Adrian Company Limited v Karanja (Civil Appeal 190 of 2019) [2025] KECA 497 (KLR)
The bottom line
#Kenya's Court of Appeal ruled a project-based consultant was not an employee, wiping out a Kshs.2.8 million award for unfair termination and benefits.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent was engaged as an employee under a contract of service or as an independent contractor under a contract for service
- 2.On what terms the engagement was
- 3.Depending on the findings, whether the respondent was unlawfully terminated
- 4.Whether the award in the judgment of the trial court was justified
Key legal issues
#Nature of the engagement: contract of service or contract for service
The engagement was a contract for service; the respondent was contracted to deliver four assignments and paid Kshs.200,000/= on the single completed assignment, with no payroll entry, no statutory deductions and no payment of allowances
The court reviewed the respondent's own evidence: he received only one piecemeal payment of Kshs.200,000/= for a completed assignment, was never placed on the payroll, received no statutory deductions, no allowances, and no written contract materialised despite an HR department. The job card was merely facilitative for access and identification. These features aligned with an independent contractor engaged to deliver specific tasks, not an employee under supervision and control.
Consequence of the finding on termination and benefits
Once the engagement was held to be a contract for service, questions of lawful termination under sections 41, 43 and 45 of the Employment Act and payment of salary and benefits did not arise
The trial court's award rested entirely on a finding of employment. The appellate court having overturned that foundation, the statutory protections of the Employment Act (notice, procedure, compensation for unfair termination) had no application to an independent contractor whose engagement simply lapsed when he failed to deliver the remaining assignments.
Standard of interference with first-instance factual findings
The Court reaffirmed that it would not lightly differ with trial court findings but would interfere where findings were unsupported by evidence, based on misapprehension, or where the judge acted on wrong principles
Citing Selle v Associated Motor Boat Co and J.S.M. v E.N.B, the Court framed its appellate duty as reconsideration and re-evaluation of the evidence while giving weight to the trial judge's advantage of seeing and hearing witnesses. On the evidence as set out, the Court concluded the trial judge's finding of employment was untenable.
Legal principles established
#- Piece-work and oral engagements may still fall within the statutory definition of a contract of service under section 2 of the Employment Act
- The indicia of a contract of service are subjection to the command of the master, subjection to the employer's rules and procedures, and being part of the employer's business
- The indicia of an independent contractor include working own hours, running own business, freedom to serve multiple employers, invoicing for services, and registered taxpayer status
- An appellate court will not lightly differ with findings of fact by the trial court but will interfere where findings were not based on the evidence, were based on misapprehension of the evidence, or where the judge acted on wrong principles
Court orders
#- 1.Appeal allowed
- 2.Judgment and decree of the ELRC issued on 15th March 2019 set aside
- 3.In place thereof, judgment dismissing the respondent's claim with costs
- 4.Costs of the appeal to be paid by the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court
- Not stated in judgment
- Jurisdiction invoked
- First appellate jurisdiction under the Employment and Labour Relations Court (designated to hear employment disputes); the Court exercised its role as the first appellate court reconsidering evidence
Relief refused
#Respondent's claim for salary arrears, notice pay, compensation for unfair termination and telephone allowance
The respondent was an independent contractor, not an employee, so the claims for employment benefits did not arise
Costs
Judgment dismissing the respondent's claim with costs; costs of the appeal to be paid by the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The result is that we allow the appeal, and set aside the judgment and decree of the learned Judge issued on March 15, 2019. In its place, there shall be a judgment dismissing the respondent's claim with costs.
The respondent was not engaged in a contract of service. This was a contract for service.
This was not an employer/employee relationship.
Section 2 of the Employment Act allows for oral contracts of service, and also that a contract to carry out specific tasks, otherwise known as piece work, falls within the definition of contract of service.
Issues in the judgment
#The judgment does not state the appeal number, neutral citation, or the ELRC case number of the decision appealed from; coram appears only as a certified copy signature block without formal bench heading
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Adrian Company Limited v Karanja (Civil Appeal 190 of 2019) [2025] KECA 497 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/497/eng@2025-03-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.