Okaka v Tulsi Construction Ltd

4. He states that the Respondent intentionally frustrated all his eorts to complete the designated work as dened under the Consultancy Agreement. 5. He further states that he undertook his duties and responsibilities with unrivalled passion, earnest zeal and dedication, all of which were acknowledged by the Respondent. 6. The Claimant avers that the Respondent's conduct amounts to an unprocedural and unlawful termination of the Consultancy Agreement, without warning or due process. 7. It is his contention that the Respondent failed to comply with the dictates of the Employment Act, 2007, in that it did not give him notice, did not follow the required procedure and did not pay him the terminal dues owed to him. 8. He asserts that although he served the Respondent with loyalty and diligence, the Respondent did not appreciate his services and instead terminated them, and he therefore considers the termination unprocedural and unfair. 9. He states that the Respondent continues to refuse to pay him his salary and dues, which he particularised as follows: Certicate of service; Unremitted withholding tax payment certicates; Salary for 11 months (May 2018 to March 2019) - Kshs. 1,980,000; Salary in lieu of notice - Kshs. 180,000; Service pay for 1 year (180,000/30 × 15 × 1) - Kshs. 90,000; Annual leave - Kshs. 180,000; Compensation for wrongful dismissal (180,000 × 12) -Kshs. 2,160,000; House allowance (180,000/3 × 12)- Kshs. 720,000; All of which come to a total of Kshs. 5,310,000. 10. The Claimant avers that demand was made and notice of intention to sue given, but the Respondent persists in its refusal to make good the situation. Respondent’s Case 11. The Respondent opposed the claim through a Memorandum of Response dated 23rd July 2019, in which it denied the claim in its entirety. 12. It is the Respondent's case that sometime in January 2018, it entered into a consultancy agreement with the Claimant, under which the Claimant was to oer general project management consultancy services for construction works the Respondent was undertaking at Laikipia University, at a monthly rate of Kshs. 180,000. 13. The Respondent avers that under the contract the Claimant was an independent consultant and not an employee. 14. The Respondent denies that it unlawfully terminated the Claimant's employment or refused to pay him his consultancy fee. 15. It avers that the Claimant failed to provide details of his work for the months of May and June, and that it was further discovered that he had not been attending site meetings or supervising and managing the project as required. 16. The Respondent states that the Claimant, through wilful neglect, failed to render his services towards the project despite the Respondent providing him with all the necessary information and opportunities to do so. It contends that, if anything, it was the Claimant who frustrated the project through his neglect and lack of diligence. 17. The Respondent contends that since the claim did not arise out of an employer-employee relationship, it is not a labour matter. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 2

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18. It is the Respondent’s case that the claim lacks merit, is ill-conceived and incompetent, and prays that it be dismissed with costs. Evidence in Court 19. CW1, Amos Okaka (the Claimant), testied that he is a surveyor and that the Respondent was his employer. He adopted his witness statement as his evidence in chief; and produced the documents led with the statement of claim, which were admitted as a bundle without objection from Mr. Ochieng for the Respondent. 20. CW1 testied that there was no timeline to his engagement and that it was an open agreement. He was contracted because of his experience, that he was given instructions, and that he supervised the project. 21. It is CW1's testimony that he gave monthly reports and that the Respondent provided the equipment. He denied that he did not perform, and testied that he attended meetings with the directors and other experts and raised concerns. 22. He testied that the Respondent initially met his expenses, but once his invoices were paid he began claiming his expenses separately. 23. CW1 testied that he was working far away from home. 24. It is his testimony that he followed up on payment from July 2018 and that the Respondent acknowledged by email that it owed him. 25. On cross-examination by Mr. Ochieng, CW1 testied that he was employed by the Respondent under a contract dated 4th January 2018 and signed on 17th January 2018, titled "Contract for Project Management Services". 26. It is CW1's testimony that it was an employment contract and not a consultancy agreement. He conceded that the rst paragraph of the contract refers to a consultancy agreement and that paragraph 3.5 of his statement of claim pleads unlawful termination of a consultancy agreement. He testied that he is not described as a consultant in the agreement. 27. CW1 testied that he performed his duties from the Respondent's oces, the site, and his residence, and conceded that the contract does not indicate his station of work. 28. It is his testimony that he issued invoices, and he maintained that an employee can issue invoices to an employer. He conceded that he has no copies of the invoices in court, but testied that the invoices were not the basis of payment because there was a contract, and that the Respondent acknowledged owing him money. 29. He referred to his letter dated 10/7/2018 and testied that there was a claim that he was not supervising the project. He conceded that the letter refers to consultancy and advisory services. 30. CW1 testied that he reported to Mr. Suresh, the Respondent's Managing Director, and that he was not given a working policy. 31. It is his testimony that his engagement was terminated, though he conceded that he has not stated the date of termination in the statement of claim. 32. He testied that the Respondent failed to pay him for two consecutive months and that he did not engage with the Respondent beyond August 2018. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 3

