Ceciliah Kavutha Ngomba v The Majlis Lamu Limited aka Majlis Manda Island Resort Limited

academic. Everything else in this suit turns on it. This judgment must therefore begin where the dispute begins: by asking what, in truth and in substance, the Claimant was to the Respondent. B. The Claimant's Case 4. By a Memorandum of Claim dated 18th August 2025, led under Rule 7 of the Employment and Labour Relations Court (Procedure) Rules, 2024, the Claimant sued the Respondent. She pleaded that she was engaged verbally by the Respondent on 18th June 2019 as a Therapist, and that her wages were thirty percent (30%) commission of the jobs done by her, plus two percent (2%) of the jobs done as service charge, payable monthly. 5. She averred that she was a hardworking and diligent employee who needed little or no supervision, and that in November 2021 the Respondent, without any consultation with her and without her consent, reduced her wages from 30% to 20% and withdrew the 2% service charge altogether. When she sought an explanation, she was told that the reduction was occasioned by the COVID-19 pandemic, and she was promised that the withheld sums would be reimbursed once business picked up. 6. The Claimant stated that she continued to work, earning 20% and no service charge. Business recovered after the pandemic, but the Respondent remained adamant and did not restore her pay or reimburse the withheld sums. In 2024, the Respondent revised its spa price list and shared it with her to check and mark necessary amendments, which she did. She pleaded that she was the Respondent's best performing employee and relied on a message from the Respondent's Director describing her as "number 1". 7. She averred that after several futile demands for the 10% dierential and the 2% service charge, the Respondent terminated her employment verbally, in Lamu, on 15th February 2025, without notice, without reason and without a hearing. Her advocates issued a demand letter dated 20th June 2025, which was not honoured. 8. The Claimant sought the following reliefs: 9. (a) A declaration that the termination of her employment was unprocedural and unfair; (b) One month's salary in lieu of notice based on her last month's production of Kshs. 279,500 at 30%, being Kshs. 83,850.00; (c) Wage disparity of 10% withheld from 16th November 2021 to 15th February 2025, being Kshs. 1,463,254.90; (d) Service charge at 2% on the services rendered from 16th November 2021 to 15th February 2025, being Kshs. 292,650.98; (e) Maximum compensation for unfair termination, being Kshs. 1,006,200.00; (f) A certicate of service; (g) Interest on (c) and (d) from the date each payment fell due until payment in full; and (h) Any other award that the Court may deem t. In support of her claim, the Claimant led a witness statement dated 18th August 2025 and a bundle of documents comprising, inter alia, her monthly records of work and payments at 30% from June 2019 (CK.1), her records of work and computations from November 2021 (CK.2), the Respondent's https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 2

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spa price list (CK.3), her marked amendments to the price list together with WhatsApp exchanges with the Respondent's Director, Mr. Federico (CK.4), the Director's message describing her as "number 1" (CK.5), and her advocates' demand letter (CK.6). C. The Respondent's Case 10. The Respondent led a Response to the Memorandum of Claim dated 23rd September 2025, together with the witness statement of its Human Resource Manager, Mr. Tobiko, and a list of documents. 11. The Respondent's position was that the Claimant was engaged as a consultant and an independent service provider on a commission-only basis, primarily rendering therapy services to the Respondent and its clients, at 30% commission of the jobs done by herself. It pleaded that by her conduct throughout the entire period she was a consultant paid on commission and that she was content with that arrangement. 12. On the service charge, the Respondent averred that it was a xed percentage added to clients' bills to cater for its operational costs and as security for damages such as equipment breakages; that it was not automatically meant for the Claimant; and that it was solely within its discretion whether to issue any percentage of the service charge to "its employees and other individuals engaged by the Respondent on xed term contracts". 13. Regarding the reduction, the Respondent pleaded that commission percentages issued to all independent contractors were determined by prevailing business conditions and its discretion, and varied from time to time depending on client volume, pricing and operational costs. Its business had been greatly aected by the COVID-19 pandemic, and it had to make necessary adjustments to remain aoat. The changes were not unilateral or malicious but commercially necessary adjustments communicated to all service providers, including the Claimant, who raised no objection. The fact that she continued working demonstrated that she was comfortable with the 20% rate. It added that the 20% rate was above the industry standard of 16%, and that the Claimant also received meals and free accommodation at the resort. It denied making any legally binding promise to retain any particular percentage or to reimburse the withheld 10%. 14. The Respondent further averred that there was no executed paperwork showing that the Claimant was an employee, that she was not entitled to annual leave, notice pay and other basic minimum conditions of employment, and that her commission was never subjected to statutory deductions under section 19 of the Employment Act. 15. On the separation, the Respondent denied terminating the Claimant. It asserted that she left of her own accord, as indicated in her "resignation form", and never returned despite being contacted by one of its managers, Edward. It denied the particulars of breach, contended that the sums claimed were inated and bore no correlation to its records, and asserted that all commissions due had been paid. It relied on an excel comparison of the commissions it paid against the Claimant's computations for 2021 to 2025, a screenshot of a WhatsApp message from Edward, a uniform handover form dated 18th February 2025, and a payment voucher of the same date. It prayed that the claim be dismissed with costs. D. The Evidence at the Hearing 16. At the hearing, the Claimant testied, adopted her witness statement as her evidence in chief, and produced the documents in her bundle as her exhibits. Under cross-examination, she conceded that the Respondent did not make statutory deductions from the sums paid to her. She maintained that she did not accept the reduction of her pay, that she continued to press the Respondent to restore it https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 3

