Kenya Labour law: An introduction
What is Labour Law?
Labour law is a body of legislation under the Kenya employment act that defines your rights and obligations as workers and employers in the workplace. The Kenya Labour law (also spelled as "labor" law or called "employment law") mediates the relationship between workers (employees), employers, trade unions and the government. Collective labour law relates to the tripartite relationship between employee, employer and union. Second, individual labour law concerns employees' rights at work and through the contract for work. The labour movement has been instrumental in the enacting of laws protecting labour rights in the 19th and 20th centuries. Labour rights have been integral to the social and economic development since the Industrial Revolution. Employment standards are social norms (in some cases also technical standards) for the minimum socially acceptable conditions under which employees or contractors will work.
At Community level, labour law covers two main areas:
Working conditions, including working time, part-time and fixed-term work, and posting of workers
Information and consultation of workers, including in the event of collective redundancies and transfers of undertakings.
History of Kenya labour law
Kenya Labour laws arose due to the demand for workers to have better conditions, the right to organize, or, alternatively, the right to work without joining a labour union, and the simultaneous demands of employers to restrict the powers of workers' many organizations and to keep labour costs low. Employers' costs can increase due to workers organizing to achieve higher wages, or by laws imposing costly requirements, such as health and safety or restrictions on their free choice of whom to hire. Workers' organizations, such as trade unions, can also transcend purely industrial disputes, and gain political power. The state of labour law at any one time is therefore both the product of, and a component of, struggles between different interests in society.
The sources of Kenya labour law
The sources of labour law in kenya are found in statutes(Acts of Parliament), the constitution of kenya 2010, the common law and international treaties, principles and conventions.
the Acts of Parliament include the Kenya Employment Act, the Labour relations Act that regulates the relationship between trade unions and employers or employees and employers or employers' organisation, the Labour Institutions Act that creates the National Labour Board, the Commission of Inquiry, the Wages Councils (both the general and the agricultural wages council), the Directorate of Labour Administration and Inspection and the Employment Agencies under the Director of employments ambit.
the Constitution in its article 40 provides for the right to associate, article 41 right of workers, employers, trade unions and employers organisation and as well in its subsection 5 the right to collective bargaining. in its article 36 freedom of association, article 37 right to assembly, picketing and demonstration.
the common law principles also apply such as the tort of vicarious liability where the employer is responsible for the acts of an employee, civil actions in industrial accidents and also imposes a duty of the employer and employee such as confidentiality on the employee and the issue of compensation of part of the employer for injury or unfair termination of contract.
the Constitution in its article 2(5)(6)provides for the adoption of internationally generally accepted principles and the ratified treaties to for part of Kenyan law. these will include conventions of the international labour organization such as the minimum age convention, Equal Remuneration Convention etc. Customary law however does not apply.
The constitution of Kenya and labour laws
The KenyanConstitution contains several provisions of relevance to employment and labour law:
the right to equality;
protection of dignity;
protection against servitude, forced labour and discrimination;
the right to pursue a livelihood; and
protection for children against exploitative labour practices and work that is hazardous to their wellbeing.
It is important to interpret all labour legislation in light of the Constitution.
The Constitution deals specifically with labour relations, providing that everyone has the right to fair labour practices,and specifically the right
to form and join a trade union;
to participate in the activities and programmes of a trade union; and
to strike
Every employer, meanwhile, has the right
to form and join an employers’ organisation; and
to participate in the activities and programmes of an employers’ organisation.
Every trade union and every employers’ organisation has the right
to determine its own administration, programmes and activities;
to organise; and
to form and join a federation
Finally, every trade union, employers’ organisation and employer has the right to engage in collective bargaining.
