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ELRCAllowedCause No. 20 of 2000· [2003] KEELRC 26 (KLR)

KENYA BUILDING, CONSTRUCTION, TIMBER, FURNITURE & ALLIED INDUSTRIES EMPLOYEES’ UNION v HAYER BISHAN SINGH & SONS LTD [2003] KEELRC 26 (KLR)

Industrial Court of Kenya
6 March 2003
CCCharles P. ChemmuttutHGH.B.N. GicheruAKA.K. Kerich
2,425 words in judgment
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The bottom line

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Kenya's Industrial Court ordered an employer to recognise the workers' union, ruling that reorganising a business to dodge union obligations is an unfair labour practice.

What this practically means

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Executive summary

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The Union sought recognition from the Respondent company, a civil and structural engineering contractor incorporated on 23rd January 1992 out of the former firm Hayer Bishan Singh & Sons, with which the Union had previously had a valid recognition agreement. When the firm was incorporated during the pendency of Cause No.15 of 1992, the Court directed the Union to seek fresh recognition upon attaining a simple majority. The Union claimed it had recruited more than a simple majority of unionisable employees, faced no rival union, and was the appropriate union under Article 80 of the Constitution. The Company denied the majority, alleging 503 of 742 employees had opted for Habi Sacco Society Limited, and contended that incorporation created a new legal entity not bound by prior arrangements, and that the Union never furnished signed check-off forms. A trade dispute reported under Section 4 of the Trade Disputes Act was investigated by the Minister for Labour, who found the Union had recruited over 68% of the labour force, that employees had been coerced to renounce union membership, and recommended recognition with immediate effect. The Company refused to countersign a model recognition agreement, and the Minister referred the dispute to the Court under Section 8 of the Act. The Court held grounds (ii) and (iii) undisputed; on ground (i), it found the check-off objection raised for the first time in Court, and the incorporation a bad faith attempt to deny employees union representation, amounting to an unfair labour practice. Applying its earlier decision in Tailors & Textiles Workers' Union v. Bedi Investments Ltd., the Court upheld the Minister's recommendation and ordered formal recognition and signature of a recognition agreement within two months.

Key legal issues

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01

Whether the Union had attained a simple majority of unionisable employees entitling it to recognition

Holding

Yes - the Court found the Union had recruited more than 68% of the labour force and that the Company's conduct in procuring employees to sign anti-union documents and incorporating the firm was an unfair labour practice; recognition was awarded.

Reasoning

The only contested ground was whether the Union had a simple majority. The Minister's investigation found 503 out of 742 employees had been coerced into joining a Sacco and renouncing union membership, and that the Union had recruited over 68% of the labour force. The Court found the check-off point had never been raised during investigation, and that the incorporation of the firm into a limited company while Cause No.15 of 1992 was pending was done in bad faith to deny employees union representation.

p. 5
02

Whether the Company, as a new and distinct legal entity, could escape obligations of recognition

Holding

No - the Court held the incorporation was done in bad faith (mala fide) to defeat union representation and could not be relied upon to deny recognition.

Reasoning

The Company argued that incorporation created a new legal personality not bound by prior arrangements with the firm. The Court rejected this, finding the timing of incorporation - while the recognition dispute in Cause No.15 of 1992 was alive - demonstrated a cynical intent to terminate the union relationship and exploit the workers, amounting to an unfair labour practice and bad faith.

p. 4

Legal principles established

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  • The Industrial Court will condemn any systematic attempt by an employer to undermine or disrupt the trade union of his employees, as such conduct constitutes an unfair labour practice contrary to the policy of industrial peace and the Trade Disputes Act.
  • Incorporation of a firm into a limited liability company while a trade dispute is pending, for the purpose of defeating union representation, is a bad faith/unfair labour practice that will not defeat workers' rights to recognition.

Court orders

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  1. 1.The Minister's recommendation is upheld and the Company is to accord formal recognition to the Union
  2. 2.The parties must sign a recognition agreement within two (2) months from the date of the award

Authorities

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Legislation

  • Constitution of KenyaArticle 80
  • Trade Disputes Act, Cap. 234Section 4
  • Trade Disputes Act, Cap. 234Sections 5, 7, 8, 45, 46 and 49
  • Trade Disputes Act, Cap. 234Section 14(9)(e)

Cases cited (1)

  • Tailors & Textiles Workers' Union v. Bedi Investments Ltd.
    Cause No. 30 of 1991
Jurisdiction invoked
Section 8 of the Trade Disputes Act, Cap. 234 - reference of the dispute to the Court by the Minister for Labour, with statutory certificate of the Labour Commissioner under Section 14(9)(e) of the Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (10)

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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, "KENYA BUILDING, CONSTRUCTION, TIMBER, FURNITURE & ALLIED INDUSTRIES EMPLOYEES’ UNION v HAYER BISHAN SINGH & SONS LTD [2003] KEELRC 26 (KLR)", Case Analysis (2003). Cause No. 20 of 2000. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2003/26/eng@2003-03-06

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