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and reimburse the withheld sums, and that she had been made to wait through the COVID-19 period on the understanding that she would be paid once business picked up. 17. The Respondent called its Human Resource Manager, Mr. Tobiko, who adopted his witness statement and produced the Respondent's documents. The statement largely contained facts as were brought out in the Statement of Response. Under cross-examination, he admitted that the uniform handover form produced by the Respondent described the Claimant as an "employee". E. The Submissions 18. The Respondent led written submissions dated 8th June 2026. It identied three issues: whether the Claimant was an employee or an independent consultant; whether she was unlawfully or unfairly terminated or voluntarily resigned; and whether she was entitled to the reliefs sought. It submitted that the Claimant was remunerated purely on commission for jobs she personally completed, received no xed salary, suered no statutory deductions and enjoyed no leave or other employment benets; that there was no written contract; and that where a person claiming to be an employee has worked for a sustained period without objecting to the terms of engagement, such conduct may be taken as acceptance of those terms. 19. It submitted further that the reduction was commercially justied, applied uniformly to all service providers, and accepted by the Claimant through four years of continued performance; that the uniform handover form marked "Resignation" was conclusive evidence of a voluntary departure; and that Edward's WhatsApp message showed that the Respondent was still seeking to engage with her. The Respondent relied on Communications Commission of Kenya & 4 others v Royal Media Services Ltd & 5 others [2014] eKLR, Samuel Kamau Macharia v Nation Media Group Limited [2016] eKLR and Rashid Salim Bakari v Mombasa Beach Hotel Limited [2017] eKLR. 20. It is important to point out that the Claimant’s submissions as led are incomplete. As such, this Court takes a deliberate decision not to summarize and consider them in this judgment. F. Issues for Determination 21. I have carefully considered the pleadings, the evidence, both oral and documentary, and the submissions on record. The following issues emerge for determination: (i) What was the nature of the relationship between the Claimant and the Respondent: was it a contract of service or a contract for service? (ii) If the Claimant was an employee, was her employment terminated by the Respondent, and if so, was the termination fair? (iii) Was the reduction of the Claimant's remuneration from 30% to 20% and the withdrawal of the 2% service charge lawful, and did the Claimant, by her conduct, acquiesce in the reduction and waive her right to pursue it? (iv) What reliefs, if any, is the Claimant entitled to? https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 4

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G. Analysis and Determination (i) The nature of the Relationship Why this question must be answered rst 22. The Respondent's defence rests, almost in its entirety, on a single proposition: that the Claimant was not its employee. If that proposition is correct, the Employment Act, 2007 does not reach the parties' relationship at all. There would then be no question of unfair termination under Part VI of the Act, no statutory notice, no compensation under section 49, no protection against unlawful deductions under sections 17 and 19, and no duty to consult under section 10(5). The Claimant's grievances would, at best, sound in the ordinary law of contract. 23. Conversely, if the Claimant was an employee, the full protective architecture of the Act, underpinned by the right to fair labour practices and to fair remuneration under Article 41 of the Constitution, is engaged, and every other question in this suit must be answered against that backdrop. The nature of the engagement is, therefore, the fulcrum on which the entire dispute turns. It is also a question that goes to the root of the Court's jurisdiction under section 12 of the Employment and Labour Relations Court Act, which is anchored on the existence of an employment relationship. It would be an exercise in futility to examine the fairness of the separation or the lawfulness of the pay reduction before determining whether the statute that governs those questions applies at all. I will therefore determine it at the outset. The Label is not Decisive; the Court Looks at the Substance 24. In disputes of this nature, the label that the parties, or more often the more powerful of the two, attach to their relationship is not conclusive. Whether a person is an employee is a question of law to be answered on the facts of the relationship as it actually operated, not on the name it was given. A relationship that bears all the hallmarks of employment does not cease to be one because it is called a "consultancy", and the Court's duty is to pierce the veil of the label and ascertain the true relationship between the parties. 25. The reason for this approach is plain. Labour law exists precisely because the parties to an employment relationship do not ordinarily bargain as equals. If the characterisation of the relationship were left to the label chosen by the employer, the protections that Parliament and the Constitution have aorded to workers could be defeated by the simple expedient of calling an employee something else. The Court would then be complicit in the very mischief the law seeks to cure. In Autoclenz Ltd v Belcher [2011] UKSC 41, the Supreme Court of the United Kingdom held that in employment cases the relative bargaining power of the parties must be taken into account in deciding whether the terms of any agreement truly represent what was agreed, and that the true agreement must often be gleaned from all the circumstances, of which any written agreement is only a part. The same court, in Uber BV v Aslam [2021] UKSC 5, emphasised that the question is one of statutory interpretation and not of contractual labels, and that protective legislation cannot be circumvented by the way in which the putative employer chooses to describe the relationship. 26. That approach resonates with our law. Section 2 of the Employment Act denes a "contract of service" as an agreement, "whether oral or in writing, and whether expressed or implied", to employ or to serve as an employee for a period of time. The denition is deliberately broad. It recognises that an employment relationship may arise by conduct, without any document at all. In this case there is no written contract of any kind, whether of service or for services. There is thus not even a document bearing the label https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 5