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33. CW1 testied that he was claiming payment for those two months and that he could not continue oering his services because of frustration. 34. It is his testimony that he could not cover his own expenses and that the Respondent was supposed to facilitate him. 35. On re-examination by Mr. Nyaga, CW1 testied that he raised invoices and that Suresh, on behalf of the Respondent, conrmed them. He referred to an email dated 10th July 2018 from Suresh and testied that it shows the Respondent had initiated his termination. 36. It is CW1's testimony that the Respondent indicated in that email that it was ready and willing to pay for his services as an employee of the company. 37. RW1, Suresh Patel, testied that he is a director of the Respondent and is in court because of Amos Okaka, who was the Respondent's former consultant. He adopted his witness statement dated 23rd July 2019 as his evidence in chief. 38. On cross-examination by Mr. Nyaga, RW1 testied that he knows Amos Okaka. It is his testimony that the Claimant was not a project manager and only did a three-month consultancy for a particular project. 39. Referring to the contract at A01 of the Claimant's documents, he testied that paragraph 1(a) provides that the Claimant was to provide project management services as a consultant. He conceded that the agreement does not state its duration, but testied that the project was coming to an end. It is RW1's testimony that it was an open contract. 40. RW1 testied that he communicated with the Claimant by email, referring to his email of Tuesday 10th July 2018. He testied that paragraph 7 of that email states that the Claimant showed the Respondent the services he provided as an employee of the company. 41. It is his testimony that the Claimant was not an employee of the company. The Claimant was not doing the work he was claiming for, that there were no project meetings, and that he never provided the documentation. 42. On re-examination, RW1 testied that the engagement was that of a temporary consultant. 43. It is his testimony that in the Claimant's email of 4th July 2019, the Claimant was asking for his pay for consultancy services, and that the email shows tax was being withheld. 44. Referring to the last paragraph of his email, where he used the words "as an employee of the company", RW1 testied that he was saying the Claimant was not an employee of the company. Claimant’s Submissions 45. The Claimant identied two issues for determination: whether there existed an employer-employee relationship between him and the Respondent, and whether his employment was unfairly terminated by the Respondent. 46. On the rst issue, the Claimant submitted that it is not contested that the Respondent engaged his services through a consultancy contract for the proposed upgrading of Laikipia University facilities, dated 17th January 2018. However, the Respondent further tasked him with project management of the said facilities, therefore, he was an employee within the meaning of Section 2 of the Employment Act, 2007, which denes an employee as "a person employed for wages or a salary and includes an apprentice and indentured learner". https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 4

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47. He submitted that he testied that, in addition to the monthly fee, the Respondent provided him with accommodation and all the equipment and stang he required to perform his duties. 48. The Claimant argued that the Respondent's position, advanced by its Managing Director, Mr. Suresh Patel, that he was not an employee but had been contracted for only three months, is defeated by the Respondent's own correspondence. He relied on the Respondent's email dated 10th July 2018, written in response to his request for fees then pending for two months, in which the Respondent stated that it was "ready and willing to pay your services but we still insist that you show us in detail the services you oered to the company for May and June 2018 as an employee of the company." 49. The Claimant contended that this reference, together with the Respondent's insistence that he present reports and supervise the project and its threat to terminate his services, demonstrates that the Respondent relied on his services to progress its business as it would an employee. 50. In support thereof, he cited Antony Karanja Wainaina v Adrian Company Limited [2019] KEELRC 2089 (KLR), where the Court, relying on an internal email that introduced the claimant as the champion of certain solutions to be involved in all related projects, held that: "The email did not make any reference to the Claimant as a consultant but incorporated him to the company's establishment and especially in all the projects where he was seen as the champion. Consequently, I nd that the claimant has proved on a preponderance of evidence that he was employed by the respondent under a contract of service." 51. The Claimant further relied on Christine Adot Lopeyio v Wyclie Mwathi Pere [2013] KEELRC 244 (KLR), where the Court set out the tests for determining the existence of an employment relationship, and argued that he satised each of them. 52. On the control test, he submitted that the contract dened the terms of engagement, with the Respondent undertaking to "provide access to its information, property and personnel as may reasonably be required in order to permit the consultant to perform the services". 53. On the integration test, he pointed to the email of 10th July 2018, in which the Respondent complained that "you have not been attending any site meeting, have not been supervising the project and carrying out project management as required", and argued that this showed he was subject to the Respondent's rules and expectations rather than his own command. 54. On the economic reality test, he relied on the representation and warranty clause, under which he warranted that he was "under no contractual or other restrictions and obligations which are inconsistent with the execution of this Agreement or which will interfere with the performance of the services". 55. On mutuality of obligation, he submitted that the agreement was to "commence on the 4th January 2018 and shall remain in eect until the completion of the project or earlier termination of this Agreement", at a fee of Kshs. 180,000 net per month, and that he was bound to keep the Respondent's information condential and return it upon termination or expiry of the agreement. 56. To fortify his position, the Claimant relied on Leonard Musitsa Endoli v Odds and Ends Limited [2022] KEELRC 819 (KLR) , where, in the face of a contention that the claimant was an independent contractor, the Court held that: "The assertion that the Respondent was the Claimant's supervisor and was not satised with his workmanship and requested amends represent the Claimant as an employer as opposed to an independent contractor." https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 5

