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ELRCPartially AllowedCause (not specified in judgment)· [2015] KEELRC 89 (KLR)

William Nyangaya Mabera v Khetia Drapers Limited [2015] KEELRC 89 (KLR)

Employment and Labour Relations Court
18 December 2015
516 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, William Nyangaya Mabera, sued Khetia Drapers Ltd on 2 July 2015 alleging unlawful termination of employment. Rather than filing a Response, the Respondent filed a motion on 20 July 2015 seeking a stay of proceedings and referral of the dispute to arbitration, relying on clause 19 of the Memorandum and Employment Contract, which provided for disputes to be referred in preferred order to the Manager, Senior Management or District Labour Office, and failing resolution, to an agreed arbitrator or, in default, the Chairman of the Chartered Institute of Arbitrators (Kenya Branch). The Claimant filed grounds of opposition. The court, Radido J, held that the terms and scope of the clause left no doubt that disputes concerning termination of the Claimant's employment were included in disputes to be referred to arbitration, and found merit in the motion to stay proceedings pending arbitration. However, because the dispute concerned an alleged unlawful act by the Respondent, the court considered it unfair for the Respondent's own managers to resolve it, requiring an independent and neutral person. Noting that default arbitration by the Chartered Institute could attract expenses, the court directed that the parties submit to the County Labour Officer, Kitale, for arbitration. Prayers 2 and 3 of the motion were granted with that rider; the stay was to be in force for 90 days, with the arbitrator's report to be filed before expiry and the cause mentioned on 18 March 2016. Costs of the motion were reserved to the cause.

Key legal issues

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01

Whether the contractual arbitration clause covered disputes over termination of employment

Holding

The court held that the arbitration clause in the Memorandum and Employment Contract encompassed disputes concerning termination of the Claimant's employment.

Reasoning

The relationship between the parties was reduced to writing, with an appointment letter and a Memorandum and Employment Contract. Clause 19 required disputes between the company and the employee to be referred, in preferred order, to the Manager, Senior Management or District Labour Office, and failing resolution, to an agreed arbitrator or, in default, the Chairman of the Chartered Institute of Arbitrators (Kenya Branch). On the terms and scope of that clause, the court was satisfied that termination disputes were captured.

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02

Whether a stay of proceedings pending arbitration should be granted and before whom arbitration should proceed

Holding

A stay was granted, but with a rider that arbitration be conducted by the County Labour Officer, Kitale, rather than internal management or the default Chartered Institute option.

Reasoning

The court found merit in the motion to stay proceedings pending arbitration. However, because the claim alleged an unlawful act by the Respondent, it would be unfair for the Respondent's own Managers to resolve it; an independent and neutral person should. Since default arbitration by the Chairman of the Chartered Institute of Arbitrators could attract expenses, the County Labour Officer (formerly the District Labour Officer) was identified as the office able to arbitrate without direct expense to the parties in the first instance. The stay was limited to 90 days with a report to be filed.

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Legal principles established

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  • Where an employment contract contains an arbitration clause, disputes concerning termination of employment are within the scope of the clause and warrant a stay of court proceedings pending arbitration.

Court orders

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  1. 1.Stay of further proceedings in the cause pending arbitration
  2. 2.Dispute referred to arbitration by the County Labour Officer, Kitale
  3. 3.Stay of proceedings to be in force for 90 days to enable the County Labour Officer to arbitrate and file a report with the Court before expiry of the 90 days
  4. 4.Cause to be mentioned on 18 March 2016 to confirm the results of the arbitration
  5. 5.Costs of the motion to be in the cause
Jurisdiction invoked
Jurisdiction over the employment cause and stay/referral to arbitration under the parties' arbitration clause (arbitration agreement in the Memorandum and Employment Contract); no specific provision quoted.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "William Nyangaya Mabera v Khetia Drapers Limited [2015] KEELRC 89 (KLR)", Case Analysis (2015). Cause (not specified in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/89/eng@2015-12-18

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.