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"consultant" that the Respondent can point to. The label exists only in the Respondent's pleadings and its witness's statement, and it was applied, so far as the record shows, for the rst time in this litigation. 27. Before turning to the tests, I must observe that the Respondent relied on Communications Commission of Kenya & 4 others v Royal Media Services Ltd & 5 others [2014] eKLR for the proposition that the Supreme Court armed that the substance of a relationship, not its label, governs its characterisation, and that economic substance, control, provision of tools, the right to subcontract and the method of payment are relevant factors. With respect, the copy of the decision supplied to the Court is a ruling of the Supreme Court dated 13th February 2015 in Petitions 14, 14A, 14B and 14C of 2014 (Consolidated), concerning compliance with its orders on the migration from analogue to digital broadcasting. It says nothing about the distinction between employees and independent contractors. The proposition may well be sound, but it is not to be found in that authority. Counsel owe the Court a duty to cite authorities accurately and for what they actually decide. The Employee and the Independent Contractor Distinguished 28. An employee is a person who places his or her labour at the disposal of another, for wages, and who, in performing the work, is subject to that other's control, is integrated into that other's enterprise, and works for that other's business rather than his or her own. An independent contractor, on the other hand, is a person who is in business on his or her own account. He or she undertakes to produce a given result, but determines how, when and where the work is done; ordinarily provides his or her own tools, equipment and premises; is free to work for others and to delegate or subcontract the work; generally sources his or her own clients; bills for the work by way of invoice; and, critically, carries the nancial risk of the undertaking, standing to prot from sound management and to lose from poor management. The employee sells his or her labour; the independent contractor sells a service from his or her own business. 29. The courts have developed several tests to draw this line. The earliest, the control test, asks whether the putative employer has the right to control not only what is done but how, when and where it is done. As enterprises grew more complex and skilled workers came to exercise wide professional discretion, control alone proved an inadequate guide. The integration or organisation test was therefore formulated by Denning LJ in Stevenson, Jordan & Harrison Ltd v Macdonald & Evans [1952] 1 TLR 101, where he observed that under a contract of service a person is employed as part of the business and his work is done as an integral part of the business, whereas under a contract for services his work, although done for the business, is not integrated into it but is only accessory to it. 30. In Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, MacKenna J held that a contract of service exists if the servant agrees, in consideration of a wage or other remuneration, to provide his own work and skill in the performance of some service for his master; he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sucient degree to make that other master; and the other provisions of the contract are consistent with its being a contract of service. In Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173, Cooke J distilled the enquiry into a single question: is the person who has engaged himself to perform the services performing them as a person in business on his own account? If the answer is yes, the contract is one for services; if no, it is a contract of service. Relevant considerations include whether the person provides his own equipment, whether he hires his own helpers, what degree of nancial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of proting from sound management. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 6

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31. Our courts have embraced these tests and have consistently held that no single factor is decisive. The Court must take a holistic view of the whole relationship, weighing each factor against the others, and should not isolate any one feature and elevate it into a determinant. See, for instance, Everett Aviation Limited v Kenya Revenue Authority [2013] KEHC 6352 [ eKLR] and Maurice Oduor Okech v Chequered Flag Limited [2013] KEELRC [eKLR]. This is the so-called multiple or economic reality test, and it is the test I will apply. Who Bears the Burden of Proof 32. The Claimant pleaded that she was an employee. The Respondent did not merely deny that averment; it put forward an armative, positive case that she was a consultant and independent service provider. Under sections 107 and 109 of the Evidence Act, whoever desires the Court to give judgment on the existence of a fact that he asserts must prove that fact, and the burden of proof as to any particular fact lies on the person who wishes the Court to believe in its existence. 33. Where, as here, the existence of a working relationship is admitted, the worker was paid by the enterprise for work performed at its premises for its clients, and the putative employer contends that the relationship was one of client and independent contractor, the duty lies upon that employer to establish, to the requisite standard of a balance of probabilities, the facts that take the relationship outside the realm of employment. The Claimant discharged the initial burden by demonstrating a sustained relationship in which she personally rendered services, in the Respondent's spa, to the Respondent's guests, for remuneration paid monthly by the Respondent. The evidential burden then shifted to the Respondent to demonstrate that she was, in truth, in business on her own account. 34. That burden is reinforced by statute. Sections 9 and 10 of the Employment Act place the duty of reducing a contract of service to writing on the employer. Section 10(7) provides that if, in any legal proceedings, an employer fails to produce a written contract or the written particulars prescribed in section 10(1), the burden of proving or disproving an alleged term of employment stipulated in section 10(3) shall be on the employer. The Respondent kept no written contract of any description. It cannot rely on the absence of a document that it was obliged to prepare as proof that no employment existed. A party is not permitted to take advantage of its own wrong. The Method of Remuneration 35. The Respondent laid great emphasis on the fact that the Claimant was paid a percentage of the value of the treatments she performed, and received no xed salary. With respect, that fact does not carry the weight the Respondent seeks to place on it. 36. Section 2 of the Employment Act denes "wages" as remuneration or earnings, however designated or calculated, capable of being expressed in terms of money and xed by mutual agreement or by national law or regulation, which are payable by virtue of a written or unwritten contract by an employer to an employee for work done or to be done or for services rendered or to be rendered. The words "however designated or calculated" are signicant. The law is indierent to the formula by which wages are arrived at. A wage may be a xed monthly sum, an hourly or daily rate, a rate per piece, or a percentage of the revenue that the employee's work generates. The Act itself expressly recognises "piece work", that is, work the pay for which is ascertained by the amount of work performed irrespective of the time occupied in its performance. Remuneration by output is thus a recognised mode of paying employees, not a badge of independent contracting. 37. The fact that an employee's remuneration is expressed to be a percentage of the income generated by a section of an enterprise does not, without more, place the employee outside the realm of a contract https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 7