Employment Act
The Kenya labour laws of 2007(Employment Act, Labour Institutions Act, Labour Relations Act, Occupational Safety and Health Act and Work Injury Benefits Act) replaced the Kenya Employment Act and Regulation of Wages and Conditions of Employment Act. lt establishes minimum terms and conditions of employment. Unlike the repealed Act, the new one defines a number of common terms – probationary contract, migrant workers, worst forms of child labour, dependant, forced or compulsory labour and HIV.
lt also provides for prohibition against forced labour, discrimination in employment on the basis of race, colour, sex, language, religion, political or other opinion, nationality, ethnic or social origin, mental or HIV status and sexual harassment.
lt deals with payment, disposal and recovery of wages, allowances and deductions of an employee. The major changes are that the employer cannot deduct employees wages exceeding two thirds. The previous law provided for deductions up to 50 per cent. Further, all employees are entitled to itemised payslips or salary statements. The law also provides for basic conditions of a contract of service – hours of work and annual, maternity and sick leave, housing, water, food and
medical attention. In the new provision, an employee is entitled to three months’ maternity leave. However, the employee shall not forfeit annual leave. The law introduces a 14-day paternity leave.
The legislation deals with termination and dismissal. For the first time, the law provides for payment of service pay for every year worked to an employee whose contract has been terminated. Further, the legislation provides that the Labour minister may require an employer to insure his employees against redundancy through an employment insurance scheme.
The employers are also required to justify termination of employment. The law introduces the concept of unfair dismissals. lt also regulates the engagement of children in employment. lt prohibits employment of children in any activity that constitutes child labour. It also sets the minimum age and conditions of employment of a child.
Employers are required to keep records and make them available for inspection. They are also required to notily the Director of Employment of vacancies, termination and abolition of offices. The law also outlines requirements for a foreign contract and sets out complaint procedures and jurisdiction in cases of disputes between the employee and
employer.
Labour Institutions Act
The law establishes institutions and organisations for the administration and management of labour relations the national Labour Board, the industrial Court, Committee of Inquiry, Labour Administration and Inspection, the Wages Council and Employment Agencies.
The law, however, does not apply to the Armed Forces, Kenya Police, Prisons Service, Administration Police and the National Youth Service.
National Labour Board
The members are appointed by the Minister for Labour and drawn from the most representative federation of trade unions and employers, independent members and Government officials. The boards role is to advise the minister on employment and labour, legislation, trade unionism and codes ofgood conduct.
It also advises on ILO issues, international or regional associations, systems of labour inspection and the administration of labour Acts, public employment service, productivity, appointment of wages councils and members of the Industrial
court.
Other issues include setting compensation benelits, manpower development, registration, suspension and cancellation of registration of trade unions and employers organisations.
Kenya Labour Laws: Minimum Employment Rights and Benefits under the Employment Act.
Hours of work – An employee is entitled to at least one rest day in every period of seven days.
Maternity Leave Provisions
Maternity Leave is for 3 months with full pay. Annual leave not forfeited on account of an employee having taken her maternity leave
Sick Leave in Kenya
Sick Leave in Kenya only available after 2 months of employment.
The minimum period of entitlement is seven days with full pay and seven days with half-pay for every twelve months, subject to production of a certificate of incapacity to work duly signed by qualified medical practitioner.
Paternity Leave in Kenya
Paternity leave in Kenya is two weeks with full pay. Paternity leave is only applicable to a man whose recognised wife delivers a baby. What this means is that paternity leave is not open to any man, but only those who are married and whose wives are recognised by the employers. "A male employer shall be entitled to two weeks paternity leave with full pay."
Annual Leave in Kenya
Annual leave in Kenya is 21 days with full pay. Annual leave is exclusive of public holidays, weekly rest days or any leave days stated by law (paragraph 9 of the Regulation of Wages (General) Order, subsidiary to the Regulations of Wages and Conditions of Employment Act).
Public Holidays in Kenya
Public holidays and weekly rest days (one per week) on full pay in addition to leave days. Where employees work on public holidays they are entitled to payment at double their wage rate in addition to their normal wage.
