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ELRCDismissedNot stated in the judgment· [2016] KEELRC 43 (KLR)

Kenya Aviation Workers Union v Ballore Africa Logistics Kenya Limited & another [2016] KEELRC 43 (KLR)

Employment and Labour Relations Court
17 November 2016
4,132 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to force employees to repay seven years of union agency fees, ruling the delayed demand was unfair and unconstitutional.

What this practically means

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Executive summary

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Two applications fell for determination: one by the Respondent employer dated 5th May 2016 seeking directions on the period and mode of deducting agency fees payable to the Interested Party union pursuant to the Court's ruling of 23rd February 2016, and one by the Interested Party dated 16th May 2016 seeking leave to commence contempt proceedings against the Respondent, a fine of Kshs 5,000,000, committal to civil jail for up to six months, and an order compelling the Respondent to deduct agency fees at 2% retrospectively and remit them to the Interested Party. The background was that the Respondent had issued a circular on 8th April 2015 to deduct agency fees under Legal Notice No.5027 of 2009; the Claimant union obtained interim orders on 20th April 2015 stopping the deductions, and those orders were vacated when its application was dismissed on 23rd February 2016. The Claimant opted out of the two applications. Holding that section 49 of the Labour Relations Act must be read together with Articles 36 and 41 of the Constitution, the Court held that the agency fee right cannot be enforced so as to negate fundamental rights. The Interested Party had stayed silent from June 2009 until April 2015, and demanding fees for the period 2009 to 2016, to be repaid from employees' salaries, would be grossly punitive and extreme, leaving employees without pay for months. The interim orders were lawful orders that all parties had obeyed, so punishing the Respondent would serve no useful purpose. Both applications were disallowed; the Court declared that no agency fees is payable under Legal Notice No.5027 of 2009, the demand being overtaken by time and grossly unfair, and ordered each party to bear own costs.

Key legal issues

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01

Whether retrospective agency fees deductions from 2009 to 2016 could be ordered

Holding

No - the demand was made too late, was grossly punitive and would leave employees without salary for months

Reasoning

The Interested Party remained silent from June 2009 until April 2015 when the Respondent issued its circular, and only sought to be enjoined to demand dues when the Claimant filed suit. The employees not members of the Interested Party received their wages without any deduction and should not be sanctioned for the Interested Party's delay. Ordering repayment from 2009 to 2016 would leave employees with no salary for months and would entrench an unfair labour practice, contrary to Articles 36 and 41 of the Constitution.

p. 6
02

Whether the Respondent was in contempt of court orders

Holding

No - the interim orders of 20th April 2015 were lawful orders issued to ensure a fair hearing and their compliance cannot ground committal or penalisation

Reasoning

The stoppage of the Respondent's circular on agency fee deductions was a lawful interim order that bound all parties, and the Court had noted that the claimant, Respondent and Interested Party had all abided by it. Since the Respondent obeyed a valid court order and was not found to be on the wrong, punishing it would serve no useful purpose, and the agency fees claimed were in any event not due being made late in the day.

p. 5
03

Whether the Court should exercise residual/inherent jurisdiction to give directions on agency fee deductions

Holding

The directions sought do not arise; the Court declined to make orders that would impoverish employees

Reasoning

The Respondent sought directions on the mode and formula for deductions, but the Court held that making such directions would amount to using the Court to impoverish employees who had enjoyed non-deduction for over seven years. The Court invoked its inherent jurisdiction, as described in the cited authorities, to prevent abuse of process and do justice between the parties, holding the demand for retrospective fees to be extreme and unfair.

p. 6

Legal principles established

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  • Section 49 of the Labour Relations Act must be read together with the constitutional rights to freedom of association and fair labour practices; agency fees cannot be enforced in a manner that negates fundamental rights or punishes employees
  • A party entitled to agency fees must assert that right without delay; an employer not found at fault and employees who received full wages should not be sanctioned with retrospective back-deductions
  • The Court's inherent jurisdiction may be invoked to prevent abuse of process and do justice between the parties

Court orders

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  1. 1.The two applications dated 5th May 2016 and 16th May 2016 were not allowed
  2. 2.No agency fees is payable from the Respondent's employees with regard to Legal Notice No.5027 of 2009, the demand being overtaken by time and grossly unfair on the employees
  3. 3.Each party shall bear own costs

Authorities

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Legislation

  • Labour Relations Actsection 49(1)
  • Labour Relations Actsection 48
  • Labour Relations Actsection 57
  • Constitution of Kenya, 2010Article 36
  • Constitution of Kenya, 2010Article 41
  • Civil Procedure Actsection 63
  • Civil Procedure RulesOrder 40
  • Legal Notice No.5027 of 6th May 2009deduction of agency fees
  • Legal Notice No.6135 of 2013revocation of Legal Notice No.5027 of 2009

Cases cited (3)

  • Meshallum (Mashallum) Wanguhu versus Kamau Kania
    Civil Appeal No.101 of 1984, 1 KLR
  • Nicholas Mahihu versus Nduma Tea Factory Ltd & Another
    Civil Appl. No.101 of 2009
  • Rev. Madara Evans Okanga Dondo vs. Housing Finance Company of Kenya
    Nakuru HCCC No. 262 of 2005
Jurisdiction invoked
Labour Relations Act, sections 48, 49 and 57; Articles 36 and 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, "Kenya Aviation Workers Union v Ballore Africa Logistics Kenya Limited & another [2016] KEELRC 43 (KLR)", Case Analysis (2016). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/43/eng@2016-11-17

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