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ELRCPartially AllowedNot stated in the judgment as provided (Memorandum of Claim dated 16th September 2022)· [2025] KEELRC 1539 (KLR)

Mvungu v Wambua & 2 others (Cause E732 of 2022) [2025] KEELRC 1539 (KLR)

Employment and Labour Relations Court
21 May 2025
1,884 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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A 'consultant' in Kenya may legally be an employee, and cutting them loose without notice or hearing can cost an employer months of salary plus costs.

What this practically means

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Executive summary

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The Claimant, Henry Muriithi Mvungu, sued the Respondents alleging unlawful and illegal termination of his engagement as General Manager/Consultant Operations under a management agreement dated 7th October 2019, earning a monthly retainer of Kshs. 130,000 and a stipend of Kshs. 10,000. He sought Kshs. 1,970,000, a certificate of service, costs and interest. The Respondents denied an employment relationship, contending the claimant was an independent consultant under a 12-month commercial consultancy agreement, and raised the question of the court's jurisdiction. The Claimant testified that he was sent on leave pending an investigation that never materialised, with no disciplinary proceedings; the Respondents' witness admitted no notice of termination was issued and no performance measures existed. The court held that its jurisdiction under section 12 of the ELRC Act is not narrowly confined, applying the Supreme Court's decision in Kenya Tea Growers Association v NSSF. On substance, the claimant was held to be an employee despite the consultant label, as he managed the Respondents' club. The termination, effected two months into the agreement without notice or hearing, was found unfair and unjustified. The court awarded one month's salary in lieu of notice (Kshs. 140,000) and five months' salary as compensation (Kshs. 700,000), totalling Kshs. 840,000 less statutory deductions, plus costs and interest from the date of judgment.

Key legal issues

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01

Jurisdiction of the ELRC over claims arising from consultancy agreements

Holding

The court has jurisdiction because the claimant, though labelled a consultant, was in substance an employee

Reasoning

The Respondents argued the claim concerned a commercial consultancy agreement outside the court's jurisdiction. Relying on section 12 of the ELRC Act and the Supreme Court's decision in Kenya Tea Growers Association v NSSF, the court held its jurisdiction extends beyond strict employer-employee relationships to any matter affecting an employer or employee, and on the facts the claimant was an employee in substance.

p. 5
02

Whether the claimant was an employee or an independent consultant

Holding

The claimant was an employee despite the consultancy label in the agreement

Reasoning

The claimant worked as General Manager/Consultant Operations, managed the Respondents' club, and was paid a monthly retainer of Kshs. 130,000 plus a Kshs. 10,000 stipend. Both parties' evidence showed he worked within the core business of the Respondents. The court looked at substance over form and found an employment relationship notwithstanding the contract's description.

p. 4
03

Whether the termination was fair and lawful

Holding

The termination was unfair and unjustified as the claimant was given no notice or hearing

Reasoning

The agreement provided for termination only for valid reasons such as misconduct or dishonesty. The engagement was terminated two months into the agreement without regard to those terms. The claimant was never accorded notice or a hearing, and no disciplinary proceedings were conducted, rendering the termination unfair and unjustified.

p. 5

Legal principles established

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  • The jurisdiction of the ELRC is not narrowly limited to an employer-employee relationship but extends to any matter that may affect an employer or an employee
  • The substance of a working relationship, not the label in the contract, determines whether a person is an employee

Court orders

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  1. 1.Payment of 1 month salary in lieu of notice of Kshs. 140,000
  2. 2.Payment of 5 months' salary as compensation for unfair termination, being 5 x 140,000 = Kshs. 700,000
  3. 3.Total award of Kshs. 840,000 less statutory deductions
  4. 4.Respondent to pay costs of the suit plus interest at court rates with effect from the date of the judgment
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act

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, "Mvungu v Wambua & 2 others (Cause E732 of 2022) [2025] KEELRC 1539 (KLR)", Case Analysis (2025). Not stated in the judgment as provided (Memorandum of Claim dated 16th September 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1539/eng@2025-05-21

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