Public holidays in Kenya are;
New Year’s Day - January 01
Good Friday - April
Easter Monday - April
Labour Day - May 01
Madaraka Day - June 01
Mashujaa Day (Heroes Day) - October 10
Kenyatta Day - October 20
Jamhuri Day (Independence Day Kenya) - December 12
Christmas Day - December 25,
Boxing Day - December 26
The Evolution of Labor Law in Kenya
The genesis of labor law and practice can be traced to the 19th century when need arose for the colonial government to pass legislation to ensure adequate supply of cheap labor to service the emerging enterprises in agriculture, industry and in the service sector. Terms and conditions of employment were regulated by statutes and the common law. The law of contract in Kenya was originally based on the Contract Act, 1872, of India, which applied on contracts made or entered into before 1st of January 1961. The Indian Contract Act applied to the three countries Kenya, Tanzania and Uganda . Since then the Kenyan law of contract has been based on the English common law of contract, under the Kenyan Law of Contract Act (Cap. 23), section 2 (1).
With industrialization, towards the middle of the 20th century, an organized trade union movement was well established.
The first wage earners’ associations in Kenya can be traced back to the early 1940s and soon after the Second World War.
The first trade union regulation was made in the introduction of Ordinance No. 35 of 1939 that required all crafts organizations to apply for registration which they could be granted or denied depending on whether they had legitimate dealings consistent with government policy. The Ordinance also permitted any group of seven people to form a trade union and operate as one upon registration. Cancellation of registration under the Ordinance was not subject to appeal or open to question in a court of law (Aluchio 1998, 3).
In 1948, in order to gain complete hold on the wage earners organizations the government brought in a Trade Union Labor Officer, to be attached to the Labor Department with the duty to foster "responsible" unionism (Ananaba 1979, 3). In 1952 a more detailed piece of legislation was enacted for Trade Unions but again with significant omissions. It lacked necessary provisions for effective operation of trade unions. It did not legalize peaceful picketing or provide immunity against damages as a result of strikes. On the other hand, the government encouraged creation of staff associations and works committees since they fitted in its interests to confining workers’ organization to economic imperative alone and also lacked strike powers.
This rigid control of trade unions was maintained by the colonial government until the end. This notwithstanding, the movement was able to grow both in numerical strength and power. At independence the total number of following was about 155,000, 52 trade unions, with four centers formed and registered, namely, East African Trade Union Congress (EATUC), Kenya Federation of Registered Trade Unions (KFRTU), Kenya Federation of Labor (KFL) and Kenya Africa Workers Congress (KAWC).
Industrial confrontation arose not merely from traditional trade union activities, but also from the movement’s political role in the struggle for freedom from colonial domination, particularly after individual political leaders had been arrested and placed in detention.
On the threshold of independence however, both employers and trade unions, felt that it was vital for the infant nation to make economic process that capital and labor should work together in harmony: the incidence of strikes and lockouts had to be drastically reduced.
As a result, in October 1962, a landmark was established with the signing of the Industrial Relations Charter by the government of Kenya, the Federation of Kenya Employers and the Kenya Federation of Labor, the forerunner of COTU (K), the Central Organization Of Trade Unions (Kenya).
The Industrial Relations Charter spelt out the agreed responsibilities of management and unions and their respective obligations in the field of industrial relations, it defined a model recognition agreement as a guide to parties involved, and it set up a joint Dispute Commission.
The Industrial Relations Charter has been revised twice since then, but remained the basis for social dialogue and labor relations in Kenya throughout the years. Currently the “Charter” is under review again; the parties have already produced a draft Charter in 2001 that might be signed in the context of the overall Labor Law review.
With the set up of an Industrial Court in 1964, one additional basic cornerstone was laid for the development of amicable conflict resolution in Kenya.
