[2022] KEELRC 449 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI

CAUSE N0. 94 OF 2015

NAKIA J. WHITE................................................CLAIMANT

VERSUS

CENTRE FOR RIGHTS EDUCATION

AND AWARENES.........................................RESPONDENT

JUDGMENT

1. The claimant filed suit on 19th January, 2015 and the Statement of Claim was amended and filed on 15th November, 2019 seeking a declaration that her termination from employment was unlawful and unfair and that the respondent is liable to pay her terminal benefits.

2. The claimant therefore prays for:-

(i) One month salary in lieu of notice in the sum of Kshs 187,000.

(ii) Unpaid wages for a month in the sum of Kshs 187,000.

(iii) Equivalent of 12 months’ salary in compensation for the unlawful termination.

(iv) Payment for the remainder of the contract.

(v) Interest and costs.

3. The claimant testified that she recorded a witness statement dated 13th November, 2019 which she adopted as her evidence in chief. The claimant also produced list of documents attached to the claim which she relied on to substantiate her case.

4. The claimant (C.W.1) testified that she was employed by the respondent on 1st August, 2014 as an external consultant to offer expert advice and management to the Respondent’s Women and Leadership Programme and to manage the implementation of the project titled Towards Strengthening Women’s Leadership in Kenya.

5. That by a letter dated 1st September, 2014, the respondent converted the engagement of the claimant to an employment relationship and the claimant was thus employed as a Director of Women’s Leadership and Governance Programme for a term of one year.

6. That the claimant was paid a gross monthly salary of Kshs 187,500 subject to a 20% withholding tax.

7. That the contract provided for either party to terminate the contract by giving one month notice.

8. That the respondent secured a one year permit for the claimant. That in the application, the respondent stated that the claimant was its employee and undertook to pay the claimant’s monthly salary.

9. That the claimant worked diligently until 6th October, 2014, when she was issued a letter terminating her contract for the reason that the Respondent was dissatisfied with the performance.

10. C.W.1 testified that she had not received prior any complaint from the respondent regarding her performance and at no time did the respondent carry out any appraisal or performance review on her work.

11. C.W.1 testified that the termination was unlawful, unfair and unprocedural as it violates mandatory provisions of the Employment Act, 2007.

12. That the respondent failed to pay the claimant one month salary in lieu of notice. That the claimant was not taken through a disciplinary process or a performance review process and had no chance at all to explain herself.

13. That the conduct by the respondent violated her right to fair labour practice and was unlawful and unfair.

14. The claimant prays for the reliefs set out in the Statement of Claim.

Response

15. R.W.1, Leah Wangechi testified for the respondent that she was the Executive Director of the respondent. That the respondent is a Women’s right Organisation based in Kenya. That it operates in ten (10) countries. That the organization has bilateral partners who support the organization. That the organization has time bound projects and the respondent outsources experts to support implementation of the projects.

16. R.W.1 adopted a witness statement dated 8th March, 2021, as her evidence in chief and produced a list of documents filed on 26th February, 2015 marked bundle ‘B’.

17. R.W.1 testified that the organization employed expatriates. That the claimant was a consultant and not an employee. That her consultancy agreement was dated 1st August, 2014. That R.W.1 signed an application letter to the immigration department to obtain work permit for the claimant for one year. R.W.1 admitted that the letter stated that the claimant was an employee of the respondent. R.W.1 said that the claimant was a director of Women’s Rights Leadership Programme and the respondent had an obligation to obtain a work permit for her. R.W.1 said that the letter stated that the claimant was paid a consultancy fees of Kshs 187,500 per month and withholding tax was retained by the employer. That Pay As You Earn (PAYE) was not deducted from the fees.

18. R.W.1 stated that on or about 29th September, 2014, the claimant was attending a workshop at Tharaka Nithi County. That the claimant abandoned the workshop and R.W.1 was called by two colleagues named Ken Kigunda and Mick Mutembei, who reported the desertion by the claimant. R.W.1 stated that the Matter was not reduced to writing. R.W.1 stated that the respondent terminated the consultancy of the claimant by a letter dated 6th October, 2014. That the letter highlighted the failures by the claimant in her work.