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of service and within the realm of a contract for service. Sales sta on commission, waiting sta who share in service charge, and piece-rate workers are all employees, even though their earnings rise and fall with their output. In such cases, the percentage is nothing more than a computational formula by which the employer determines what the employee's wages for the month shall be. What matters is not how the gure is computed, but the nature of the relationship within which it is paid. 38. The material placed before this Court by both parties leads me to the conclusion that the 30% and the 2% service charge were no more than such a formula. The Claimant's records of work (CK.1) run continuously from June 2019. Each is a monthly schedule, on the Respondent's name, "THE MAJLIS RESORT LTD.", of the treatments the Claimant performed. Each closes with the month's total, a computation of 30%, and the Claimant's signature against the word "Received". The Respondent's own comparison schedule is organised by month and records a "commission paid" gure for each month. The payment voucher of 18th February 2025, issued on the Respondent's letterhead, was prepared by one of its sta, Isaiah Otieno, and records a payment to "Cecilia" for "Massage commission". The messages in CK.4 and CK.5 show the Claimant asking the Respondent's Director, month after month, to "approve our commissions". There is no invoice, no receipt issued by the Claimant, no business name, no tax registration as a business, and no evidence of any negotiation between two traders. The picture is that of an employer computing and paying the monthly wages of its employee according to a formula it had set. The other Indicia of the Relationship 39. The method of payment aside, every other feature of the relationship disclosed by the evidence points in one direction. 40. First, the place and tools of work. The Claimant worked in the Respondent's spa, within the Respondent's resort, using the Respondent's premises and equipment. Tellingly, the Respondent's own case is that the service charge added to clients' bills was retained, among other things, as security for damages "such as equipment breakages". That averment is an admission that the equipment the Claimant used belonged to the Respondent. An independent contractor ordinarily brings his or her own tools of trade. 41. Second, the clients. The Claimant did not have clients of her own. She served the Respondent's guests. The treatments were billed on the Respondent's chits, at prices xed by the Respondent in its own spa price list (CK.3), under the Respondent's cancellation policy, which required guests to pay the Respondent. The revenue was collected by the Respondent, which then paid the Claimant her share. 42. Third, control and integration. The Respondent xed the prices of the treatments. It unilaterally determined the Claimant's rate of pay and, in 2021, unilaterally reduced it. Its Director sent her the revised price list and instructed her to "Print a copy and check", "Write on it the amendments", "Take a photo and Send back to me". She was asked to "check the Towel inventory as requested by Mr Stefano", a task that has nothing to do with the delivery of a therapy session and everything to do with the running of the Respondent's spa. Her monthly pay required the Director's approval. The Director ranked her against her colleagues, telling her "Remember that you are number 1", and assured her in the same exchange that "These ladies who are coming will stay for a while but then we push them out". That is the language of an employer speaking to a valued member of its team, not of a client speaking to an outside supplier. 43. Fourth, uniform and accommodation. The Claimant wore the Respondent's uniform, which was issued to her and which she handed back through the Respondent's uniform attendant upon separation. The Respondent's own pleading is that it provided her with meals and free accommodation https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 8

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at the resort. Housing, or an allowance in lieu, is one of the statutory incidents of employment under section 31 of the Employment Act. Businesses do not ordinarily house and feed their independent suppliers. 44. Fifth, the uniform handover form. The Respondent's own document, the "Uniform Handover Form" of 18th February 2025, is headed with the Respondent's name and describes the Claimant under the eld "EMPLOYEE NAME", assigning her to the "Spa" department. The form oers three reasons for the handover of a uniform: "O days/leave", "Resignation" and "Termination". Each of those is a concept native to employment. The Respondent's witness admitted, under cross-examination, that the form described the Claimant as an employee. The Respondent cannot, at one and the same time, rely on the form as proof that the Claimant resigned and disown the description of her as an employee that the same form carries. 45. Sixth, the Respondent's case on the separation is itself an employer's case. It pleads that the Claimant "resigned" and that it made eorts, through its manager, to get her to come back. Resignation is an act by which an employee brings a contract of employment to an end; it is not the manner in which an independent contractor ordinarily ends a commercial engagement. And an enterprise does not ordinarily chase a departed supplier to return. The Respondent's own narrative thus betrays the true character of the relationship. 46. Seventh, the Claimant bore no nancial risk. She made no investment, hired no assistants, could not substitute another therapist in her place, and had no opportunity to prot from sound management of any business of her own. The only variable in her earnings was the volume of guests the Respondent's resort attracted, which was entirely within the Respondent's control. 47. Against all this, the Respondent's evidence was thin. Its witness asserted that the Claimant was engaged "since 2021", a statement that is irreconcilable with the Respondent's own pleadings and submissions, which accept that she was engaged on or about 18th June 2019, and with the Claimant's records showing her work from June 2019. He asserted that the Claimant was paid at 30% for "less than 6 months", when the Claimant's records show payment at 30% from June 2019 to the eve of the reduction, and the Respondent's own schedule records 30% as late as September 2021. These inconsistencies do little for the reliability of the Respondent's account. Beyond the assertion of a label, the Respondent placed no evidence before the Court of any feature that is characteristic of an independent contractor. The absence of Statutory Deductions and of Leave 48. The Respondent relied on the Claimant's concession, under cross-examination, that no statutory deductions were made from her pay, and on the fact that she was not granted annual leave or other statutory benets. In the circumstances of this matter, this factor cannot drive the conclusion that she was an independent contractor. 49. First, statutory deductions such as income tax under the PAYE system, social security contributions and health insurance contributions are obligations that the law imposes on the employer. The employer decides whether to make them. An employer that, in breach of the law, fails to deduct and remit them cannot turn around and rely on its own default as evidence that the worker was not its employee. The same holds true for annual leave and the other minimum terms. If the failure to accord an employee statutory benets were proof that the worker was not an employee, the most delinquent employers would be the best insulated from liability. The law does not countenance such a result. 50. Second, and in any event, no single factor may be considered in isolation. The absence of deductions must be weighed together with all the other features of the relationship I have set out above: the https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 9

