Assad & another (As Trustees of Global Pastrolist Organisation) v Mutile & 4 others (Appeal E098 of 2024) [2024] KEELRC 2809 (KLR)
The bottom line
#Kenya's Employment Court confirmed that disputes over paying independent contractors belong in commercial courts, not employment courts, and set aside a Ksh.1.77 million judgment.
What this practically means
#Executive summary
#Key legal issues
#Applicable procedural rules on claims by multiple claimants
The ELRC (Procedure) Rules, 2016, not Order 1 Rule 13(2) of the Civil Procedure Rules, governed the claim; a claim with an outline of what each claimant sought and represented by a single claimant was allowed under Rule 9.
The court held that the operative rules for employment and labour relations claims are the ELRC (Procedure) Rules. Under Rule 9 of the 2016 Rules applicable when the claim was filed on 17 March 2022, a claim outlining what each claimant sought and represented by a single claimant was permissible, defeating the appellants' procedural challenge.
Standing of the 2nd appellant
The admission that the 2nd appellant was not a trustee or official of the Global Pastoralist Organization was a material fact the trial court should have addressed first, with finality.
The appellants asserted that the 2nd appellant was not a trustee or official of the Global Pastoralist Organization and so could not contract with the respondents. The court found the respondents should have amended or removed the 2nd appellant, and that the trial court erred in not resolving the issue of standing with finality before proceeding to judgment.
Employment relationship versus independent contractor
The respondents' claims (labour charges, transport, materials costs) did not arise from an employment relationship but from independent contracts; without an employment relationship, an essential element of a claim before the ELRC was lost.
The 1st respondent admitted being a contractor paid per completed project, with materials supplied by the company. The court distinguished piece-rate employment (permitted under Section 18(1) of the Employment Act) from independent contracting, whose terms are purely commercial. The claims outlined related to projects, materials and labour payments, not employment benefits, so the trial court erred in applying Section 37 of the Employment Act.
Forum for independent contractor claims
The primary forum for a commercial claim for work done by an independent contractor is not the ELRC.
Having found no employment relationship, the court held the essential element for a claim before the ELRC was lost and the trial court should have declined jurisdiction. The dispute over payment for completed tasks is purely commercial and belongs in the appropriate commercial forum.
Legal principles established
#- Where a party sues or is sued on the basis of trusteeship or official capacity in an entity, the trial court must address a denial of that capacity first and with finality
- Disputes over payment for work done by independent contractors are commercial claims, not employment disputes, and the ELRC is not the primary forum for them
Court orders
#- 1.The appeal is found to have merit
- 2.The judgment in Mombasa CM ELRC No. E106 of 2022 is set aside in its entirety
- 3.Each party is to bear its costs
- On appeal from
- Magistrates' Court (ELRC), Mombasa
- Mombasa CM ELRC E106 of 2022
- Jurisdiction invoked
- First appeal from the magistrates' court in an employment and labour relations claim
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Assad & another (As Trustees of Global Pastrolist Organisation) v Mutile & 4 others (Appeal E098 of 2024) [2024] KEELRC 2809 (KLR)", Case Analysis (2024). Appeal from Mombasa CM ELRC E106 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2809/eng@2024-11-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.