Ochieng v Abno Softwares International Ltd [2020] KEELRC 5 (KLR)
The bottom line
#The Employment Court in Nairobi ruled that an employer who waits too long to invoke an arbitration clause loses the right to delay an employee's case.
What this practically means
#Executive summary
#Key legal issues
#Whether the dispute should be referred to arbitration under clause 8 of the employment contract
No. The respondent did not apply for a stay at the time of entering appearance and instead filed a defence, the parties had not in fact agreed to refer the matter, and with employment terminated the court retains original jurisdiction over the claim.
Section 6(1) of the Arbitration Act requires an application for stay and referral not later than entry of appearance or other acknowledgment of the claim. The respondent had already taken procedural steps by filing a response/defence. Consent of parties is required for referral to arbitration. The claim concerned post-termination unfairness and breach of contract, and the court's jurisdiction under Article 162(2) and section 12 of the ELRC Act could not be ousted by clause 8 of the employment contract.
Whether the arbitration clause survives termination of employment
Even assuming the clause operated, referring a terminated-employment dispute involving unfairness and breach of contract back to the shop floor would not meet the ends of justice.
The court accepted that employment and labour relations matters are best resolved at the shop floor under section 15 of the ELRC Act, but held that once employment has ended and a claim of unfairness, breach of contract and unfair dealing is before the court, referral would only delay justice for the employee alleging violation of fundamental rights in employment.
Legal principles established
#- A court's jurisdiction flows from the Constitution or legislation and cannot be expanded by judicial craft; it goes to the heart of any proceedings
- Referral of a matter pending in court to arbitration must be by consent of the parties; Article 159 requires the court to promote, not compel, ADR
- Under section 6(1) of the Arbitration Act a stay and referral must be sought not later than the time of entering appearance or otherwise acknowledging the claim
- Where employment has terminated and there is a claim of unfair termination and breach of contract, referral back to the shop floor would delay justice and the court retains original jurisdiction
Court orders
#- 1.The application/objection dated 29th September 2020 is found without merit and is dismissed
- 2.The claim shall be heard on the merits
- 3.Costs to the claimant
- Jurisdiction invoked
- Article 162(2) of the Constitution read together with section 12 of the Employment and Labour Relations Court Act, 2011
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ochieng v Abno Softwares International Ltd [2020] KEELRC 5 (KLR)", Case Analysis (2020). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/5/eng@2020-12-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.