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ELRCPartially AllowedNot stated in judgment (ELRC cause; partial settlement recorded after mediation)· [2025] KEELRC 570 (KLR)

Waweru v Healthlink Matcare Limited t/a Nairobi Women’s Hospital (Cause E942 of 2022) [2025] KEELRC 570 (KLR)

Employment and Labour Relations Court
27 February 2025
2,327 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that consultancy deals offered during an employment exit are commercial contracts, not employment disputes, so it cannot hear breach claims against them.

What this practically means

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Executive summary

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The Claimant sued the Respondent alleging that it duped him into signing a mutual separation agreement by promising consultancy agreements for recovering an outstanding NHIF debt and managing the Respondent's pending court cases, which promises were never formalised. After partial settlement in mediation (Ksh. 95,455.20 tax refund on his medical cover), the Respondent brought a notice challenging the court's jurisdiction over the claims premised on breach of the consultancy agreements (prayers a, c, d, e and f), contending they are purely commercial disputes outside the ELRC's jurisdiction under article 162(2) of the Constitution and section 12 of the Employment and Labour Relations Act. The Claimant maintained the agreements were part of his exit package and intertwined with the employment relationship. The court, Manani J, applied the Lillian S principle that jurisdiction is everything and is conferred only by the Constitution or statute. It held that although the consultancy agreements sprung from the mutual separation agreement, they were standalone commercial contracts creating a new and distinct legal relationship separate from the terminated employment, and hence the ELRC has no jurisdiction to adjudicate their breach. However, the court affirmed jurisdiction to examine whether breach of the separation agreement amounted to unfair termination and to grant reliefs under section 49 of the Employment Act. The Claimant's cited authorities were distinguished as not anchored on new contracts. The court struck out prayers a, c, d, e and f, retained prayers g and h for trial, and ordered costs of the application to abide the outcome of the suit. Judgment delivered online on 27th February 2025.

Key legal issues

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01

Whether disputes arising from consultancy agreements entered into as part of an exit package fall within the ELRC's jurisdiction

Holding

They do not; the consultancy agreements were standalone commercial contracts creating a new and distinct legal relationship separate from the previous employment relation

Reasoning

The court held that although the consultancy agreements sprung from the mutual separation agreement that closed the employment relationship, they were capable of independent enforcement and created a new, distinct commercial relationship. Section 12 of the Employment and Labour Relations Act confines the court to disputes arising from employment and labour relations. The Claimant's own pleadings acknowledged the contracts came into existence, so the dispute is purely commercial and outside article 162(2) and section 12.

p. 4
02

Whether the court retains jurisdiction over the separation agreement itself

Holding

Yes, to determine whether termination was fair and whether reliefs under section 49 of the Employment Act are due, but not to award damages for breach of the consultancy agreements

Reasoning

The court affirmed it could examine whether the Respondent breached the separation agreement by failing to give life to the consultancy agreements, but only for the purpose of determining the fairness of the termination and consequential statutory reliefs, not to grant damages for breach of the consultancy agreements themselves, which would be a commercial matter beyond its jurisdiction.

p. 5
03

Distinguishing the authorities relied on by the Claimant

Holding

The cases cited by the Claimant were distinguishable because the benefits sought there were not anchored on new contracts

Reasoning

In Magoha and Kihara v Chase Bank, claimants sought to enforce benefits under exit agreements from employment where the benefits were not anchored on new contracts. In the instant case the exit benefits were premised on new and distinct consultancy agreements yielding a new relationship, so those precedents did not assist the Claimant.

p. 5

Legal principles established

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  • Consultancy agreements do not yield an employment relationship; they are purely commercial contracts outside the ELRC's jurisdiction even where they spring from a mutual separation agreement
  • Jurisdiction is conferred by the Constitution or statute and cannot be conferred by judicial craft or innovation
  • The ELRC retains jurisdiction to examine whether breach of a separation agreement amounted to unfair termination and to award reliefs under section 49 of the Employment Act

Court orders

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  1. 1.Prayers a), c), d), e) and f) in the Statement of Claim are struck out for want of jurisdiction
  2. 2.The court will adjudicate on prayers g) and h) in the Statement of Claim, prayer b) having been settled through mediation
  3. 3.Costs of the application to abide the outcome of the suit
Jurisdiction invoked
Article 162(2) of the Constitution of Kenya 2010 as read with section 4 and section 12 of the Employment and Labour Relations Act

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, "Waweru v Healthlink Matcare Limited t/a Nairobi Women’s Hospital (Cause E942 of 2022) [2025] KEELRC 570 (KLR)", Case Analysis (2025). Not stated in judgment (ELRC cause; partial settlement recorded after mediation). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/570/eng@2025-02-27

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