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ELRCPartially AllowedCause 901 of 2012· [2012] KEELRC 131 (KLR)

BANKING INSURANCE AND FINANCE UNION V JAMII SACCO SOCIETY LIMITED [2012] KEELRC 131 (KLR)

Industrial Court of Kenya
6 December 2012
1,744 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court found a Sacco's staff promotions were timed in bad faith to weaken a union, but ruled the affected employees' written resignations stood.

What this practically means

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Executive summary

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The Union claimed the Sacco had made 'phantom promotions' of unionisable staff to defeat the Recognition Agreement and had refused to remit union dues, seeking injunctions, an order to deduct and remit dues with arrears for 17 employees, compulsory CBA negotiations, and costs. The Respondent, represented by FKE counsel, maintained the promotions were merited, the positions were advertised and interviews conducted, and the employees had voluntarily resigned from the Union by individualized letters and an affidavit, invoking Article 36 of the Constitution and section 48(6)&(7) of the Labour Relations Act. The court framed two questions: whether the promotions were phantom and whether the resignations were voluntary. It found the Respondent entitled to promote employees but held the manner and timing reeked of bad faith: the resignations were motivated by the promotions, the changes in designations were cosmetic not substantive, the resignations occurred in clockwork fashion leading to a notice revoking the Recognition Agreement, and the employees' affidavit was filed in the Respondent's name. Nevertheless, individualized resignation letters were on record, so dues could not be deducted. Applying the Kenya Game Hunting case, the court held unions cannot run an employer's affairs. The court declined most of the reliefs and ordered only that the parties review the unionisable job categories per the Industrial Relations Charter without loss of accrued benefits, after which the Union may recruit afresh. Each party was to bear its own costs.

Key legal issues

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01

Whether the promotions of unionisable staff to non-unionisable grades were phantom

Holding

The promotions were not substantive but merely cosmetic and were made in bad faith, timed while unionisable job categories were on the negotiating table

Reasoning

The court found the resignation letters were motivated by the promotions; the matter of unionisable job categories was under negotiation when promotions occurred; changes in designations and duties were cosmetic not substantive; the clockwork resignations and notice of revocation of the Recognition Agreement revealed an intention to remove the union; and the affidavit sworn by the employees was filed in the Respondent's name.

p. 4
02

Whether the resignations from the union were voluntary

Holding

Despite the bad faith surrounding the promotions, individualized resignation letters were on record, so the Respondent cannot deduct union dues from those employees

Reasoning

The court found circumstantial indicia of coercion: resignations followed the promotions in clockwork fashion and the affidavit was filed by the Respondent. However, since individualized letters signed by the respective employees expressing their wish to resign were on record, section 48(6)&(7) of the Labour Relations Act barred deduction of dues from them.

p. 4
03

Whether the union can interfere in the employer's management affairs

Holding

Unions cannot run the employer's affairs; participation is limited to recognition agreements and CBAs

Reasoning

Relying on the Kenya Game Hunting decision, the court held that co-determination principles are not accommodated under the Constitution; the Respondent was entitled to promote its employees, though the timing and manner evidenced bad faith.

p. 3

Legal principles established

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  • Trade unions cannot force an employee into membership; freedom of association protects both joining and leaving a union
  • Trade union participation in management cannot extend beyond what is agreed in recognition agreements and CBAs

Court orders

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  1. 1.That the parties review the unionisable job categories in accordance with the parameters set in the Industrial Relations Charter, without any loss of accrued benefits to the employees
  2. 2.That upon the review, the Claimant is at liberty to pursue a fresh recruitment of members
  3. 3.Each party will bear their own costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 41
  • Constitution of Kenya, 2010Article 36
  • Labour Relations ActSection 48(6)&(7)

Cases cited (1)

  • Kenya Game Hunting and Safari Workers Union Vs Lewa Conservancy Limited
    Industrial Cause No. 1567 of 2011
Jurisdiction invoked
Industrial Court of Kenya first-instance jurisdiction over trade disputes (Labour Relations Act); claim reported as a trade dispute

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, "BANKING INSURANCE AND FINANCE UNION V JAMII SACCO SOCIETY LIMITED [2012] KEELRC 131 (KLR)", Case Analysis (2012). Cause 901 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/131/eng@2012-12-06

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