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ELRCAllowedMemorandum of Claim filed 2nd April 2012 (Industrial Court, Cause not otherwise numbered in judgment)· [2014] KEELRC 346 (KLR)

Banking, Insurance & Finance Union (Kenya) v Elimu Co-operative Savings & Credit Society Ltd [2014] KEELRC 346 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
30 May 2014
MOMaureen Onyango
2,668 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 voided a SACCO's fake 'promotions' used to strip employees of union membership, calling them an unfair labour practice.

What this practically means

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Executive summary

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The Claimant Union, registered in 1995 with a recognition agreement with the Respondent, claimed that the Respondent violated their recognition agreement and CBA by unprocedurally and unlawfully promoting all unionisable employees to managerial cadres. Three days after the parties signed a CBA on 21st February 2012, ten of the Claimant's sixteen members received promotion letters. The promotions did not state the positions to which employees were promoted, left basic salaries at CBA-negotiated levels (only allowances changed), and were followed by a stoppage of union dues without authorization and, eight months later, identical letters of resignation from union membership. The Respondent denied any obligation to consult before promotions and maintained the employees were free to leave the Union. The court applied the Industrial Relations Charter categories to determine unionisable positions, since neither party provided the management categorization. It found the new positions were unionisable, duties were unchanged, and employees had been coerced to resign on the advice of the General Manager and under threat of salary reduction, contrary to Sections 5(1) and 5(2) of the Labour Relations Act and Article 41(1) of the Constitution. The court declared the promotions and the resignation letters void, deemed the employees union members unless they resign voluntarily without inducement, allowed them to retain their enhanced salaries and allowances, and ordered the Respondent to resume deduction of union dues from July 2014.

Key legal issues

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01

Validity of the promotions to management cadre

Holding

The promotions were not genuine; they were a cosmetic exercise to remove employees from unionisable categories.

Reasoning

The basic salaries of the promoted employees remained the same as those negotiated in the CBA, their duties did not change (RW1 and RW2 confirmed this), all promoted employees were moved to the same job group 7 regardless of alleged new titles, the promotion letters did not state the positions, and the Industrial Relations Charter shows the new positions are unionisable.

p. 6
02

Coerced resignation from union membership

Holding

The resignations were coerced and violated the employees' rights under Section 5 of the Labour Relations Act.

Reasoning

Union dues were stopped without authorization months before the resignations; the resignations were in identical terms; RW2 testified he was told to write the resignation letter by the General Manager; and employees were made to choose between remaining in the Union and losing the enhanced benefits. This discrimination and coercion contravenes Sections 5(1) and 5(2) of the Labour Relations Act.

p. 6

Legal principles established

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  • An employer may not use sham promotions to remove employees from unionisable cadres or coerce them into resigning from a trade union; such conduct is an unfair labour practice under Section 5 of the Labour Relations Act and contravenes Article 41(1) of the Constitution.

Court orders

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  1. 1.Declared the promotions of the unionisable employees from unionisable to management cadres unlawful, unfair in breach of the parties' CBA and Recognition agreement, an unfair labour practice and therefore void
  2. 2.Declared the letters of resignation written by the 9 employees null and void
  3. 3.The employees shall be deemed to be union members unless they resign of their own volition without inducement with an offer of payment of better benefits or threat of denial of benefits
  4. 4.The employees shall retain the salaries and allowances that they have been receiving since the purported promotions
  5. 5.The Respondent shall with effect from July 2014 resume deduction of union dues

Authorities

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Legislation

  • Labour Relations ActSections 5(1), 5(2), 5(3)
  • Constitution of KenyaArticle 41 (1) and (2)
Jurisdiction invoked
Original jurisdiction of the Industrial Court under the Labour Relations Act and Industrial Court Act over an employment dispute, including violation of the recognition agreement and CBA and Article 41 of the Constitution

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 & Finance Union (Kenya) v Elimu Co-operative Savings & Credit Society Ltd [2014] KEELRC 346 (KLR)", Case Analysis (2014). Memorandum of Claim filed 2nd April 2012 (Industrial Court, Cause not otherwise numbered in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/346/eng@2014-05-30

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