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ELRCDismissedNot stated in judgment· [2023] KEELRC 3409 (KLR)

Ogutu v Madison Group (Madison Life Insurance) (Employment and Labour Relations Cause E928 of 2022) [2023] KEELRC 3409 (KLR)

Employment and Labour Relations Court
29 December 2023
OKOcharo Kebira
2,422 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~10 min to read original · ~4 min brief

The bottom line

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The Employment Court ruled a sales trainee on commission was not an employee, so his unfair termination claim failed completely, with costs.

What this practically means

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Executive summary

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The Claimant sued the Respondent claiming a declaration that his termination was unfair, wrongful and illegal, plus compensatory amounts of Kshs. 274,937,000 for allegedly unpaid salary and commissions. He asserted he was employed from June 2022 as a Sales and Marketing Officer on escalating salary-plus-commission terms, and was dismissed on 21st November 2022 by the Thika Branch Manager without reasons or a hearing. He also claimed approximately Kshs. 90,000 in unreimbursed expenses. The Respondent denied employing him, contending he was engaged under a Sales Trainee Agreement dated 17th June 2022 earning only commission on successful insurance sales; he secured two proposals, none paid for, and made no sales. The court framed two issues: the nature of the relationship, and entitlement to reliefs. On the first, it held that a contract of employment requires determined or determinable remuneration and employer supervision; the Sales Trainee Agreement, which provided for training, IRA licensing and qualification for an Agency Contract conditional on minimum production, disclosed no employment relationship. The Claimant's pleadings using 'salary up-to' undermined his case, and evidence of two employment contracts not pleaded counted for nothing, parties being bound by their pleadings. On the second issue, the claim for unpaid salary was rejected; the commission claim failed because the Claimant made no sales and laid no foundation for the figures claimed. The court remarked that the Claimant 'tried to play a lottery with the court process' and dismissed the entire claim with costs to the Respondent.

Key legal issues

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01

Nature of the relationship between Claimant and Respondent

Holding

The relationship was that of a Sales Trainee/agent entitled to commissions on insurance sales, not an employee entitled to monthly salary

Reasoning

The Claimant executed a Sales Trainee Agreement on 17th June 2022 whose clauses provided for training, IRA licensing and qualification for an Agency Contract conditional on meeting minimum production. He failed to secure the required proposals. The pleading itself used 'salary up-to', indicating no fixed remuneration. The agreement did not contemplate an employment relationship with a monthly salary.

p. 4
02

Entitlement to salary, commissions and compensation

Holding

Claim for unpaid salary rejected as no salary contract existed; claim for commissions failed as claimant made no sales and did not prove figures claimed

Reasoning

Having found no employment relationship with a determinable salary, unpaid salary could not arise. Commissions were payable only on sales made, and the claimant admitted making no single sale producing paid premiums. The multi-million figures claimed had no foundation in pleadings or evidence.

p. 5

Legal principles established

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  • Parties are bound by their pleadings and evidence at variance with the pleadings counts for nothing
  • A contract of employment requires determined or determinable remuneration and employer authority/supervision

Court orders

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  1. 1.The Claimant's claim is dismissed with costs to the Respondent
  2. 2.Orders accordingly
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction (claim of unfair and wrongful termination of employment)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Ogutu v Madison Group (Madison Life Insurance) (Employment and Labour Relations Cause E928 of 2022) [2023] KEELRC 3409 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3409/eng@2023-12-29

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.