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ELRCOtherNot stated in judgment· [2024] KEELRC 1025 (KLR)

Ahoya v Kavle t/a Kavle Consulting LLC & another (Cause E617 of 2023) [2024] KEELRC 1025 (KLR)

Employment and Labour Relations Court
16 April 2024
NMNzioki Wa Makau
1,996 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that a consultant with a service contract must use the agreed arbitration clause, not sue as an employee.

What this practically means

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Executive summary

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The 1st and 2nd Respondents/Applicants filed a Notice of Preliminary Objection dated 22nd August 2023 contending that the ELRC lacked jurisdiction owing to ouster provisions in clauses 15 and 16 of a Subcontract Agreement with the Claimant, and invoking exhaustion of dispute resolution mechanisms and abuse of court process. The Claimant/Respondent opposed, asserting the contract was performed in Kenya, that the Employment Act applied, and that the arbitration clause offended sections 3(1) and 87 of the Employment Act, section 26's overriding provisions, and her right of access to justice, and that she could not afford arbitration. The Respondents submitted that jurisdiction is everything, that the Court's jurisdiction under section 12(1) of the ELRC Act covers only contracts of service, that the Claimant was a subcontractor engaged under a contract for service, and relying on Wringles Company (East Africa) v Attorney General and section 6 of the Arbitration Act, sought a stay and reference to arbitration. The Claimant relied on Dorcas Kemunto Wainaina v IPAS on choice of law and Jane Muthoni Mukuna v Fsi Capital Limited on the arbitration clause operating only during the contract's subsistence. The Court held that the exhibited contract was for consulting services, hence a contract for service outside the purview of the Employment Act and the Court. Finding the ouster clause applicable, it stayed the proceedings under section 6 of the Arbitration Act pending reference to arbitration under clauses 16 and 17, with no order as to costs.

Key legal issues

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01

Jurisdiction of the ELRC over the engagement

Holding

The Claimant's engagement as a senior health consultant/advisor was a contract for service, not a contract of service, and thus outside the purview of the Employment Act and the Court

Reasoning

The court applied the Employment Act definitions of 'contract of service' and 'contract for service'. Because the exhibited contract provided for consulting services, it fell within the latter category, removing the matter from the ELRC's jurisdiction under section 12(1) of the ELRC Act.

p. 4
02

Effect of the arbitration/ouster clause

Holding

Clauses 16 and 17 of the Subcontract Agreement required the dispute to be referred to arbitration and the court stayed the proceedings under section 6 of the Arbitration Act

Reasoning

Having found the relationship contractual rather than employment-based, the court held the parties bound by their agreed dispute resolution mechanism. Section 6 mandates a stay where proceedings are brought in breach of an arbitration agreement, and the ouster clause limits the court's role.

p. 4

Legal principles established

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  • Where parties have agreed to binding arbitration, an ouster clause is binding and the court must stay proceedings pending reference to arbitration under section 6 of the Arbitration Act

Court orders

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  1. 1.Finding that the ouster/arbitration clause in the Subcontract Agreement is applicable
  2. 2.Stay of proceedings in terms of section 6 of the Arbitration Act pending a reference to arbitration
  3. 3.No order as to costs

Authorities

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Legislation

  • Employment Act, Cap 226sections 2, 3(1), 26, 83, 84, 87
  • Employment and Labour Relations Court Act, Cap 234Bsection 12(1)
  • Arbitration Actsection 6
  • Constitution of Kenya, 2010Chapter 4

Cases cited (3)

  • Wringles Company (East Africa) v Attorney General & 3 others
    [2013] eKLR
  • Dorcas Kemunto Wainaina v IPAS
    [2018] eKLR
  • Jane Muthoni Mukuna v Fsi Capital Limited
    [2015] eKLR
Jurisdiction invoked
Section 12(1) of the Employment and Labour Relations Court Act, Cap 234B

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, "Ahoya v Kavle t/a Kavle Consulting LLC & another (Cause E617 of 2023) [2024] KEELRC 1025 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1025/eng@2024-04-16

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