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ELRCOtherPetition and Notice of Motion filed 20th November 2018 (ELRC Nakuru)· [2019] KEELRC 1777 (KLR)

Halima Gababa Abdulahi v Lee Kinyanjui & another [2019] KEELRC 1777 (KLR)

Employment and Labour Relations Court
31 January 2019
2,592 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court refused to send an unfair dismissal case to arbitration because the contract's arbitration clause was unclear and the worker raised constitutional rights claims.

What this practically means

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Executive summary

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The petitioner, formerly employed by the 2nd respondent, was terminated by letter dated 1st November 2018 on grounds of gross misconduct following a notice to show cause and suspension. She filed a petition and a Notice of Motion on 20th November 2018 seeking conservatory orders suspending the termination decision, alleging violations of numerous constitutional articles including Articles 27, 28, 41, 47 and 50. The respondents filed a Chamber Summons under section 6 of the Arbitration Act seeking a stay of proceedings and reference of the dispute to arbitration, relying on clause 10 of the employment contract. The respondents argued that the parties had agreed to arbitrate employment disputes and cited authorities on the mandatory referral under section 6(1) of the Arbitration Act. The petitioner opposed, arguing there was no express mandatory arbitration provision and that the constitutional claims could only be determined by the court under Article 23. The court found that clause 10.0.2 of the contract cross-references a non-existent clause 9.0.1, rendering the arbitration agreement ambiguous, and that referral to arbitration requires the parties' consent. The court distinguished the respondents' authorities, held that constitutional questions cannot be arbitrated, and that referring a terminated employee's rights claims back to the shop floor would delay justice. Applying section 7 of the Arbitration Act, the court declined the respondents' application, ordered each party to bear own costs, and directed that the petition proceed to hearing on its merits.

Key legal issues

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01

Whether the arbitration clause in the employment contract mandates reference to arbitration

Holding

No. Clause 10.0.2 refers unresolved disputes to arbitration, but the clause it cross-references (9.0.1) does not exist, and clause 9 instead provides for interpretation under Kenyan law. The agreement is ambiguous and the parties have not clearly agreed to refer this dispute to arbitration.

Reasoning

The court examined clauses 9, 10.0.1 and 10.0.2 of the employment contract. Clause 10.0.2 refers disputes not resolved in '9.0.1' to arbitration, but clause 9.0.1 does not exist; clause 9 merely provides that the contract is construed under Kenyan law. Under section 6(1) of the Arbitration Act, the dispute must be the subject of an arbitration agreement. Because of this ambiguity, the matter cannot be removed from the court's jurisdiction.

p. 3
02

Whether constitutional claims of rights violations can be referred to arbitration

Holding

No. The petition is premised on alleged violations of the Bill of Rights, and under Article 23 of the Constitution only the court can grant redress for such violations.

Reasoning

The petitioner challenged the entire process leading to termination of employment and its outcome as unconstitutional. The court held such questions cannot be addressed by arbitration; the petition is premised on alleged violation of numerous constitutional articles and the interim relief sought is conservatory in nature, preserving the petitioner's position pending determination.

p. 1
03

Whether the ELRC retains jurisdiction notwithstanding the arbitration agreement

Holding

Yes. The court has original jurisdiction over employment and labour relations matters under Article 162(2) and section 12 of the ELRC Act, and under section 7 of the Arbitration Act it can issue interim orders regardless of an arbitration clause.

Reasoning

Relying on Samuel Kamau Macharia, the court noted jurisdiction flows from the Constitution or statute. The ELRC is conferred with jurisdiction over employment disputes. Section 15 of the ELRC Act allows referral to ADR but does not compel it, especially where termination has occurred and rights violations are alleged. Section 7 of the Arbitration Act empowers the court to issue interim protective measures regardless of the presence of an arbitration clause.

p. 4

Legal principles established

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  • Referral to arbitration requires consent of the parties; an arbitration agreement that is ambiguous or references a non-existent clause may be inoperative
  • Where employment has already terminated and the employee raises constitutional questions, referring the matter back to the shop floor or arbitration would only delay justice

Court orders

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  1. 1.The respondents' application dated 22nd November 2018 seeking stay of proceedings and reference to arbitration is declined
  2. 2.Each party shall bear their own costs
  3. 3.The respondents shall address the petition and the court shall hear the parties on their merits

Authorities

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Legislation

  • Arbitration Actsection 6(1)
  • Arbitration Actsection 7
  • Arbitration Actsection 10
  • Arbitration RulesRule 2
  • Employment and Labour Relations Court Actsection 12
  • Employment and Labour Relations Court Actsection 15
  • County Government Actsection 40(1)(c)
  • Constitution of Kenya, 2010Article 159
  • Constitution of Kenya, 2010Article 159(2)(c)
  • Constitution of Kenya, 2010Article 23
  • Constitution of Kenya, 2010Article 162(2)
  • Constitution of Kenya, 2010articles 2, 10, 19, 20, 27, 28, 41, 43, 47, 50, 165, 179, 183, 236 and 258 (as invoked by the petition)
  • Civil Procedure Rules, 2010Order 46 Rule 1

Cases cited (10)

  • Mt. Kenya University versus Step Up Holdings (K) Ltd
    [2013] eKLR
  • Adrec limited versus National Media Group Limited
    [2017] eKLR
  • Union Technology Kenya Ltd versus County Government of Nakuru
    [2017] eKLR
  • William Oluande versus American Life Insurance Company (K) Limited
    [2006] eKLR
  • Mjomba Agencies Limited versus Mvule Investment Company Ltd
    [2017] eKLR
  • Rose Wangui Mabo & others versus Limuru Country Club & others
    Petition No.160 of 2013, [2013] eKLR
  • Muslims for Human Rights versus Municipal Council of Mombasa & another
    Petition No.51 of 2011, [2018] eKLR
  • Samuel Kamau Macharia & another versus Kenya Commercial Bank & 2 others
    [2012] eKLR
  • Kenya Pipeline Company Limited versus Kenolkobil Limited
    [2013] eKLR
  • Martin Otieno Okwach & Charles Ongondo Were T/a Victoria Clearing Services versus Kenya Post Office Savings Bank
    [2014] eKLR
Jurisdiction invoked
Article 162(2) of the Constitution read together with section 12 of the Employment and Labour Relations Court Act, 2011

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, "Halima Gababa Abdulahi v Lee Kinyanjui & another [2019] KEELRC 1777 (KLR)", Case Analysis (2019). Petition and Notice of Motion filed 20th November 2018 (ELRC Nakuru). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1777/eng@2019-01-31

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