The Labor Law Reform Agenda In May 2001 a Taskforce to review the Labor Laws was appointed by the Attorney General (Gazette Notice No. 3204), within an International Labor Organization project. The terms of reference for the Taskforce were:
To examine and review all the labor laws including the Employment Act (Cap.226); the Regulation of Wages and Conditions of Employment Act (Cap. 229); the Trade Unions Act (Cap. 233), the Trade Disputes Act (Cap. 234), the Workmen’s Compensation Act (Cap. 236), the Factories Act (Cap. 514) and make recommendations for appropriate legislation to replace or amend any of the labor law statutes; To make recommendations on proposals for reform or amendment of labor laws to ensure that they are consistent with the Conventions and Recommendations of the International Labor Organization to which Kenya is a party; and To make recommendations on such other matters related to or incidental to the foregoing. Major points of concern were:
Extension of the application of protective labor regulation into the informal sector; Harmonization of the Kenyan labor legislation within the East African Community; Merging and redrafting the different Acts in order to produce a user-friendly and comprehensive labor legislation for benefit the people; The elimination of remaining colonial heritage in employment relations and contracts; The introduction of an Industrial Court of Appeal to overcome contradicting jurisdiction between the High Court and the Industrial Court; Review registration procedures and trade union monopoly based on the Trade Unions Act (Cap. 233) in view of the ratification of the ILO Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87); Review regulations on casual employees; Setting up of an administration system which promotes involvement and democratic participation of the social partners (role of the Labor Advisory Board, possible involvement of civil society concerned in specific fields, etc.); Review possible limitations of excessive powers and influence of the Minister for Labor in industrial relations; Creation of an efficient labor administration system (inspection pp.) which is capable of effectively enforcing the laws; Review the election procedures for trade union officials, and implement a system of directly elected workers’ representatives; The establishment of an affordable, not contribution based, workers social insurance scheme, complementing the National Social Security Fund; Promote equity and equality in employment by incorporating anti-discriminatory (gender, HIV/AIDS) provisions into the Employment Act (Cap. 226), and as well as provisions against discriminating sexual harassment. The tripartite Taskforce, comprising of members from the government, the trade unions (COTU) and the employers organization (FKE), officially handed over five new texts to the Attorney General in April 2004. The five drafts, when they reach their final version, will replace the existing legislation on Labor Law. These drafts relate to the following matters:
Draft on the Labor Relations Act: an act to deal with the registration, regulation, management and democratization of trade unions and employers organizations or federations, to promote sound labor relations through the protection and promotion of freedom of association, the encouragement of effective collective bargaining and promotion of orderly and expeditious dispute settlement, conducive to social justice and economic development and related matters. Draft on the Labor Institutions Act: an act for the establishment of Labor Institutions, to provide for their functions, powers and duties. This text introduces a system of labor courts with exclusive jurisdiction on labor matters. The act establishes Subordinate Labor Courts, as well as a National Labor Court. The latter is a superior court having the same authority, inherent powers and standing in relation to matters under its jurisdiction, as the High Court. Appeals on decisions from Subordinate Labor Courts lie in the National Labor Court. Second appeals lie in the Court of Appeal. This text also creates a National Labor Board, whose main duty is to advise the Minister on labor legislation and matters. Draft on the Employment Act: an act to declare and define the fundamental rights of employees, to provide basic conditions of employment of employees and to regulate employment of children. This act contains provisions on freedom from discrimination and from sexual harassment. Provisions on freedom from forced labor expressly domesticate ILO Forced Labor Convention, 1930 (No. 29) and the Abolition of Forced Labor Convention, 1957 (No. 105), both ratified by Kenya in 1964. Draft on the Occupational Health and Safety Act: an act to provide for the safety, health and welfare of persons employed, and all persons lawfully present at workplaces and related matters. Draft on the Work Injury Benefits Act: an act to provide for compensation to employees for injuries suffered and occupational diseases contracted in the course of employment, for insurance of employees and related matters. These texts do now have to follow the path towards adoption, which will hopefully be completed by the end of 2004. Other sources of labor regulationEmployment relations in Kenya are regulated by a number of sources: constitutional rights, as mentioned above; statutory rights, as set out in statutes and regulations; rights set by collective agreements and extension orders of collective agreements; and individual labor contracts.
These legal sources are interpreted by the Industrial Court, and in some cases by the ordinary courts (see above). A particularly important role to play has the tripartite Industrial Relations Charter that laid the foundation for an industrial relations system already prior to Kenya’s independence in 1963. International standards, especially ILO Conventions ratified by Kenya are used by the government and courts as guidelines, even though they are not binding.