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Respondent's tools and equipment, which were protected by the service charge; its premises, clients, prices and billing; its control of her pay and duties; her uniform, meals and accommodation; its own description of her as an employee; its assertion that she "resigned"; and its eorts to have her return. Weighed in that balance, the absence of statutory deductions is a feature of the Respondent's noncompliance, not of the Claimant's independence. 51. The Respondent also submitted that, having worked for several years under a commission arrangement without protest, the Claimant could not retrospectively claim to be an employee. With respect, this conates two dierent things. A worker's status is determined by the law, applied to the facts of the relationship. It is not a term that a worker waives by not protesting it. Continued work under a commission formula is entirely consistent with, and indeed characteristic of, employment on commission. Conclusion on the First Issue 52. Having critically weighed all the material placed before me, I am satised that the Respondent has failed to discharge the burden of proving its assertion that the Claimant was an independent consultant. The Claimant's evidence that she was an employee was not displaced. I nd and hold that the Claimant was an employee of the Respondent, engaged under an oral contract of service from 18th June 2019, and that her wages were computed at 30% of the value of the treatments she performed, together with 2% of that value as service charge, payable monthly. (ii) Whether the Claimant's Employment was Terminated, and if so, whether the Termination was Fair 53. Section 47(5) of the Employment Act provides that, for any complaint of unfair termination of employment or wrongful dismissal, the burden of proving that an unfair termination of employment or wrongful dismissal has occurred rests on the employee, while the burden of justifying the grounds for the termination rests on the employer. Where the employer asserts that the employee was not terminated but resigned, the employer bears the burden, under section 109 of the Evidence Act, of proving that fact. 54. The Claimant's account is that after she persisted in demanding the restoration of her pay and the reimbursement of the withheld sums, the Respondent terminated her employment verbally in midFebruary 2025. The Respondent's account is that she left of her own accord, as shown by the uniform handover form, and never returned despite being contacted by its manager, Edward. 55. Resignation is a unilateral act by which an employee, of his or her own free will, brings the contract of employment to an end. Because it deprives the employee of the protection of the law against unfair termination, the Court will not readily infer it. The intention to resign must be clear and unequivocal. Section 35(1) of the Act contemplates that a contract terminable by notice is terminated by notice in writing. Here, there is no letter of resignation, no written notice, and no evidence of any conversation in which the Claimant expressed an intention to leave. 56. The Respondent's documentary evidence of resignation is the uniform handover form. That document is a pre-printed template whose purpose is to acknowledge the return of uniforms and their condition. It was received by a person named "Lucy" and signed by the uniform attendant. The Claimant signed it as conrming that the listed items had been returned. There is a tick against the word "RESIGNATION", but no evidence as to who placed it there. Neither the uniform attendant nor any ocer who dealt with the Claimant at separation was called to testify. A tick on a uniform handover form, whose authorship is unexplained, cannot be elevated into a clear and unequivocal https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 10

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act of resignation. Tellingly, the Respondent's list of documents describes the same document as a "resignation form", which it is not. 57. Nor does the WhatsApp message from Edward assist the Respondent. The Respondent's list of documents describes it as a message dated 18th January 2025. The screenshot shows otherwise. The message was sent on 1st July 2025, some four and a half months after the separation, and after the Claimant's advocates had issued their demand letter of 20th June 2025, which was emailed to the Respondent on 23rd June 2025. It reads: "I tried to call you for a follow-up on our discussion. Let me know your resolution." It says nothing about any return to work. In context, it is a follow-up on the Claimant's demand, not an invitation to resume employment. Edward himself was not called to testify about any eorts to have the Claimant return. I draw the inference that his evidence would not have supported the Respondent's case. 58. Similarly, the payment voucher of 18th February 2025 for Kshs. 67,800 as "Massage commission" is described in the Respondent's list of documents as a receipt of nal payment "indicating that no dues are owed" to the Claimant. The voucher contains no such statement. It is not a discharge, and it does not show that the Claimant accepted it in full settlement of her claims. 59. The surrounding circumstances make the Respondent's account improbable. The Claimant had worked for the Respondent for close to six years. The Respondent's Director had just, on 21st December 2024, told her she was "number 1". She had been pursuing her withheld pay persistently, as her messages of 20th March 2024, 5th August 2024 and 7th January 2025 show. It is unlikely that an employee in that position would simply walk away from her job and, with it, the leverage she needed to recover the sums she was chasing. It is far more probable, and I so nd, that the relationship was brought to an end by the Respondent, verbally, when the Claimant would not stop asking for what she considered her due. The Claimant has discharged her burden under section 47(5) of proving that a termination occurred. 60. That being so, the burden shifted to the Respondent to justify it. The fairness of a termination is tested on two limbs: substantive fairness, which concerns whether there was a valid and fair reason for the termination; and procedural fairness, which concerns whether the employer followed a fair procedure before terminating. 61. On substantive fairness, section 43(1) of the Act requires the employer, in any claim arising out of the termination of a contract, to prove the reason or reasons for the termination, failing which the termination is deemed unfair within the meaning of section 45. Section 45(2) provides that a termination is unfair if the employer fails to prove that the reason is valid, that it is a fair reason related to the employee's conduct, capacity or compatibility or based on the operational requirements of the employer, and that the employment was terminated in accordance with fair procedure. The Respondent, having taken the position that it did not terminate the Claimant, did not advance any reason at all. The termination was substantively unfair. 62. On procedural fairness, section 41 of the Act requires the employer, before terminating employment on the grounds of misconduct, poor performance or physical incapacity, to explain to the employee, in a language the employee understands, the reason for which termination is being considered, and to hear and consider any representations the employee, and a fellow employee or union representative of the employee's choice, may make. The Court of Appeal in Pius Machafu Isindu v Lavington Security Guards Limited [2017] KECA 225 [ eKLR ] emphasised that these procedural requirements are mandatory. None was complied with. The Claimant was not issued with a notice to show cause, was not informed of any charge, and was not heard. The termination was procedurally unfair. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 11

