Chemilil Sugar Company Ltd & 2 others v Kenya Union of Sugar Plantation and Allied Workers [2014] KEELRC 99 (KLR)

Under section 59(1) of the Labour Relations Act a collective agreement binds the parties to it. The applicants were bound by the CBA and had sought SRC guidance during negotiations. They therefore had standing as a party bound by the agreement and by their own view subject to the SRC Act. However, the court found it unclear whether they had first attempted renegotiation with the union or exhausted the dispute resolution mechanisms under Part VIII of the Labour Relations Act.

Article 230(4) of the Constitution empowers SRC to set remuneration of state officers and advise national and county governments on remuneration of other public officers. Article 260 defines public office by reference to remuneration payable directly from the Consolidated Fund or money provided by Parliament. The applicants are not state organs established under the Constitution, and their employees' wages are paid from the corporations' own generated revenue and borrowings, not directly from public appropriations.

Having found that SRC lacks mandate over commercial state corporations where government is merely an investor, the court held that the SRC letter requiring renegotiation of the registered CBA was issued without jurisdiction. It could not therefore stand in the way of the CBA voluntarily negotiated and signed by the parties and registered by the Court.

The court held that the CBA is a fundamental right recognized by ILO Conventions and the Constitution, protecting workers' associational activities and capacity to act collectively on workplace issues. Any derogation must be for good cause in an open and democratic society. SRC could not, by assumed jurisdiction, emasculate this right of the respondents.