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ELRCPartially AllowedEmployment and Labour Relations Cause E014 of 2025

Ngomba v Majlis Lamu Ltd aka Majlis Manda Island Resort Ltd

Employment and Labour Relations Court of Kenya
25 September 2026
10,049 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~40 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that a 'consultant' spa therapist was actually an employee, awarding her over Kshs 2.1 million for unfair pay cuts and termination.

What this practically means

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Executive summary

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The Claimant, a spa therapist at the Respondent's Manda Island resort from June 2019 to February 2025, sued claiming she was an employee whose commission-based wages were unilaterally cut from 30% to 20% (with the 2% service charge withdrawn) in November 2021, and whose employment was terminated verbally in February 2025 when she persisted in demanding the arrears. The Respondent contended she was a freelance consultant on commission-only basis, that the reduction was a commercially necessary adjustment she accepted by continuing to work, and that she resigned of her own accord. The court framed four issues and held, first, that the label of 'consultant' was not decisive: applying the multiple/economic reality test, and placing the burden on the Respondent (reinforced by section 10(7) of the Employment Act, it having kept no written contract), the court found the Claimant was an employee under an oral contract of service. Commission-based pay was held to be a mere computational formula, and the absence of statutory deductions a feature of the employer's non-compliance. Second, the Respondent failed to prove resignation; the termination was found substantively and procedurally unfair. Third, the reduction and withdrawal of the service charge were unilateral, without consultation or consent, hence unlawful, and the acquiescence/waiver defence failed as the Claimant protested and relied on a promise of reimbursement. The arrears claim was not time-barred, being a continuing injury. On quantum, the court adopted the lower of the parties' monthly figures, awarding Kshs. 1,412,506.59 withheld wages, Kshs. 282,501.32 service charge, Kshs. 83,850 notice pay and Kshs. 357,760 as four months' compensation for unfair termination, plus a certificate of service, interest, and costs to the Claimant.

Questions the Court framed

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

  1. 1.What was the nature of the relationship between the Claimant and the Respondent: was it a contract of service or a contract for service?
  2. 2.If the Claimant was an employee, was her employment terminated by the Respondent, and if so, was the termination fair?
  3. 3.Was the reduction of the Claimant's remuneration from 30% to 20% and the withdrawal of the 2% service charge lawful, and did the Claimant, by her conduct, acquiesce in the reduction and waive her right to pursue it?
  4. 4.What reliefs, if any, is the Claimant entitled to?

Key legal issues

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01

Nature of the relationship: contract of service or contract for service

Holding

The Claimant was an employee under an oral contract of service from 18th June 2019, paid 30% commission plus 2% service charge monthly; the Respondent failed to prove she was an independent consultant.

Reasoning

Applying the multiple/economic reality test, the court weighed all indicia: the Respondent's premises, tools and equipment, its clients and fixed prices, control and integration, uniform, meals and accommodation, its own documents describing her as an employee, its 'resignation' narrative, and her lack of financial risk. Commission-only pay was held to be a mere computational formula. The absence of statutory deductions was a feature of the employer's non-compliance, not of independence.

p. 10
02

Whether the employment was terminated and whether the termination was fair

Holding

The Respondent terminated the employment verbally; the termination was both substantively and procedurally unfair.

Reasoning

The employer asserting resignation bore the burden of proving it; the tick on the uniform handover form had unexplained authorship and the WhatsApp message was a follow-up on the demand, not an invitation to return. Having taken the position that it did not terminate, the Respondent advanced no reason, failing sections 43 and 45, and complied with none of the section 41 procedural requirements.

p. 12
03

Lawfulness of the reduction from 30% to 20% and withdrawal of the 2% service charge; acquiescence and waiver

Holding

The reduction and withdrawal were effected unilaterally, without consultation or consent, contrary to sections 10(5), 13 and 17 of the Employment Act and Article 41 of the Constitution, and were unlawful; the Claimant neither acquiesced nor waived her claim.

Reasoning

Variation of a fundamental wage term requires genuine consultation and consent; a communication is not a consultation and a consultation is not a consent. Acquiescence requires knowledge, conduct inducing detrimental reliance; the Claimant protested persistently and continued working in reliance on a promise of reimbursement. Acceptance of part payment under protest is not waiver of the balance.

p. 12
04

Limitation of the arrears claim

Holding

The claim was not time-barred; the underpayment was a continuing injury ceasing in February 2025 and the suit was filed in August 2025, within twelve months of cessation.

Reasoning

Section 90 of the Employment Act allows three years for actions arising out of the Act or a contract of service, or twelve months after cessation for continuing injury. The monthly underpayment recurred from late 2021 and ceased only when employment ended in February 2025.

p. 14
05

Quantum of reliefs

Holding

Awarded withheld wages of Kshs. 1,412,506.59, service charge of Kshs. 282,501.32, notice pay of Kshs. 83,850, and four months' gross wages (Kshs. 357,760) as compensation, plus certificate of service.

