Okeyo v Board of Directors HHI Management Service Ltd & another (Cause E970 of 2023) [2024] KEELRC 1006 (KLR)
The bottom line
#Kenya's Employment Court ruled that an arbitration clause in an employment contract cannot force an employee out of court and into arbitration.
What this practically means
#Executive summary
#Key legal issues
#Whether an arbitration clause in an employment contract mandates a stay of proceedings under section 6(1) of the Arbitration Act
No. The court declined to stay the employment claim and refer it to arbitration, holding the Arbitration Act was principally intended for commercial disputes and that the ELRC's exclusive jurisdiction under article 162(2)(a) and section 12 of the ELRC Act is not ousted by an arbitral clause.
The court traced its exclusive jurisdiction to article 162(2)(a) of the Constitution and section 12 of the ELRC Act. It noted section 15 of the ELRC Act, which governs referral to ADR, is silent on arbitration - a deliberate legislative omission. It relied on the Supreme Court's guidance in Synergy Industrial Credit v Cape Holdings and Maureen Onyango J's decision in the AMREF case. It found arbitral clauses are imposed on employees due to unequal bargaining power, and that arbitration is not more favourable to the employee than litigation under the Employment Act, whose minimum conditions apply via section 26.
Effect of section 6(3) of the Arbitration Act where a stay is declined
Where the court declines a stay, any provision making an arbitral award a condition precedent to litigation is of no effect in those proceedings.
The court observed that although section 6(1) is couched in mandatory tone, section 6(3) addresses instances where a stay is not granted, neutralising condition-precedent clauses in the arbitration agreement. This reinforced the court's power to proceed with the employment claim notwithstanding clause 6.2 of the contract.
Legal principles established
#- The ELRC retains exclusive original jurisdiction over employment disputes notwithstanding an arbitration clause in the employment contract
- Section 15(1) of the ELRC Act deliberately omits arbitration as an ADR mechanism, so referral to arbitration requires consent of both parties
- Arbitral clauses in employment contracts are atypical and reflect unequal bargaining power between employer and employee
Court orders
#- 1.The 2nd respondent's chamber summons dated November 27, 2023 is dismissed
- 2.No orders as to costs
- Jurisdiction invoked
- Article 162(2)(a) of the Constitution of Kenya, 2010 read with section 12 of the Employment and Labour Relations Court Act, 2011
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kalaine v Mobile Consultations Africa Limited t/a Tibu Health (Cause E449 of 2023) [2025] KEELRC 1640 (KLR)[2025] KEELRC 1640 (KLR)30 May 2025followed
Cite this brief
#Cite this brief
Caselaw, "Okeyo v Board of Directors HHI Management Service Ltd & another (Cause E970 of 2023) [2024] KEELRC 1006 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1006/eng@2024-05-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.