Mvungu v Wambua & 2 others (Cause E732 of 2022) [2025] KEELRC 1539 (KLR)
The bottom line
#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
#Executive summary
#Key legal issues
#Jurisdiction of the ELRC over claims arising from consultancy agreements
The court has jurisdiction because the claimant, though labelled a consultant, was in substance an employee
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.
Whether the claimant was an employee or an independent consultant
The claimant was an employee despite the consultancy label in the agreement
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.
Whether the termination was fair and lawful
The termination was unfair and unjustified as the claimant was given no notice or hearing
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.
Legal principles established
#- 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
#- 1.Payment of 1 month salary in lieu of notice of Kshs. 140,000
- 2.Payment of 5 months' salary as compensation for unfair termination, being 5 x 140,000 = Kshs. 700,000
- 3.Total award of Kshs. 840,000 less statutory deductions
- 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
#Practical implications
#Frequently asked questions
#Cite this brief
#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.