Vitalis Oliewo K’omudho v AAR Health Services Ltd [2016] KEELRC 526 (KLR)
The bottom line
#Kenya's Employment Court ruled a commission-earning consultant was never an employee, so it had no power to hear his dismissal claim.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was an employee or an independent consultant/agent
The Claimant was a consultant, not an employee; the written agreement defined him as an agent on 1.35% override commission, he was subject to withholding tax rather than statutory deductions, and received no leave or benefits
Applying section 2 of the Employment Act and the authorities, the court examined the intentions of the parties and the true tenets of the relationship: control, salary, benefits, ability to hire staff and the contract document. The written Business Development Consultant Agreement defined the claimant as an agent; he earned commission rather than salary, paid withholding tax only, had no leave or medical benefits, and termination was by mutual agreement or 30 days' notice. These characteristics are those of an independent consultant.
Whether the resignation amounted to constructive dismissal
No constructive dismissal; the resignation was voluntary and consistent with the contract's exit provisions, and in any event the doctrine applies only to employees
The claimant tendered his resignation on 10 May 2012, three days after being confronted with allegations, citing his intention to vie for a political seat in Muhoroni - a fact confirmed by his sharing of campaign materials with the audit team. The court found he had ample time to consider his circumstances and that his resignation invoked the contract's termination provisions. Since no employment relationship existed, the doctrine of constructive dismissal could not apply to him.
Whether the Court has jurisdiction over the claim
The Court lacks jurisdiction because there is no employment relationship; the dispute is between a company and its consultant
Jurisdiction of the Employment and Labour Relations Court is tied to the existence of an employment relationship. Having found the claimant to be a consultant under an agency agreement rather than an employee within the meaning of section 2 of the Employment Act, the court held the suit could not be sustained before it, and the claim was dismissed.
Legal principles established
#- The Court must look beyond the labels the parties attach to their relationship to determine whether an employment relationship exists, examining the true tenets of the relationship including control, salary, benefits and the contract document
- Where a claimant is a consultant and not an employee, the ELRC lacks jurisdiction to sustain the suit
Court orders
#- 1.The claim is dismissed
- 2.Each party shall bear their own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction premised on existence of an employment relationship under the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Vitalis Oliewo K’omudho v AAR Health Services Ltd [2016] KEELRC 526 (KLR)", Case Analysis (2016). Cause No. 2499 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/526/eng@2016-06-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.