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Court of AppealDismissedCivil Appeal (Kisumu)· [2016] KECA 510 (KLR)

Abyssinia Iron & Steel Limited v Kenya Engineering Workers Union & 1 other

Court of Appeal of Kenya
31 May 2016
DMD. K. MusingaSKS. Gatembu KairuAMA. K. Murgor
3,157 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed that outsourcing cannot block workers' right to join a union, and ordered Abyssinia Iron and Steel to sign a recognition agreement.

What this practically means

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Executive summary

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Abyssinia Iron and Steel Limited appealed against an Industrial Court decision by Wasilwa, J., which found that it had falsely used outsourcing to Jokali Handling Services Limited to circumvent union recognition and ordered it to negotiate a recognition agreement with the Kenya Engineering Workers Union. The Court of Appeal framed three issues: whether outsourcing vitiates the constitutional right to join a union; whether outsourcing was proved; and whether a simple majority was attained under section 54 of the Labour Relations Act. The Court held that every worker, including outsourced workers, enjoys the Article 41(2)(c) right to join a trade union, limited only by Article 24, and that outsourcing is a lawful business strategy where carried out in accordance with fair labour practices. Re-evaluating the evidence as a first appellate court, the Court found that discharge vouchers and Jokali employment contracts established that some employees were effectively and legally outsourced to Jokali, and that it was Jokali, not Abyssinia, obliged to recognise the Union in respect of those employees; it distinguished Cable & Wireless Plc v P. Muscat. However, the conciliator's poll, adopted by the parties, showed 371 employees remained with Abyssinia, of whom 261 voted to join the Union, exceeding the 51% simple-majority threshold. The Court therefore affirmed the trial judge's conclusion that Abyssinia was liable to sign a recognition agreement in respect of its own employees. The appeal was dismissed, with an order that Abyssinia execute a recognition agreement for 261 employees within 30 days, and costs awarded to the respondents.

Key legal issues

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01

Whether outsourcing vitiates an employee's constitutional right to join a trade union

Holding

No. Outsourcing does not deprive an employee of the Article 41(2)(c) right to form or join a trade union, subject only to limitations under Article 24.

Reasoning

Article 41(2)(c) guarantees every worker the right to form and join a trade union. The Court held this right extends even to outsourced workers and may only be limited under Article 24. Section 54 of the Labour Relations Act obliges an employer to recognise a union representing a simple majority of unionisable employees. Outsourcing is a lawful business strategy, but it cannot be used to defeat constitutional rights of association.

p. 4
02

Whether Abyssinia proved that its employees were outsourced to Jokali

Holding

Partly. The Court found that some employees were effectively and legally outsourced to Jokali, contrary to the Industrial Court's finding that no employees were outsourced.

Reasoning

The Court re-evaluated the discharge vouchers and the Jokali employment contracts. The discharges, terminal dues and new contracts with Jokali (which took on remuneration, NSSF, NHIF and supervision responsibilities) created a different employer/employee relationship. The evidence was uncontroverted. However, the conciliator's agreed poll showed 371 employees remained with Abyssinia, so not all employees were outsourced.

p. 5
03

Whether a simple majority was attained to entitle the Union to a recognition agreement

Holding

Yes. The agreed poll showed 371 employees at Abyssinia, of whom 261 voted to join the Union, exceeding the 51% threshold.

Reasoning

Section 54 of the Labour Relations Act requires a simple majority (51%) of unionisable employees for recognition. The conciliator's poll, signed and adopted by the parties, established 371 employees at Abyssinia. 51% translated to 190 employees; 261 voted to join, exceeding the threshold. Recognition was therefore owed by Abyssinia in respect of its remaining employees.

p. 6

Legal principles established

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  • Every worker, including outsourced workers, has a constitutional right to join a trade union, save for limitations under Article 24 of the Constitution
  • An employer is obliged to recognise a union where it represents a simple majority of the unionisable employees
  • Outsourcing of employees is lawful provided it accords with fair labour practices and is not aimed at rendering an employee redundant
  • Where employees are validly discharged by the old employer and enter into valid contracts with a new employer, it is the new employer, not the old one, that owes the duty to recognise a union in respect of those employees

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Abyssinia to enter into a Recognition Agreement with the Union in respect of 261 employees within 30 days from the date of the judgment
  3. 3.The respondents shall have the cost of this appeal
On appeal from
Industrial Court (Employment and Labour Relations Court)
Jurisdiction invoked
First appellate jurisdiction under the Employment Act/Labour Relations Act framework; no specific constitutional or statutory provision is cited in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Abyssinia Iron & Steel Limited v Kenya Engineering Workers Union & 1 other", Case Analysis (2016). Civil Appeal (Kisumu). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/510/eng@2016-05-31

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