Reasoning

To avoid double reward and confine the award to pleadings and evidence, the court adopted the lower of the parties' monthly figures from the Respondent's comparison schedule, applied 10% and 2% to the same gross figure, and used the pleaded February 2025 figure for notice and compensation. Compensation was fixed at four months considering length of service, her status as best performer, non-contribution, and the aggravating circumstances of the termination.

p. 15

Legal principles established

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  • The label parties attach to a relationship is not conclusive; employee status is determined on the substance of the relationship as it actually operated.
  • Commission-based remuneration does not of itself make a worker an independent contractor; output-based pay is a recognised mode of paying employees.
  • Where the working relationship is admitted and the employer contends the worker is an independent contractor, the employer bears the burden of proving that fact.
  • An employer who fails to produce a written contract required under sections 9 and 10 of the Employment Act cannot rely on that absence to disprove employment; under section 10(7) the burden of proving or disproving the alleged term is on the employer.
  • A unilateral reduction of wages is not a variation of the contract but a breach of it; variation of a fundamental term requires genuine consultation and the employee's consent.
  • An employer's breach of statutory obligations (deductions, leave) cannot be relied on as evidence that the worker was not an employee.
  • Continued work under reduced pay, especially where the employer promised reimbursement, does not amount to acquiescence or waiver of the withheld wages.
  • Resignation will not readily be inferred; the intention to resign must be clear and unequivocal, and an unexplained tick on a uniform handover form does not suffice.

Court orders

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  1. 1.A declaration that the Claimant was an employee of the Respondent from 18th June 2019 until February 2025, and that the termination of her employment was substantively and procedurally unfair
  2. 2.Payment of withheld wages (10%) of Kshs. 1,412,506.59 for 16th November 2021 to 15th February 2025
  3. 3.Payment of unpaid service charge (2%) of Kshs. 282,501.32 for the same period
  4. 4.Payment of one month's wages in lieu of notice of Kshs. 83,850.00
  5. 5.Compensation for unfair termination of four months' gross wages, Kshs. 357,760.00
  6. 6.Sums awarded subject to statutory deductions, if any, applicable in law
  7. 7.Interest at court rates on the withheld wages and service charge from the date of filing suit, and on the rest of the sums from the date of judgment, until payment in full
  8. 8.The Respondent to issue a certificate of service under section 51 of the Employment Act within thirty (30) days of the judgment
  9. 9.The Respondent to bear the costs of the suit

The bench

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

majority

Wrote the judgment

Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act, anchored on the existence of an employment relationship

Relief refused

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Maximum compensation for unfair termination (12 months' gross wages, Kshs. 1,006,200.00)

Court awarded only four months' gross wages as reasonable in the circumstances

p. 16

Interest on withheld wages and service charge from the date each payment fell due

Interest ordered only from date of filing suit given need for reconciliation of figures

p. 16

Claimant's pleaded computation of the wage disparity and service charge

Figures found inconsistent and not fully correct; award confined to lower of the parties' monthly figures

p. 15

Costs

The Respondent shall bear the costs of the suit; costs follow the event as the Claimant substantially succeeded.

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.

A relationship that bears all the hallmarks of employment does not cease to be one because it is called a "consultancy", and the Court's duty is to pierce the veil of the label and ascertain the true relationship between the parties.
p. 5Substance over label in employment status
Remuneration by output is thus a recognised mode of paying employees, not a badge of independent contracting.
p. 7Commission-based pay and employee status
If the failure to accord an employee statutory benets were proof that the worker was not an employee, the most delinquent employers would be the best insulated from liability.
p. 9Employer's statutory default cannot disprove employment
A communication is not a consultation, and a consultation is not a consent. To announce a decision already made is not to consult about it.
p. 12Unilateral variation of wage terms
Acceptance of part payment of wages under protest is not a waiver of the balance.
p. 14Waiver
A tick on a uniform handover form, whose authorship is unexplained, cannot be elevated into a clear and unequivocal act of resignation.
p. 10Inference of resignation
In the upshot, judgment is entered for the Claimant against the Respondent in the following terms
p. 17Disposition
The Respondent shall bear the costs of the suit.
p. 17Costs order
It is so ordered.
p. 17Final orders

Issues in the judgment

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minor

Respondent's witness's assertion of engagement 'since 2021' contradicts its own pleadings and submissions accepting engagement on 18th June 2019

minor

Respondent's list of documents dates Edward's WhatsApp message 18th January 2025, but the screenshot shows it was sent 1st July 2025

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, "Ngomba v Majlis Lamu Ltd aka Majlis Manda Island Resort Ltd", Case Analysis (2026). Employment and Labour Relations Cause E014 of 2025. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2748/eng@2026-09-25

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