.
Whether the Claimant is entitled to the remedies sought
No. The claim having failed in its entirety, no remedies were awarded.
Having found that an employment relationship existed but that constructive dismissal was not established, the court held that the foundation for the remedies - 12 months' salary as compensation, Kshs. 9,950,000 in alleged underpayment and Kshs. 500,000 in unpaid allowances - fell away. The entire claim was accordingly dismissed, with each party bearing its own costs.
Legal principles established
#- The existence of an employment relationship is discerned from the conduct of the parties and the substance of the role, not the label used in the contract; a role central to the employer's core business is not a consultancy merely because it is termed one.
- Under section 10(5) of the Employment Act, an employer may vary contractual terms by consulting the employee, revising the contract and notifying the employee in writing; agreement is not required, and an employee's rejection of varied terms does not amount to constructive dismissal.
Court orders
#- 1.The Claimant's entire claim is dismissed
- 2.Each party to bear their own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (Respondent disputed jurisdiction; court found an employment relationship existed)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Adhiambo v Eidu Education Limited (Cause E582 of 2021) [2025] KEELRC 2276 (KLR)[2025] KEELRC 2276 (KLR)31 Jul 2025applied
Cite this brief
#Cite this brief
Caselaw, "Wambugu v Foresight Ventures Limited (Cause 742 of 2019) [2024] KEELRC 2515 (KLR)", Case Analysis (2024). Memorandum of Claim dated 5th November 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2515/eng@2024-10-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.