“If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck….”
The decision by Ndolo J, most recently in Adhiambo v Eidu Education Limited (Cause E582 of 2021)[2025] KEELRC is a timely reminder that in employment disputes, courts will look at the substance and reality of the relationship and not what parties have labelled it.
This particularly applies in today’s evolving workplaces, where the line between an employee and consultant is becoming increasingly blurred. Many “employers” often opt for consultancy agreements over employment contracts because consultancy agreements tend to have several benefits over employment contracts.
But before delving into the details of the case, what is the difference between the two?
Section 2 of the Employment Act defines an employee as “a person employed for wages or a salary and includes an apprentice and indentured learner”. However, the Act does not define who a consultant is. The Black’s Law Dictionary 2nd Edition, defines a consultant as “A professional that has expertise requested for a fee.”
These definitions do not outrightly carve out a specific difference, but courts have developed certain tests over time to determine the nature of the relationship. The tests include;
- Control test: Who decides how, when, and where the work is performed? Employers usually have control over how an employee
- Integration test: Is the worker part and parcel of the organisation, or an independent specialist brought in for a project? Employees are usually at the core of the business, working and using the tools and premises of the employer.
- Exclusivity: Does the worker have multiple clients? Consultants mostly have multiple clients while employees usually have only one employer.
- Payment & Taxation: Employees receive fixed monthly pay with statutory deductions. Consultants invoice for services and handle their own tax affairs.
Now back to our case;
Brief Facts
The Claimant was initially employed by the Respondent as a Product Manager, and soon thereafter, the Respondent changed the Employment contract into a consultancy agreement, but still retained the job description and title. She still worked 40 hours a week while still under the supervision of the Respondent. After working for some months, she received a termination letter from the Respondent informing her that her Consultancy Agreement had been terminated, leading to the filing of this claim for compensation of unlawful termination.
The Respondent’s case was that the Claimant was briefly employed as a Product Manager, but thereafter, had discussions with the Claimant on converting her employment into consultancy, which was accepted, effectively ending their employment relationship. The Respondent maintained that there was no employer-employee relationship but a consultancy agreement which should be governed by the law of contracts and not within the purview of the Employment Act.
The Court’s Holding
In determining the issues, the court first dissected the salient features of the Consultancy Contract between the two parties to know whether it qualified as an employment relationship despite the terminology. It cited the case of Everret Aviation Limited v Kenya Revenue Authority [2013] eKLR where Kimondo J stated the following:
“There are…various tests to be employed when there is doubt whether a person is an employee. One of those tests is whether the person’s duties are an integral part of the employer’s business…The greater the direct control of the employee by the employer, the stronger the ground for holding it to be contract of service…That test is however not conclusive… There is no single test for determining whether a person is an employee, the test that used to be considered sufficient, that is to say the control test, can no longer be considered sufficient, especially in the case of the employment of highly skilled individuals, and is now only one of the particular factors which may assist a court or tribunal in deciding the point. The question whether the person was integrated into the enterprise or remained apart from and independent of it has been suggested as an appropriate test, but is likewise only one of the relevant factors, for the modern approach is to balance all those factors in deciding on the overall classification of the individual. The factors relevant in a particular case may include, in addition to control and integration; the method of payment; any obligation to work only for that employer; stipulation as to hours; overtime, holidays etc; arrangements for payment of income tax and national insurance contribution; how the contract may be terminated; whether the individual may delegate work; who provides tools and equipment; and who, ultimately bears the risk of loss and the chance of profit. In some cases, the nature of the work itself may be an important consideration…”
Despite being labelled as a consultancy, the court was clear that such a relationship was an employer-employee relationship. The termination was therefore unlawful and procedural, and the Claimant was awarded remedies for unlawful termination.
Conclusion
The Adhiambo v Eidu Education Limited case is a timely reminder that when it comes to working relationships, what truly matters is the reality of the arrangement, not just what it’s called. Categorising someone as a “consultant” doesn’t automatically eliminate the responsibilities and protections that apply in an employment relationship.
For employers, this means it’s important to be clear and deliberate when engaging people for work. A well-structured agreement can protect your business from unexpected legal risks.
For consultants and professionals, it’s a reassurance that the law looks at the real nature of your work, and your rights don’t cease just because of how a contract is labelled.
At ESK Advocates LLP, we help businesses and individuals get this balance right. Whether you’re an employer looking to bring someone on board, or a consultant wanting to understand your rights, our team can guide you through drafting, reviewing, and managing contracts that reflect your intentions.
By Charles Chahilu, Associate Advocate
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