A landmark court ruling has shattered the assumptions of the gig economy, declaring that mobile money transfers alone do not prove an employment relationship.

In a precedent-setting judgment delivered in Kakamega, the Employment and Labour Relations Court has dismissed a Ksh2.3 million unfair dismissal claim, ruling that the mere existence of M-Pesa transaction logs is insufficient to establish a formal employer-employee contract. The ruling sends a shockwave through Kenya’s informal sector, where millions of "hustlers" rely on mobile money trails as their primary record of earnings and engagement.

The Burden of Proof

The case involved a claimant who sought compensation for unfair termination, presenting a series of M-Pesa messages as the sole evidence of their employment status. The court, however, found this evidence wanting. The judge noted that while mobile money statements prove a transfer of funds, they do not inherently prove the purpose of those funds. Without a written contract, letter of appointment, or other corroborating evidence like NSSF deductions, the payments could be interpreted as anything—from casual labor fees to personal gifts.

"Mobile money payments alone cannot prove employment," the judge declared. "The burden of proof lies with the claimant to demonstrate the nature of the relationship, the specific duties performed, and the control exercised by the alleged employer." This strict interpretation exposes the legal vulnerability of casual workers who operate on verbal agreements and digital cash.

• The Precedent: This ruling protects employers from malicious claims where casual financial interactions are retroactively framed as formal employment.
• The Risk: It leaves informal workers vulnerable, as their digital payment history may no longer guarantee legal protection in disputes.
• The Requirement: The court emphasized the necessity of formal documentation, such as contracts and statutory deductions, to solidify employment claims.

A Wake-Up Call for the Informal Sector

This judgment is a wake-up call for both employers and workers in the digital age. For employers, it underscores the importance of clearly defining the nature of payments to avoid ambiguity. For workers, it is a stark reminder that in the eyes of the law, a "Send Money" confirmation message is not a substitute for an employment contract.

Labor law experts warn that this could lead to a wave of dismissed cases in the Industrial Court, where many litigants rely on M-Pesa statements as their smoking gun. The ruling forces a re-evaluation of how labor rights are enforced in an economy that has largely gone cashless but remains stubbornly informal.

As the gig economy grows, the gap between digital practice and legal proof has just become a little wider, leaving many to wonder if their "job" is recognized by the law at all.