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ELRCOtherNot stated in judgment

Itambo v Nala Inc & another (Cause E910 of 2023) [2024] KEELRC 1529 (KLR)

Employment and Labour Relations Court
14 June 2024
JRJames Rika
604 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~2 min to read original · ~4 min brief

The bottom line

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A signed consultancy agreement does not settle the question—Kenya's Employment Court will look at the real working relationship before deciding if employment law applies.

What this practically means

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Executive summary

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The Claimant sued the Respondents, alleging that although she had executed a Consulting Agreement with the 1st Respondent (the 2nd being its subsidiary), she was in substance an employee who resigned due to a hostile work environment, and she sought compensation for unfair termination under the Employment Act. The Respondents filed a Notice of Preliminary Objection dated 28th November 2023 contending that the parties were in consultancy rather than employment, so the dispute lay outside the Court's jurisdiction. The parties consented to determination of the objection by written submissions, which were confirmed filed and exchanged at the last appearance on 3rd April 2024. The Court noted that the agreement's title and contents - fee rather than salary, consultant designation, control over means of performance, and clause 14 stating an independent contractor relationship - suggested consultancy. However, e-mails with Harsimran Cheema alluded to employment, referring to a job vacancy for Talent and Culture Manager in Nairobi, a monthly salary of Kshs 300,000, 35 days annual leave, share options worth USD 20,000, a training allowance, a laptop and medical insurance, with a promise of an employment contract. Applying Kenneth Kimani Mburu and the Mukisa Biscuit and Oraro v Mbaja principles, the Court held that a preliminary objection is a pure point of law and the nature of the relationship could not be conclusively determined preliminarily; the facts required a full trial. The Court declined the preliminary objection and made no order on costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the dispute between the parties can be determined preliminarily as a pure point of law, i.e. whether the Claimant was a consultant or an employee.
  2. 2.Whether, on the documents, the relationship was consultancy rather than employment, such that the dispute falls outside the Court's jurisdiction.

Key legal issues

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01

Whether the preliminary objection on jurisdiction could succeed given the disputed characterisation of the relationship

Holding

It could not; the presence of documents suggesting employment rendered the issue factual and unfit for preliminary determination.

Reasoning

Although the agreement was titled a Consultancy Agreement, with fees, independent contractor language and clause 14, e-mails referring to a job offer as Talent and Culture Manager, a monthly salary of Kshs 300,000, leave, share options, training allowance and medical insurance created doubt as to whether the Claimant was a consultant or an employee. Such contested facts must be tested at a full trial and cannot be resolved on a preliminary objection, which is a pure point of law.

p. 2

Legal principles established

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  • Whether a relationship is one of consultancy or employment must be determined by looking at and beyond the written agreement; the executed agreement is not conclusive.
  • A preliminary objection must be a pure point of law and must not be blurred with factual details liable to be contested and proved through evidence.

Court orders

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  1. 1.The Preliminary Objection is declined.
  2. 2.No order on the costs.

The bench

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One judgment of the whole court — no separate or dissenting opinions.

JR
majority

Wrote the judgment

Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court under the Employment Act (impugned by the Respondents' preliminary objection)

Relief refused

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Allowance of the Respondents' preliminary objection striking out the claim for want of jurisdiction

The nature of the relationship cannot be conclusively determined preliminarily; there are documents alluding to both consultancy and employment which require testing at a full trial.

p. 2

Costs

No order on the costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

to determine if the Parties are in a consultancy or employment relationship, the trier of facts must look at, and beyond the written agreements.
p. 2consultancy vs employment - substance over form
a preliminary objection is a pure point of law, which must not be blurred with factual details which are liable to be contested, and in any event, to be proved through the processes of evidence.
p. 2nature of a preliminary objection
a. The Preliminary Objection is declined. b. No order on the costs.
p. 2final orders

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, "Itambo v Nala Inc & another (Cause E910 of 2023) [2024] KEELRC 1529 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1529/eng@2024-06-14

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