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Essential Elements of an Employer/Employee Relationship 


At the heart of every workplace lies the intricate bond between an employer and an employee. This relationship forms the cornerstone of organizational dynamics, shaping the culture, productivity, and overall success of any given organization. Central to this dynamic relationship is the question of what determines the existence and legitimacy of an employer/employee relationship. To answer the above question, it is imperative to consider the definitions of what constitutes the make-up of both an employer and an employee. 


According to Kenyan law, an employee refers to an individual who is employed for wages or salary and includes an apprentice or indentured learner. More elaborately, an employee is anyone who comes into the employ of another either under an express or implied contract under which the employer has a right to control the details of work performance. On the other hand, an employer is described to be individual, body or institution that enters into a contract of service to employ an individual.  Such union is formalized through either written or oral contracts. Under such contract, the employee undertakes for a limited time or indeterminate period of time to do work for remuneration according to the instructions and under the direction or control of another person, the employer. 

Contract of Service vis-à-vis Contract for Service

Use of the term contract of service is an essential ingredient in the definition of an employer. Borrowing from the provisions of the Employment Act of 2007, a contract of service, refers to agreement, whether oral or written and whether expressed or implied, to employ or to serve as an employee for a period of time and includes a contract of apprenticeship and indentured learner. 

On the other hand, a contract for service can be said to be a contract by which a person, contractor or service provider makes a commitment to another person, the client, to carry out material or intellectual work or to provide a service for a price or fee. Its characteristic being that the contractor is free to choose the means of performing the contract and no relationship of subordination exists between the contractor or the provider of service and the client in respect of such performance. 

Employer-Employee Relationship

For the positive determination of the existence of an employer-employee relationship, the following elements should be present: 

  1. Selection and engagement of the employee i.e hire after either a restricted or open interview process. 
  2. Proof of payment of wages. 
  3. Power of dismissal. 
  4. Power to control employees conduct at the workplace. 
  5. In a number of cited authorities, several tests have been applied to further establish how an employment relationship can be determined between the relevant parties.  

These include: 

  1. Control test – this test as provided by common law dictates that an employer has the right to tell an employee what to do in terms of their job description, when to do their job, how and where the same should be done.  
  2. Integration test – in assessing whether or not persons are employees, this test takes into account the extent to which an individual (employee) is integrated into the business of the employer. Under any form of employment, an individual is an employee if they are considered to be part of the business and any work that is undertaken by the said employee would be integral to the business. 
  3. Test of economic/business reality – this test considers whether an employee is economically dependent on the business to which they render services or is as a matter of economic reality in business for themselves. 
  4. Mutuality of obligationsthis test prescribes that parties make commitments to maintain the employment relationship over a period of time. Further the following the employment relationship would entail; service in return for wages, and secondly, mutual promises for future performance. This form of arrangement creates a sense of stability between the parties.  

From the above analysis, the determination of the existence of an employer-employee relationship is primarily guided by the degree of control exercised over an employee, whether one was integrated into the enterprise, any obligation to only work for the employer and mutuality of obligations.  

It is important to note that the tests are not to be seen exclusively by themselves as they only serve to act as a guide on a case-by-case basis. 

For more information and queries regarding employment and labour relations, please visit our website or reach out to us through info@netsheria.com to get assistance from our specialized advocates. 

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