19. That no disciplinary hearing was held but a meeting with her was done at the head office before the letter of termination was given to her. That the meeting discussed her performance. That she was paid for days worked in September, 2014. R.W.1 stated that she advised the respondent to pay the claimant in lieu of notice. R.W.1 stated that the claimant was fully aware that Pay As You Earn; National Social Security Fund (NSSF) and National Hospital Insurance Fund (NHIF) deductions were not payable under the Consultancy Agreement.

20. R.W.2 Kenneth Kigunda adopted his witness statement dated 9th March, 2021. He testified that the claimant was a consultant. That on 29th September, 2014, during a workshop at Legacy Hotel in Chuka, the claimant complained about the standard of the hotel and its services.

21. That the claimant requested R.W.2 to help find her a conducive hotel. That R.W.1 and a colleague named Antony drove to Nkubu town in Meru County and settled for Heritage Hotel. However, if the claimant settled there, the workshop would have to move there or else she would have to travel at least (2) hours every morning which was not viable.

22. That the meeting continued at Chuka, and during one of the sessions, the claimant stormed out of the workshop in protest demanding to be taken back to Nairobi.

23. R.W.2 told the Court that he was instructed by the employer not to comply with her demands since the workshop was still ongoing.

24. That the claimant made her own arrangement, and left Chuka for Nairobi and did not participate in the workshop.

25. The respondent denied the suit by the claimant and filed a counterclaim that the conduct by the claimant in failing, refusing and neglecting to manage the project affected timely implementation of the project. That her behavior was unethical and malicious and was in breach of her contract of employment.

26. The respondent prays that the parties to the suit be subjected to arbitration process as indicated in the consultancy contract and the claimant be condemned to costs of the suit.

27. The parties filed written submissions and the issues for determination are:-

(a) Whether the claimant was an employee or a consultant for service.

(b) If answer to (a) is in the affirmative, whether the termination of the contract of employment was for a valid reason following a fair procedure.

(c) Whether the claimant is entitled to the reliefs sought.

28. The claimant was contracted vide a document titled “Consultancy Contract” dated 1st August, 2014, in terms of which the respondent experienced desire to engage the services of a consultant on terms stated in the agreement.

29. The claimant was to oversee Flow Programme on a day to day basis and in particular manage a project titled “Towards Strengthening Women’s Leadership in Kenya.”

30. She was to lead a team of about 4 people including a communication office, project assistant, project intern and Finance officer among others.

31. The claimant was responsible for the delivery of the stated project outputs, write and submit reports.

32. The claimant was to report to the office of the Executive Director and communicate with development partners with express authority of the Executive Director.

33. The contract was for a one year period from 1st August, 2014 up to 30th July, 2015.

34. The claimant was to be paid a monthly gross salary of Kshs 187,500 subject to deduction of 20% withholding tax.

35. In terms of clause 8 titled ‘status of the contract’it is expressly provided:-

“This is an Agreement for performance of a service and is not for the engagement of an employee.”

provided the respondent would be responsible for securing a work permit for the consultant at its own costs.

36. To this end, it is the claimant’s case that the respondent in its letter to immigration department dated 1st September, 2014 applying for work permit referred to the claimant as ‘an employee’and therefore, she was an employee but not a Consultant for service. The respondent further informed the immigration officer that the claimant would be paid a gross salary of Kshs 187,500 and Net salary of 150,000. This letter is signed by both the respondent and the claimant. The question the Court must ask is whether this letter altered the terms of engagement between the claimant and the Respondent.

37. The claimant served the respondent for only (2) months since the consultancy contract was terminated by a letter dated 6th October, 2014 for the reason that the respondent was dissatisfied with the performance of the claimant as set out in the letter.

38. In Kenneth Kimani Mburu and Another –vs- Kibe Muigai Holdings Limited [2014] eKLR, the Court held that in determining the nature of the relationship and in particular whether one was an independent contractual consultant or an employee, the Court was not bound by the four corners of the contract, but had to discern the intention of the parties from their declarations and conduct.

