Gilbert Sule Otieno v Seventh Day Adventist Church (East Africa) Ltd (sued on behalf of S.D.A. Church, Kiamunyi East) [2014] KEELRC 39 (KLR)
The bottom line
#A Kenyan court ruled a church construction dispute was commercial, not employment, and transferred it out of the Industrial Court.
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 Court has jurisdiction over the dispute, i.e. whether the contract was a contract of service or a contract for services/works
- 2.Whether the dispute should be referred to arbitration under paragraph 9 of the contract
Key legal issues
#Whether the contract was one of service or for services
It was a contract for services/works; the Claimant was an independent contractor
The contract's obligations lacked the essentials of employment such as wage/salary, hours of work, leave, housing, pensions and protection against dismissal. The Claimant dictated how work was done, employed his own labour, and was guided by architects' and engineer's specifications. The label 'employer' and 'foreman' in the contract was not determinative of the true relationship.
Whether the Industrial Court has jurisdiction over the dispute
No; the dispute is commercial in nature arising from breach of a contract for works and belongs to the High Court or Magistrate's Court
While the Industrial Court draws jurisdiction from several statutes beyond the Employment Act, none of them confers jurisdiction over commercial disputes arising from contracts for services or works. The relationship fell outside the scope of the Employment Act, 2007, so the forum should be the civil courts.
Whether the dispute should be referred to arbitration under paragraph 9 of the contract
Not determined; left to the appropriate forum
Having concluded that the Court lacks jurisdiction, the Court found it unnecessary to address the arbitration question, observing that the parties may raise it before the forum seized of the dispute.
Legal principles established
#- The Industrial Court's jurisdiction is not confined to contracts of service under the Employment Act; it also flows from other written laws, but does not extend to commercial disputes arising from contracts for services or works
- The legal character of a relationship must be determined from its substance, not the labels used in the contract
- Where a court lacks jurisdiction, the appropriate course may be transfer to a competent forum rather than striking out
Court orders
#- 1.The Cause is transferred to the Chief Magistrate's Court in Nakuru for adjudication
- 2.No order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Industrial Court Act, Labour Relations Act, Labour Institutions Act and Employment Act, 2007 (jurisdiction of the Industrial Court)
Relief refused
#Claimant's claim of Kshs 4,725,000/- and compensation under section 49(1)(c) of the Employment Act to be heard and determined by the Industrial Court
The dispute arises from a contract for services/works, outside the Court's jurisdiction; the dispute belongs to the High Court or Magistrate's Court
Costs
There will be no order as to costs.
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 contract was not one of service but a contract for services or a contract for works.
to establish the legal character of the relationship and to determine the true and correct relationship between the parties, the Court must go beyond the use of the words employer and foreman
rather than decline jurisdiction and strike out the Cause, I order that it be transferred to the Chief Magistrate’s Court in Nakuru for adjudication.
There will be no order as to costs.
Issues in the judgment
#Case/cause number is not stated anywhere in the judgment, only the commencement date of 29 September 2014
Cassidy v Min. of Health and Ready Mixed Concrete were cited within the quoted passage from Bwire v Krystalline Salt; their treatment as cited by the court is inferred from that embedded citation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gilbert Sule Otieno v Seventh Day Adventist Church (East Africa) Ltd (sued on behalf of S.D.A. Church, Kiamunyi East) [2014] KEELRC 39 (KLR)", Case Analysis (2014). Not stated in judgment (Cause commenced 29 September 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/39/eng@2014-12-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.