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57. The Claimant submitted that the Respondent tendered no evidence of the independence it alleged he enjoyed. He argued that his emails demonstrated that the Respondent paid him less withholding tax but failed to issue him the receipts for verication and tax relief. In his view, the Respondent's reliance on his request for withholding tax certicates to portray him as an independent contractor exposes it to allegations of illegal deductions, since it never proved that such deductions were remitted. 58. He invoked Sections 107 to 109 of the Evidence Act, which provide that "whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist", that the burden "lies on that person who would fail if no evidence at all were given on either side", and that the burden of proving a particular fact "lies on the person who wishes the court to believe in its existence". He submitted that he discharged his burden of proving that he was an employee, while the Respondent failed to prove that he was an independent contractor. 59. On the second issue, the Claimant submitted that his employment was unfairly terminated because he sought payment of his fees for work done. He argued that in the email of 10th July 2018 the Respondent acknowledged owing him fees while casting doubt on his entitlement, and thereafter remained silent for a further eleven months until he led suit. 60. He submitted that he responded to each of the Respondent's complaints of non-performance by a letter of the same date, produced as AO 2(ii), and that the Respondent neither rebutted nor acted on that response. 61. The Claimant relied on Section 43(1) of the Employment Act, which provides that "in any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45." He argued that the Respondent gave no reasons for terminating his services. 62. He further relied on Section 45(2), under which a termination is unfair where the employer fails to prove that it was based on a valid and fair reason and eected in accordance with fair procedure, and Section 45(4)(b), under which a termination is unfair where "in all the circumstances of the case, the employer did not act in accordance to justice and equity in terminating the employment of the employee." 63. The Claimant submitted that Section 47 of the Act places on the employer the burden of justifying the grounds for dismissal, and that the Respondent failed to prove that his termination was justied by any neglect of duty on his part. He relied on Mutie Irvi Kyongo v Vee Vee Enterprises [2021] eKLR, where the Court held that: "In this case, the Respondent did not tender any evidence to prove that the reason for the termination was valid and the procedure followed were fair. Consequently, I nd that the evidence by the Claimant that the termination was for no valid reason and that no prior notice or hearing was unrebutted and goes to prove that his employment contract was unfairly terminated by the Respondent's Director, Mr. Shah contrary to section 45 of the Act." 64. It is the Claimant’s submission that the Respondent did not discharge its burden under Sections 43, 45 and 47 of the Act, and that it ignored his response to its complaints, contrary to Section 45(3), which he submitted gives an employee the right to complain of unfair termination. 65. He contended that the reasons advanced for his termination are frivolous and untrue, that he performed his duties diligently, and that this remains unopposed. He characterized the termination as silent and constructive, eected prematurely and without proof of any misconduct. Further, the Respondent continues to refuse to pay his outstanding fees despite acknowledging that some payments were not honored. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 6