Acts of Parliament in the realm of civil and criminal law, which have provisions that may have impact on individual and collective labor relations include the Contract Act, Local Government Act, Public Service Commission Act, the Children Act, laws concerning the Armed Forces, and legislation dealing with the establishment of parastatals.
The following Acts of Parliament form the labor legislation framework for the country: Employment Act (Cap. 226); Regulation of Wages and Conditions of Employment Act (Cap. 229), - Industrial Training Act (Cap. 237), - Workmen’s Compensation Act (Cap. 236), - Shop Hours Act (Cap. 231), - Mombasa Shop Hours Act (Cap. 232), - Factories Act (Cap. 514), - Trade Unions Act (Cap. 233),- Trade Disputes Act (Cap. 234); Companies Act (Cap. 486); Bankruptcy Act (Cap. 53); Merchant Shipping Act (Cap. 389); Export Processing Zone’s Act (Cap. 547); Immigration Act (Cap. 172); Pension Act (Cap. 189); Retirement Benefits Act (No. 3 of 1997); National Social Security Fund Act (Cap. 258); National Hospital Insurance Act (Cap. 255); Provident Fund Act (Cap. 191); Public Health Act (Cap. 242). In individual labor cases British common law is applicable up to now. The Judiciary Act (Cap. 16) of 1967, section 3(1) states: “The jurisdiction of the High Court and of all subordinate courts shall be exercised in conformity with:
a) The Constitution; b) subject thereto, all other written laws; including the Acts of the Parliament of the United Kingdom (…);
c) subject thereto and so far as the same do not extend or apply, the substance of the common law, the doctrines of equity and the statutes of general application in force in England on the12th August 1897, and the procedure and practice observed in courts of justice in England at that date:
Provided that the said common law, doctrines of equity and statutes of general application shall apply so far only as the circumstances of Kenya and its inhabitants permit and subject to such qualifications as those circumstances may render necessary.”
EMPLOYEE RIGHTS AND OBLIGATIONS
To obey reasonable orders. An employee is under Kenya law required to obey lawful and reasonable orders from his employer. Failure to do so is a ground for dismissal. In Konig v Kanjee Naranjee Properties Limited [1968] EA 233, Law JA noted that, ‘a master is entitled to dismiss his servant summarily for willful disobedience of his master’s lawful and reasonable orders, which is his duty to obey.’
In Karimi v KCB & Another, (2005) eKLR, the plaintiff declined to take up a transfer ordered by his employer and was dismissed. Kasango J held that this was a clear disobedience of his master’s lawful and reasonable orders and action taken by the employer to terminate the contract was appropriate. See also Njeru v Agip (K) Ltd [1986] KLR 480 where a failure to obey lawful instructions on how to work was held appropriate ground for dismissal
Where obedience of that lawful and reasonable order places the employee at grave risk to his person, dismissal for such a failure to obey would be inappropriate, see Ottoman Bank v Chakarian [1930] AC 277
RIGHTS AND OBLIGATIONS IN CONTRACTS OF EMPLOYMENT
Employees under Kenya law enjoy implied and statutory rights and owe implied and statutory obligations to their employers
Employers likewise have implied and statutory rights and owe obligations to employees
Employees rights are the employer’s obligations and vice versa
Duty of Obedience
In Pepper v Webb [1969] 1 WLR 514, a gardener used some expletives with words indicating lack of intention to obey the employer’s instructions. The refusal was held to be a breach of contract.
Obedience is required only for a lawful order; if it is not lawful, he need not obey it.
Orders that are reasonable have to be obeyed. Unreasonable orders need not be obeyed. To determine the reasonability of an order, principles of good human relations may be taken into account.
Duty of Care and Competence
To exercise reasonable care and competence in performance of his duties. Failure to exercise care and competence may lead to dismissal under Kenya law for incompetence.
“ When a skilled laborer, artisan or artist is employed, there is, on his part, an implied warranty that he is of skill reasonably competent to the task he undertakes, - spondes peritiam artis. Thus if an apothecary, a watch-maker, or an attorney be employed for reward, theye ach impliedly undertake to possess and exercise reasonable skill in theier several arts,” See Harmer v Cornelius (1858) 5 CBNS 236 at 246
It is an implied term of the contract of employment that an employee will exercise skill and care in the performance of his duties, and a breach of that term entitles the employer to claim damages in respect of the negligent performance of the work.