39. In the present case, the contract expressly classified the claimant as a consultant for service but not an employee. The claimant was to serve a specific, time bound project, as the Leader of a team of staff. She was to report to the Executive Director and write reports on the implementation of the project. The contract did not designate the monthly pay as a fees or salary specifically but the sum payable was not subjected to Pay As You Earn as a salary is normally done. Instead the claimant was only to pay withholding tax of 20% as is the case with Consultancy fee.

40. There is no evidence before Court whether the claimant reported to work daily from 8. 00 am to 5 p.m, and whether she was under daily supervision of the Executive Director.

41. There is also no indication whether the claimant was under any medical cover by the respondent or was entitled to annual leave as is normally the case with an employees.

42. In Godfrey Mwampembwa –vs Nation Media Group Limited [2021] eKLR,the Court cited the case of James Heather Haya –vs- African Medical Research Foundation (AMREF) [2014] eKLR per Marete, J. as follows:-

“It is not the duty of this Court to redraw agreements by the parties. The Court can only come in to facilitate an interpretation and implementation of these contracts and no more.”

43. This is the parole evidence rule enunciated under Sections 97 and 98 of the Evidence Act Cap. 80 Laws of Kenya.

44. Section 97 of the Act provides:-

“(i) when the terms of a contract or of a grant or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract.... except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions.”

45. In terms of the contract between the parties herein, there is no reference to any secondary evidence to be used in the interpretation of the contract.

46. The contract is clear that the claimant was employed as a consultant for service and for the avoidance of doubt, the status of the claimant states that under Clause 8 that the claimant is not engaged as an employee.

47. There is no evidence before Court which allows invocation of exception to the parole rule set out under Section 98 of the Evidence Act.

48. The application for a resident permit adduced by the claimant does not suffice to nullify the express terms of the contract for service between the parties herein.

49. Accordingly, it was lawful for the respondent to terminate the contract between parties, only in terms of the contract as encumbered by the provisions of Employment Act, 2007 which regulate contract of employment with regard to termination in terms of Sections 35, 36, 41, 43, 44 and 45 of the Act.

50. In terms of Clause 12 of the contract, either party could terminate the agreement by giving to the other party Thirty (30) days prior notice in writing of the party’s intention to do so.

51. The respondents in this case, terminated the consultancy contract forthwith and with immediate effect. The respondent violated the contract in this respect.

52. The notice clause is supposed to prepare the other party for the reality of termination and prepare for the exit. The claimant being an expatriate consultant would require the preparation even more due to the many things one has to do to leave a foreign country.

53. Accordingly, the claimant is entitled to damages for breach of the contract since the respondent has not proved to the satisfaction of the Court that the claimant had not met her end of the bargain. There is no evidence adduced by the respondent to show that it conducted a process to prove that the claimant had breached terms of the contract.

54. In this respect, the claimant had only served two (2) months of her one year contract and this being a contract for service as opposed to an employment contract, we find that the claimant is entitled to damages and/or specific performance of the contract upon prove of breach of the contract by the respondent.

55. Specific performance is an equitable remedy available for breach of a contract. A contract for service or a consultancy contract, to do with offering of human resource by one party to the other falls within matters related to Employment and Labour within the meaning of Section 12 of the Employment and Labour Relations Court Act 2014 as read with Article 162(2) (b) of the Constitution of Kenya, 2010.

56. Therefore, this Court has the mandate to decree specific performance of a labour related service contract by compelling the party in breach to perform its contractual obligations.

57. The Court therefore finds the claimant is entitled to the reliefs sought and enters judgment against the respondent as follows:-

The respondent to pay the claimant

(i) One month salary in lieu of notice Kshs 187,000.

(ii) Salary for 6 days worked in the month of October, 2014 in the sum of Kshs 37,200.

(iii) General damages equivalent to four (4) months’ salary for the breach of the contract for service by the respondent to the loss and detriment of the claimant in the sum of Kshs 748,000.

(iv) Interest at Court rates from date of judgment till payment in full.

(v) Costs of the suit.

DATED AND DELIVERED AT NAIROBI (VIRTUALLY) THIS 24TH DAY OF MARCH, 2022

Mathews N. Nduma

Judge

Appearances

Mr. Adiwo for claimant

M/s Milimo for Respondent

Ekale – Court Assistant.