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63. I therefore nd and hold that the termination of the Claimant's employment was both substantively and procedurally unfair. (iii) The Reduction of Remuneration and withdrawal of the Service Charge Consultation and Consent are Mandatory 64. It is not disputed that from late 2021 the Respondent paid the Claimant 20%, rather than 30%, of the value of her work, and that it did not pay her any service charge. The Respondent's own comparison schedule conrms payment at 30% as late as September 2021, and at 20% from October 2021 onwards. 65. The rate of an employee's wages and the method of calculating them are fundamental terms of the contract of service. They are among the particulars that must be set out under section 10(3) of the Employment Act. Section 10(5) provides that where any matter stipulated in section 10(1) changes, the employer shall, in consultation with the employee, revise the contract to reect the change and notify the employee of the change in writing. Section 13 requires the employer to give the employee a written statement of particulars of any change within one month of the change. Further, section 17(1) obliges the employer to pay the entire amount of the wages earned by or payable to an employee in respect of work done, and section 19 strictly limits the deductions an employer may make from wages. Article 41(2)(a) of the Constitution guarantees every worker the right to fair remuneration. 66. These provisions are couched in mandatory terms. The employer is not at liberty to vary the wage term of a contract of service unilaterally. A variation of a fundamental term, and more so one that reduces an employee's pay, requires, at the very least, genuine consultation with the employee and, for it to bind the employee, the employee's consent. A unilateral reduction of wages is not a variation of the contract at all. It is a breach of it, and the employee remains entitled to recover the dierence between what was contractually due and what was paid. See also Rigby v Ferodo Ltd [1988] ICR 29. 67. The Respondent bore the burden, both under section 10(7) of the Act and under section 109 of the Evidence Act, of proving that the reduction was agreed. It did not discharge it. It pleaded that the adjustment was "communicated to all service providers". No memo, circular, notice, minutes of any meeting, or written statement under section 13 was produced to show when, how or by whom the change was communicated. In any event, a communication is not a consultation, and a consultation is not a consent. To announce a decision already made is not to consult about it. There is no evidence of the Claimant's consent. Her evidence that she sought an explanation and was told that the reduction was a temporary measure due to the pandemic, with the withheld sums to be reimbursed when business picked up, was not controverted by any witness with personal knowledge. 68. The Respondent's other justications do not assist it. That its business was aected by the COVID-19 pandemic may explain why it wished to reduce its wage bill, but economic hardship does not confer on an employer a unilateral right to rewrite its employees' contracts. The law provides lawful avenues for an employer facing a genuine downturn, all of which require consultation. That the 20% rate was above an alleged industry rate of 16% is beside the point; the question is not whether the reduced rate was generous by the standards of other hotels, but whether the Respondent could lawfully impose it on this employee. And the plea that commission rates "varied from time to time" is unsupported by any evidence of any variation other than the one in issue. 69. I nd that the reduction of the Claimant's wages from 30% to 20% and the withdrawal of the service charge were eected unilaterally, without consultation with the Claimant and without her consent, contrary to sections 10(5), 13 and 17 of the Employment Act and Article 41 of the Constitution. They were unlawful. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 12

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Acquiescence, Estoppel and Waiver 70. The Respondent's principal answer is that, by continuing to work and to accept pay at 20% for about four years, the Claimant acquiesced in the reduction and cannot now be heard to complain about it. The argument invokes the equitable doctrine of acquiescence, and the related concepts of estoppel and waiver. It deserves careful consideration. 71. Acquiescence, in its proper sense, arises where a person, with knowledge of his rights and of an infringement of them, stands by and, by words or conduct, leads the other party to believe that he assents to the infringement, so that the other party acts on that belief to its detriment. In that situation, equity will not permit the rst party afterwards to assert his rights, because it would be unconscionable to do so. In Fisher v Brooker [2009] UKHL 41, the House of Lords stressed that acquiescence and laches are equitable doctrines that bar a claim only where the claimant's conduct, coupled with the defendant's detrimental reliance, makes it unconscionable for the right to be asserted. 72. Waiver, for its part, is the intentional relinquishment of a known right. It must be clear and unequivocal, and it must be made with full knowledge of the right being given up. Mere silence or inaction will not ordinarily amount to waiver, unless the circumstances impose a duty to speak and the silence induces the other party to act to its detriment. 73. In the employment context, these doctrines must be applied with great caution. Where an employer unilaterally reduces an employee's pay with immediate eect, the employee's continuation in the job is not, without more, proof of acceptance. An employee's livelihood depends on the job. The choice presented to such an employee is often no real choice at all: to continue working under protest, or to resign and lose his or her only source of income. Given the inherent inequality of bargaining power between employer and employee, the Court will not readily infer from an employee's continued attendance at work that he or she has surrendered a right to wages already earned. 74. Applying these principles, the Respondent's plea of acquiescence fails, for several reasons. 75. First, the Claimant did not stand by in silence. Her uncontroverted evidence is that she sought an audience with the Respondent immediately to ask why her pay had been reduced. The record then shows her repeatedly pressing the Respondent's Director in writing to approve her commissions, and ultimately instructing advocates to demand the withheld sums. That is the conduct of an employee who protests, not of one who assents. 76. Second, the Claimant explained, and I accept, why she continued to work at the reduced rate. She was told that the reduction was a temporary measure occasioned by the pandemic and that the withheld sums would be reimbursed once business picked up. She therefore waited through the pandemic in the expectation of being paid. An employee who continues to work in reliance on the employer's own promise of reimbursement cannot be said to have acquiesced in the permanent loss of the withheld wages. If anyone is estopped by the representations made, it is the Respondent, which induced the Claimant to keep working on the strength of that assurance. The Respondent cannot be heard to say that the Claimant's patience, induced by its own promise, amounted to a surrender of her rights. 77. The Respondent did not act under any mistaken belief as to its rights, nor did it act to its detriment on the faith of anything the Claimant said or did. On the contrary, the Respondent had the benet of the Claimant's full labour while paying her two-thirds of her wages. There is nothing unconscionable in the Claimant now claiming what she earned. The only unconscionable outcome would be to allow the Respondent to retain the fruits of its own breach. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 13

