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ELRCPartially AllowedAppeal from Mombasa CM ELRC E106 of 2022· [2024] KEELRC 2809 (KLR)

Assad & another (As Trustees of Global Pastrolist Organisation) v Mutile & 4 others (Appeal E098 of 2024) [2024] KEELRC 2809 (KLR)

Employment and Labour Relations Court
14 November 2024
2,254 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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This first appeal challenged the judgment of the magistrates' court (Mombasa CM ELRC E106 of 2022) delivered on 18 April 2024, which had allowed five respondents' claims of Ksh.1,771,735 against the appellants for construction of mosques in Mombasa, Kwale and Kilifi between 2018 and 2021, holding an employment relationship existed under Section 37 of the Employment Act. The appellants argued the suit was procedurally defective under Order 1 Rule 13(2) and Order 4 Rule 1(3) of the Civil Procedure Rules, that the 2nd appellant was not a trustee of the Global Pastoralist Organization, and that the respondents were independent contractors, not employees. On the procedural point, the court held the operative rules were the ELRC (Procedure) Rules, 2016, under which a single claimant could bring a representative claim. However, it found the 2nd appellant's lack of trusteeship was a material fact the trial court should have resolved with finality. On the merits, the court noted the 1st respondent admitted being a contractor paid per completed project with materials supplied by the company, and concluded the claims - labour charges, transport and materials - were purely commercial, arising from independent contracts outside the Employment Act. Without an employment relationship, an essential element of a claim before the ELRC was lost and the trial court should have declined jurisdiction. The appeal was allowed: the trial judgment was set aside in its entirety, with each party bearing its own costs, the latter reflecting the court's view that both sides should have raised these legal questions earlier.

Key legal issues

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01

Applicable procedural rules on claims by multiple claimants

Holding

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.

Reasoning

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.

p. 5
02

Standing of the 2nd appellant

Holding

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.

Reasoning

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.

p. 5
03

Employment relationship versus independent contractor

Holding

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.

Reasoning

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.

p. 6
04

Forum for independent contractor claims

Holding

The primary forum for a commercial claim for work done by an independent contractor is not the ELRC.

Reasoning

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.

p. 6

Legal principles established

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  • 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

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  1. 1.The appeal is found to have merit
  2. 2.The judgment in Mombasa CM ELRC No. E106 of 2022 is set aside in its entirety
  3. 3.Each party is to bear its costs

Authorities

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Legislation

  • Employment ActSection 37
  • Employment ActSection 10(7)
  • Employment ActSection 2
  • Employment ActSection 18(1)
  • Civil Procedure RulesOrder 1 Rule 13(1) and (2)
  • Civil Procedure RulesOrder 4 Rule 1(3)
  • Employment and Labour Relations Court (Procedure) Rules, 2016Rule 4
  • Employment and Labour Relations Court (Procedure) Rules, 2016Rule 9

Cases cited (10)

  • Savala & another v Ndanyi
    ELC Civil Case 248 of 2021
  • Nanyuki Water & Sewerage Company Limited v Benson Mwiti Ntiritu & others
    [2018] eKLR
  • Josphat Njuguna v High Rise Self Help Group
    [2014] eKLR
  • Abigail Yator v China Hannan International
    Cause No. 136 of 2028 (Eldoret)
  • Krystalline Salt Limited v Kwekwe Mwakele & 67 others
    [2017] eKLR
  • Ready-mix Concrete (South East) Ltd v Minister of Pensions and National Insurance
    1968 2 QB
  • Kenya Hotels and Allied Workers Union v Alfajiri Villas (Magufa) Ltd
    [2014] eKLR
  • Fredrick Byakika v Mutiso Menezes International Limited
    [2016] eKLR
  • Ekisa v Highland Primary School; Wachira & 2 others (Interested Parties)
    [2022] KEELRC 3831 (KLR)
  • Uap Life Assurance Company Limited v Commissioner of Domestic Taxes
    [2019] KEHC 412 (KLR)
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

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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, "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.