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Respondent’s Submissions 66. The Respondent submitted on three issues: whether there existed an employer-employee relationship between the Claimant and the Respondent; whether the Claimant’s engagement was unfairly terminated; and whether the Claimant is entitled to the remedies sought, particularly the special damages of Kshs. 5,310,000. 67. On the rst issue, the Respondent submitted that the Claimant has approached the Court in borrowed robes, seeking to recast a commercial bargain into a contract of service when his own pleadings, exhibits and testimony show that he was a consultant. It argued that the documents on record speak of invoices raised and not salaries earned, of fees claimed and not wages paid, and of withholding tax deducted, as is customary for independent engagements, and not PAYE, as would be expected in an employment relationship. 68. It is the Respondent's submission that under the Contract for Project Management Services the parties met as equals in commerce and not as master and servant. It relied on the terms of the contract titled "Tulsi Construction Limited, Contract for Project Management Services". 69. -/.Under clause 1, the Respondent was to provide its personnel as required by the Consultant to perform his services, which in the Respondent's view distinguished the Claimant from its employees. Clause 3(A) provided for consultancy fees and not salary. Clause 3(B) identied the Claimant as a Consultant who would submit monthly invoices detailing the services performed and the amount due. The Claimant also executed the agreement as "The Consultant". 70. The Respondent further argued that the Claimant's own documents disprove his status as an employee. It submitted that in his email dated 4th July 2018 he demanded accrued fees for consultancy services for May and June 2018, together with withholding tax deducted at source. Additionally, in his demand letter dated 10th July 2018, he described his engagement as purely consultancy based and advisory, adding that key decisions on procurement and payment of materials, labour and equipment were the sole responsibility of Tulsi Construction Ltd directors and its top management. 71. It is therefore the Respondent’s submission that he thereby separated himself from its employees and from the management of its aairs. It relied on the Claimant's advocates' demand letter dated 5th February 2019, which stated that the Respondent entered into a Consultancy agreement with our client, and on paragraph 3.5 of the Memorandum of Claim, which pleads the unlawful termination of the consultancy agreement. 72. The Respondent argued that parties are bound by their pleadings and cannot invite the Court to determine a case dierent from that pleaded. It relied on Independent Electoral and Boundaries Commission & another v Stephen Mutinda Mule & 3 others [2014] eKLR, where the Court of Appeal cited with approval Adetoun Oladeji (NIG) Limited v Nigeria Breweries PLC SC 91/2002, in which it was held that: "... it is now a very trite principle of law that parties are bound by their pleadings and that any evidence led by any of the parties which does not support the averments in the pleadings, or put in another way, which is at variance with the averments of the pleadings goes to no issue and must be disregarded." The Court of Appeal further held that parties "are bound by their pleadings which in turn limits the issues upon which a trial court may pronounce." 73. On the oral evidence, the Respondent submitted that the Claimant conceded in cross-examination several matters. He had no xed work station and worked from the site or from home. He raised invoices for payment. His services were on a consultancy basis and he reported to Mr. Suresh. He was never issued with any work policy as an employee. His termination was only implied from non- https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 7

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payment for two months, and he did not work for the Respondent beyond two months from his engagement. 74. The Respondent submitted that its witness testied that the Claimant was engaged for no more than three months and was paid fees upon invoicing, less withholding tax. The witness further testied that the email of 10th July 2018 did not describe the Claimant as an employee, but challenged him to justify the work he had done as an employee, as he had claimed in earlier calls. 75. It was submitted that the Claimant cannot, through the alchemy of litigation turn invoices into pay slips, consultancy fee into wages or independence into subordination. In its view, he is estopped from disowning his own pleadings and his and his advocates' correspondence, and no evidence was led of integration into its workforce, statutory deductions consistent with employment, or mutual obligations beyond those of a consultancy. It added that a consultant earns fees and not salary, is not eligible for company benets such as health cover, and pays withholding tax and not PAYE. 76. The Respondent relied on Charles Mutua Mwanzi v Invesco Assurance Company Limited [2016] eKLR, where the Court distinguished a contract of service, in which the employee is subordinate and receives guidance in his work, from a contract for services, in which the person engaged is independent and free to undertake the task autonomously. It contended that the Claimant's independence is shown by his intimation, at paragraph 4 of his letter of 10th July 2018, that he would not oer his services until his invoices were settled. 77. It further relied on Fredrick Byakika v Mutiso Menezes International Unlimited [2016] eKLR, where the Court held that: "Such denition sets clarity with regard to the payment of salary or wage. Any employee is thus paid a wage or salary. However, even where a salary or wage is paid, where parties have reduced the terms and conditions regulating the relationship into writing, such is to be given importance with reference as such form the basis and intentions of such parties ... I nd the parties agreed on the nature of relationship between them, that of a consultant ... and the contract between the parties recognise the Claimant as a Consultant." 78. It is the Respondent’s submission that the parties freely structured their relationship as a consultancy, and that the Claimant ought not to be permitted to abandon that bargain after the fact and seek refuge in a status he never held. 79. On the second issue, the Respondent submitted that the evidence discloses no termination on its part, as it issued no termination notice and sent no correspondence ending the consultancy. It maintained that its email of 10th July 2018 merely sought particulars of the Claimant's work for May and June and raised legitimate concerns about his non-attendance of site meetings and failure to supervise and manage the project. In its view, this was insistence on performance of the agreed terms and not a repudiation of the contract. It contended that the Claimant's response of the same date is dispositive: rather than furnish the particulars requested, he stated that it is therefore not possible to continue oering my services until the said invoices shall be fully settled. 80. The Respondent argued that the Claimant thereby elected to suspend performance, and that having done so he cannot accuse the Respondent of terminating an engagement he himself brought to a halt. It submitted that the evidence establishes cessation by the Claimant and not termination by the Respondent. 81. The Respondent relied on Douglas Omunyin Otungu v Board of Trustees, Redeemed Christian Church of God [2022] eKLR, where the Court declined a claim framed as constructive dismissal because the claimant failed to prove, on a balance of probabilities, that the respondent's conduct forced https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 8