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78. Fourth, there is no evidence of an intentional, clear and unequivocal relinquishment by the Claimant of her right to her full wages. Acceptance of part payment of wages under protest is not a waiver of the balance. 79. Fifth, the Respondent's reliance on the rule that, in some cases, continued work without objection may evidence acceptance of new terms does not avail it on the facts. That inference is available only where the employee's conduct is consistent with acceptance and inconsistent with continued reliance on the original terms. Here, the Claimant's conduct was consistent only with continued reliance on the original terms. 80. I therefore decline the Respondent's invitation to hold that, by continuing to earn the reduced remuneration, the Claimant acquiesced in the reduction or waived her right to pursue the withheld sums. She is entitled to the remuneration withheld for the entire period of the reduction. The Service Charge 81. The Respondent's position on the service charge was that it was a xed percentage added to clients' bills to cater for its operational costs and as security against damage to equipment, that it was not automatically meant for the Claimant, and that whether to share any of it with its employees was within its sole discretion. No evidence was placed before the Court of any policy, circular, practice or document establishing that the distribution of service charge was discretionary, or on what criteria such discretion was exercised. The assertion remained just that: an assertion. 82. On the other hand, the Claimant pleaded and testied that her agreed remuneration included 2% of her jobs as service charge, which was paid monthly until November 2021. Her work record for November 2021 (CK.2) carries a distinct service charge column in which 2% of each treatment is computed against the chit number. The Respondent's own pleading admits that service charge was, as a matter of practice, shared with its employees. Being the employer that kept no written contract, and being the custodian of the employment and payment records under section 74 of the Act, the burden of disproving the Claimant's alleged term as to her remuneration lay squarely on the Respondent under section 10(7). It did not produce its records to show that the Claimant was never paid any service charge, nor any evidence that the service charge was not part of the agreed remuneration. I nd that the 2% service charge was part of the Claimant's agreed remuneration and was payable to her as of right, not at the discretion of the Respondent. Its withdrawal was unlawful for the reasons already given. Limitation 83. Although the Respondent did not raise it, the Court must satisfy itself that the claim for arrears is not time-barred, as limitation goes to jurisdiction. Section 90 of the Employment Act provides that no civil action or proceedings based on or arising out of the Act or a contract of service shall lie unless commenced within three years next after the act, neglect or default complained of or, in the case of a continuing injury or damage, within twelve months next after the cessation thereof. The underpayment of the Claimant's wages was a continuing injury that recurred every month from late 2021 and ceased only when her employment ended in February 2025. This suit was led in August 2025, well within twelve months of the cessation. The claim is not time-barred. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 14

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(iv) Reliefs Declaration 84. Having found that the Claimant was an employee of the Respondent and that her employment was unfairly terminated, she is entitled to a declaration to that eect. Notice pay 85. The Claimant was paid monthly. Under section 35(1)(c) of the Act, her contract was terminable by twenty-eight days' notice in writing, and under section 36 either party could terminate it by paying the other the wages that would have been earned during the notice period. The Respondent gave no notice. The Claimant is entitled to one month's wages in lieu of notice. She pleaded this at Kshs. 83,850, being 30% of her last month's production of Kshs. 279,500. The gure is borne out by her work record for February 2025 and is within the Respondent's own recorded gure for that month. Parties are bound by their pleadings, and I award Kshs. 83,850.00 as pleaded. The withheld 10% and the 2% Service Charge 86. The Claimant is entitled to the dierence between what was due to her under the contract, namely 30% of the value of her work plus 2% service charge, and what she was actually paid, namely 20%. The shortfall is therefore 10% of the value of her work, plus the 2% service charge, for the period of the reduction. 87. In computing the sums due, caution must be exercised to ensure that a proper computation is done, and that the Claimant is not doubly rewarded in the process. Having carefully examined the Claimant's computations, I am not satised that her gures are, in every respect, correct. Several diculties arise: 88. (a) For some months, the Claimant computed the 10% on the gross value of her work, while for others she rst deducted a sum equivalent to the service charge and computed the 10% on the balance. The method is inconsistent. (b) Her computation for November 2021 includes a "1-15th nov manual copy" gure of Kshs. 260,500 for the rst half of the month, whereas her pleaded claim runs from 16th November 2021. To include the rst fteen days of November would be to award her for a period she has not pleaded. (c) Her annual totals do not in every instance reconcile with the monthly gures she attributed to herself in the Respondent's comparison schedule. (d) The Respondent's records and the Claimant's records of the value of her work dier in most months, sometimes in her favour and sometimes in the Respondent's. To guard against over-compensation, and to conne the award strictly within the pleadings and the evidence, I adopt the following approach. The monthly value of the Claimant's work is taken from the Respondent's own comparison schedule, which sets out, side by side, the Respondent's gures and the Claimant's gures for each month. For each month, I adopt the lower of the two gures. In this way, the Claimant is awarded nothing for any month beyond what she herself asserts she earned, and the Respondent is charged with nothing beyond what its own records admit. For November 2021, I adopt the Claimant's own gure for the period from 16th November 2021 as shown in CK.2, namely Kshs. 175,000 (Kshs. 435,500 less Kshs. 260,500). Where the Claimant's gure for a month is nil or https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 15

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blank, as in March 2022 and August 2023, no award is made for that month. The 10% and the 2% are applied to the same gross gure, without any prior deduction. 89. The computation is set out in the schedule annexed to this judgment. The aggregate value of the Claimant's work for the period from 16th November 2021 to 15th February 2025, so determined, is Kshs. 14,125,065.88. The withheld 10% thereof is Kshs. 1,412,506.59, and the 2% service charge thereof is Kshs. 282,501.32. Both gures are within the sums pleaded, of Kshs. 1,463,254.90 and Kshs. 292,650.98 respectively. I award the Claimant Kshs. 1,412,506.59 as withheld wages and Kshs. 282,501.32 as unpaid service charge. Compensation for Unfair Termination 90. Section 49(1)(c) of the Act empowers the Court, where a termination is found to be unfair, to award compensation of up to twelve months' gross wages. The award is discretionary and must be exercised judiciously, having regard to the factors set out in section 49(4). These include the circumstances in which the termination took place and the extent to which the employee caused or contributed to it, the length of service, the employee's reasonable expectation as to the length of her service, the opportunities available to her for securing comparable employment, and her right to press claims for unpaid wages. 91. I have considered that the Claimant served the Respondent for about ve years and eight months; that she was, on the Respondent's own Director's account, its best performing therapist; that she did not contribute to the termination in any way; that the termination was abrupt, verbal and without any process; and that it came in the wake of her persistent and lawful pursuit of wages unlawfully withheld from her, which, in my view, aggravates its unfairness. I have also considered that she has been awarded the withheld sums in this judgment. In the circumstances, an award equivalent to four months' gross wages is reasonable. 92. The Claimant's gross monthly wage is computed at 30% of the value of her work for the last month she worked, plus the 2% service charge. As discerned from the documents, and as pleaded by the Claimant, the value of her work for February 2025 was Kshs. 279,500. Her gross monthly wage is therefore Kshs. 83,850 plus Kshs. 5,590, which is Kshs. 89,440. Four months' gross wages amount to Kshs. 357,760.00, which I award. Certicate of Service 93. Under section 51 of the Act, an employer is obliged to issue a certicate of service to an employee upon termination of employment. The Claimant is entitled to one. Interest and Costs 94. The Claimant prayed for interest on the withheld wages and service charge from the date each payment fell due. Those sums were earned in instalments over more than three years and have been kept from her throughout. Nonetheless, given the need for a reconciliation of the gures, which the Court has undertaken in this judgment, I consider it just that interest on those two heads run from the date of ling suit. Interest on the other monetary awards shall run from the date of judgment. 95. Costs follow the event. The Claimant has substantially succeeded, and she shall have the costs of the suit. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 16