In Lister v Romford Ice [1957] AC 555 an employee of a company negligently injured a fellow employee in the course of their work. The injured employee sued the company and was awarded damages. The company’s insurers sued the employee under the right of subrogation in the company name. The court held that there was a breach of this duty and the company was entitled to indemnification from the employee for breach of this contractual duty
Duty of Trust and Confidence
An employment relationship is based on trust and confidence. An employee is required not to act in a way to destroy the trust and confidence inherent in the relationship
Thus, an employee must not disclose confidential information about the employer’s business to an unauthorised person.
STATUTORY REQUIREMENTS OF A CONTRACT OF EMPLOYMENT
All contracts of service must satisfy the requirements of the Employment Act, 2007. They must be written.
S. 9(1)(a) of the Employment Act requires that a contract of service for a period or a number of working days which amount in the aggregate to the equivalent of three months or more; or (b) which provides for the performance of any specified work which could not reasonably be to be completed within a period or a number of working days amounting in the aggregate to the equivalent of three months shall be in writing.
The employer is responsible to ensure that the contract is written, and contains the particulars of employment and ensure that the employee consents in the manner provided under the Act.
Written contract must contain (s.10) particulars of employment to be given within 2 months of service
Particulars required under Kenya law are:
• The name, age, permanent address and sex of the employee
• The name of the employer
• Job description of the employment
• The date of commencement
• The form and duration of the contract
• The place of work
• The hours of work
• The remuneration and details of other benefits
• Intervals of payment of remuneration
• Date on which the employee’s period of continuous employment began
Others required are:
• Any terms of conditions on leave, incapacity to work and pension and pension schemes
• Length of notice for termination
• The period of employment
• Details on place of work
• Any collective agreements which directly affect the terms and conditions of employment
Employer is required to keep records on particulars for 5 years after termination
Under s. 12, statement on the disciplinary rules applicable to the employee required, and must specify the person whom employee may apply incase of dissatisfaction in decision of the disciplinary body or any grievance
ESSENTIALS OF A CONTRACT OF EMPLOYMENT
Statute envisages oral or written, express or implied contracts of service, see s. 2 of the Employment Act
Essentially it is a contract, governed by the general rules of contract under common law, hence subject to ordinary rules of construction for contracts.
Law of contract however may be inappropriate for employment cases. Contracts are normally a single transaction documents – limited to a specific transaction. Employment cases concern a continued relationship for a long period of time with elements of trust and confidence.
Employment contracts thus are formed in the same manner as ordinary contracts.
Like other contracts under Kenya law, there must be an offer and an acceptance. The offer and acceptance may be subject to conditions
Wishart v National Association of Citizens’ Advice Bureaux Ltd, [1990] IRLR 393, claimant offered a job ‘subject to receipt of satisfatory references.’ References received were not satisfactory hence the offer was withdrawn. It was held that this was a conditional offer of employment and the defendants had an obligation to consider the references in good faith. The question of being ‘satisfactory’ was subjective.
There must be an intention to create legal relations, consideration and absence of vitiating elements e.g. mistake, illegality, misrepresentation.
If the terms of the contract are designed to avoid payment of income tax, the contract is illegal. See Mohammed Ghias Quereshi & Another Versus Paramount Bank Limited High Court Civil Suit No. 1557 of 1997 (Nairobi)
EXPRESS TERMS OF A CONTRACT OF EMPLOYMENT
Express terms are contained in the contract of employment entered into by the parties. These may include wages, salaries, commissions, bonuses, hours of work, nature of the duties, holidays, overtime, sick pay, pension schemes, insurance etc.
