ELRC verdict win for employees
Most employment disputes in Kenya concern unfair termination of employment, in which instance the employer bears the burden of proving the fairness of the termination.
Employment and Labour Relations Court (ELRC) Judge Jacob Gakeri recently ruled that mandatory arbitration clauses in employment contracts are unenforceable. Such clauses prevent an aggrieved party from filing a lawsuit in court, compelling them to instead have the dispute handled by an arbitrator, whose decision is usually final. Why is this verdict a win for employees?
Employers typically impose mandatory arbitration clauses on employees in a take-it-or-leave-it fashion: unless the prospective employee signs the contract, (s)he will not get the job. The employee is also given little time to consider the contractual terms, which are obfuscated by legal jargon.
The arbitral process favours the employer, as it offers confidentiality which benefits their corporate image. On the other hand, this dispute resolution mechanism is detrimental to individual employees due to its high cost.
Contract law
Also, most employment disputes in Kenya concern unfair termination of employment, in which instance the employer bears the burden of proving the fairness of the termination. The simplified rules of evidence in arbitration enable the employer to adduce evidence that would be unacceptable in Court. This could result in an unjust outcome.
As a cardinal principle of contract law, an agreement may be nullified if its terms so unreasonably favour the stronger party to the point of being oppressive. Given the unequal bargaining power between employers and employees, Justice Gakeri’s decision must be lauded for promoting the right to fair labour practices, which is enshrined in Article 41 of the Constitution.
Newton Arori, (Advocate of the High Court of Kenya)[email protected]