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the separation. In that case there was no evidence of coercion or intolerable conditions amounting to a repudiatory breach. 82. It is therefore the Respondent’s submission that the claim for salary for eleven months from May 2018 to March 2019 is untenable, since a consultant who stopped oering services in July 2018 cannot claim continuing monthly pay as though the engagement remained active. 83. On the nal issue, the Respondent submitted that the claim for Kshs. 5,310,000, being made up of itemized monetary heads, is in the nature of special damages, which must be specically pleaded and strictly proved, with the burden resting on the Claimant under Sections 107 and 109 of the Evidence Act. Reliance was placed on Vishva Stones Supplies Company Limited v RSR Stone (2006) Limited [2024] KECA 978 (KLR) , where the Court of Appeal restated that " special damages must be not only be pleaded specically but must also be proved strictly for they are not the direct natural or probable consequences of the act complained of and may not be inferred from the act". 84. It submitted that the Court also held that such sums must be supported by documentary or other primary evidence and cannot be awarded on conjecture or broad assertion. 85. The Respondent argued rst that salary, notice pay, service pay, leave, house allowance and compensation are remedies available only within an employment relationship, so that the Claimant's computation rests on an incorrect legal premise. Secondly, it argued that even if the claim were treated as one for professional fees, the Claimant produced no reconciled statement of account showing, month by month, the services rendered, the invoices raised, the non-payment and the net sum outstanding, leaving the claim speculative. Thirdly, it submitted that the pleaded period is contradicted by the Claimant's own email of 10th July 2018 suspending his services. 86. It is the Respondent’s submission that the Claimant has failed to prove an employment relationship, has failed to prove that the Respondent terminated the engagement, and has failed to strictly prove the sum claimed. It prayed that the claim be dismissed in its entirety with costs. 87. I have examined all the evidence and submissions of the parties herein. From the onset, the clamant has pleaded that he was an employee of the respondent having been employed vide a contract of employment dated 17th January 2018. 88. The contract in question states that the claimant entered into a contract for project management services for consultancy services. The claimant was then to provide services in the area of general project management as a consultant. Para (10) of the contract indicated that the company engaged the consultant to provide and perform services of general project management. 89. Throughout the contract, the claimant is referred to as a consultant. The period of the consultancy was from 4/1/2018 and was to remain in eect until the completion of the project or the earlier termination of the agreement. The project was the proposed upgrading of Laikipia University facilities. The claimant has not told court when the project at Laikipia University ended nor exhibited any letter indicating his termination of the contract. 90. From the contract, the claimant was referred to as a consultant and performed consultancy services and was paid a consultancy fee of kshs 180,000/- monthly. He was supposed to submit to the respondent a monthly invoice detailing the services performed during the preceding month and the amount due. The claimant submitted no such invoice even before this court. 91. Given the nature of this engagement and given no proof of any employee- employer relationship between the claimant and the respondent, it is my nding that the claimant was never an employee of https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 9

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the respondent and led this cause before a court lacking jurisdiction to handle the breach of contract if at all. 92. In the circumstances, I will down my tools and proceed to dismiss this cause accordingly with no order to costs. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 5TH DAY OF OCTOBER 2026. HELLEN WASILWA JUDGE Page 11 of 11 https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2758/eng@2026-10-05 10

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