Variation – of the express terms of contract of employment require mutual consent. Express terms, like express terms of a contract cannot be unilaterally varied
Promotion to another level without change of any express terms of the contract does not mean a revision of the express terms of the contract of employment, See Chase v Barclays Bank [1990] KLR 595
Express terms are found in the individual contract of employment, statute and a collective bargaining agreement applicable to the employee. S. 28(1) sets out the minimum time allowable for annual leave in any contract of employment at not less than 21 working days; 29(1) sets maternity leave at 3 months, etc.
Breach of a contractual term may result in dismissal – s. 44 (3) empowers the employer to dismiss an employee “summarily when the employee has by his conduct indicated that he has fundamentally breached his obligations arising under the contract of service.” Fundamental breach is a factual assessment, with recourse to a Labour Officer allowed under s. 47(1) for complaint within 3 months
CONTRACT OF SERVICE
There must be a contract, either express or implied.
Why do we need a definition? Tort law doctrine of respondeat superior holds employer liable for the torts of an employee; while taxation statutes require employers to deduct certain taxes from wages/salaries to employees
Various tests formulated to establish existence of a contract of service under Kenya law
Control test
To what extent is a person under the direction and control of the other person with regard to the manner in which the work is done?
Formulated in Performing Right Society, Limited v. Mitchell and Booker (Palais de Danse), Limited [1924] 1 KB 762, where McCardie J opined at p.767 that, “It seems, however, reasonably clear that the final test, if there be a final test, and certainly the test to be generally applied, lies in the nature and degree of detailed control over the person alleged to be a servant .”
Ready Mix Concrete vs Minister of Pensions [1968] 2 QB 497, ‘control includes the power of deciding the thing to be done, the means to be employed in doing it, the time when and the place where it shall be done’ at 515.
Works best in contemporary employment situations.
E.g. CPC Industrial Products (K) Limited versus Samuel Kirwa Kosgei High Court Civil Appeal 7 of 2003 (Eldoret) “the place of work was the premises of the appellant; the work was assigned by an employee of the appellant, Mr. Wendo; and the supervision of the work was also done by the same employee of the appellant.”
See the definition of an employee under the Income Tax Act, Cap 470 – “… employer has the power of selection and dismissal of the employee, pays his wages or salary and exercises general or specific control”
Issues – what about professionals? Doctors, lawyers etc?
Integration Test
Formulated due to the pitfalls in the control test where the employee possesses skill that the employer does not have.
Stevenson, Jordan and Harrison Ltd v MacDonald and Evans [1952] 1 TLR 101 “Under a contract of service, a man is employed as part of the business and his work is done as an integral part of the business.” Denning L.J.
Useful for those instances of specialised employees e.g. doctors and nurses in hospitals where control test is inappropriate, e.g. in Cassidy v Ministry of Health (1951) 2KB 598, a resident surgeon in a hospital was held to be an employee, so that the hospital was liable for his negligence.
Multi Factor Test
No single factor is dispositive in defining employment status of a person
As the needs and practices at the workplace change, so too must the tests to be used in defining employment status.
Ready Mix Concrete (South East) Ltd v Minister of Pensions and National Insurance laid out three conditions necessary for a contract of service to exist.
• Provision of own work and skill in a performance of service for an employer
• Element of control exercisable by the employer
• Other terms of the contract are not inconsistent with the existence of a contract of employment
Multi Factor Test
1. The power of selection, the payment of wages, income tax, holidays and leave, power to suspend and dismiss
2. Mutuality of obligation and control and an irreducible level of personal service.
3. Factors such as
• Contractual provisions
• Degree of control exercised by the employer
• Obligation of the employer to provide work
• Obligation of the employee to do the work
• The duty of personal service
• Provision of tools, equipment, instruments
• Taxation arrangements
• Opportunity to work for other employers
• Welfare provisions
• Degree of financial risk assumed etc
Economic Reality or Entrepreneural Test
Analysis from a self-employed perspective – Is he in a business of his own?
Who bears the risk – the economic risk of being in business
Market Investigations vs Minister of Social Security [1969] 2 QB 173 – A company employed women on a part time basis to do market research. They could work as they chose, but according to a set pattern. Held to be employees
All relevant factors must be considered, none of the factors used are dispositive