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H. Disposition 96. In the upshot, judgment is entered for the Claimant against the Respondent in the following terms: (a) A declaration be and is hereby issued that the Claimant was an employee of the Respondent from 18th June 2019 until February 2025, and that the termination of her employment by the Respondent was substantively and procedurally unfair; (b) The Respondent shall pay the Claimant the following sums: Withheld wages (10%), 16th November 2021 to 15th February 2025 Kshs. 1,412,506.59 Unpaid service charge (2%), 16th November 2021 to 15th February 2025 Kshs. 282,501.32 One month's wages in lieu of notice Kshs. 83,850.00 Compensation for unfair termination, four months' gross wages Kshs. 357,760.00 Total Kshs. 2,136,617.91 (c) The sums in (b) shall be subject to statutory deductions, if any, applicable in law; (d) Interest at court rates shall accrue on the withheld wages and service charge from the date of ling suit, and on the rest of the sums awarded from the date of this judgment, until payment in full; (e) The Respondent shall issue the Claimant with a certicate of service in terms of section 51 of the Employment Act within thirty (30) days of this judgment; and (f) The Respondent shall bear the costs of the suit. It is so ordered. DATED, SIGNED AND DELIVERED THIS 25TH DAY OF SEPTEMBER 2026. OCHARO KEBIRA JUDGE Schedule: Computation Of Withheld Wages And Service Charge https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 17

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Figures in Kenya Shillings. Monthly values from the Respondent's comparison schedule; the lower of the two gures is adopted for each month. November 2021 is from the Claimant's exhibit CK.2 (16th to 28th November 2021). https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 18

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Month Respondent's gure Claimant's gure Figure adopted Shortfall at 12% 16–28 Nov 2021 n/a 175,000.00 175,000.00 21,000.00 Dec 2021 581,380.00 589,500.00 581,380.00 69,765.60 Jan 2022 606,390.00 577,500.00 577,500.00 69,300.00 Feb 2022 439,110.00 430,500.00 430,500.00 51,660.00 Mar 2022 64,260.00 0.00 0.00 0.00 Apr 2022 372,790.00 364,500.00 364,500.00 43,740.00 May 2022 268,260.00 262,000.00 262,000.00 31,440.00 Jun 2022 317,220.00 317,500.00 317,220.00 38,066.40 Jul 2022 471,120.00 460,500.00 460,500.00 55,260.00 Aug 2022 483,480.00 474,000.00 474,000.00 56,880.00 Sep 2022 199,410.00 164,500.00 164,500.00 19,740.00 Oct 2022 451,356.00 427,600.00 427,600.00 51,312.00 Nov 2022 470,730.00 460,070.00 460,070.00 55,208.40 Dec 2022 635,460.00 619,950.00 619,950.00 74,394.00 Jan 2023 568,120.00 547,500.00 547,500.00 65,700.00 Feb 2023 176,000.00 172,000.00 172,000.00 20,640.00 Mar 2023 337,000.00 33,800.00 33,800.00 4,056.00 Apr 2023 388,500.00 383,080.00 383,080.00 45,969.60 May 2023 315,000.00 315,000.00 315,000.00 37,800.00 Jun 2023 396,300.00 396,000.00 396,000.00 47,520.00 Jul 2023 572,000.00 291,000.00 291,000.00 34,920.00 Aug 2023 474,000.00 0.00 0.00 0.00 Sep 2023 78,500.00 78,500.00 78,500.00 9,420.00 https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 19

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Oct 2023 359,500.00 359,500.00 359,500.00 43,140.00 Nov 2023 220,000.00 220,000.00 220,000.00 26,400.00 Dec 2023 414,000.00 395,000.00 395,000.00 47,400.00 Jan 2024 256,500.00 187,000.00 187,000.00 22,440.00 Feb 2024 729,446.00 737,895.00 729,446.00 87,533.52 Mar 2024 425,098.00 433,720.00 425,098.00 51,011.76 Apr 2024 219,603.00 199,055.00 199,055.00 23,886.60 May 2024 227,706.00 227,705.88 227,705.88 27,324.71 Jun 2024 260,211.00 275,165.00 260,211.00 31,225.32 Jul 2024 404,043.00 382,850.00 382,850.00 45,942.00 Aug 2024 620,178.00 611,800.00 611,800.00 73,416.00 Sep 2024 313,600.00 313,600.00 313,600.00 37,632.00 Oct 2024 479,500.00 461,300.00 461,300.00 55,356.00 Nov 2024 366,100.00 333,900.00 333,900.00 40,068.00 Dec 2024 571,900.00 571,900.00 571,900.00 68,628.00 Jan 2025 664,200.00 635,600.00 635,600.00 76,272.00 Feb 2025 339,000.00 279,500.00 279,500.00 33,540.00 Total 14,125,065.88 1,695,007.91 Withheld wages at 10% of 14,125,065.88 = Kshs. 1,412,506.59 Service charge at 2% of 14,125,065.88 = Kshs. 282,501.32 https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2588/eng@2026-09-25 20

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