Banking, Insurance & Finance Union (Kenya) v Ardhi Sacco Society Limited [2016] KEELRC 60 (KLR)
The bottom line
#Kenya's Employment Court ruled an employer cannot delay CBA negotiations to dodge payments — the union got a retroactive three-year wage award.
What this practically means
#Executive summary
#Key legal issues
#Effective date of a CBA where negotiations are concluded long after the period it was to cover
The court fixed the effective date at 1st September 2013 to 31st August 2016, as offered by the Respondent and accepted by the Claimant, rather than adopting the Respondent's late proposal of 1st September 2017.
The Respondent had costed the CBA with knowledge of its financial implications, offered 1st September 2013 as the effective date, yet delayed implementation and unilaterally increased salaries by 10% in 2014 and 2015 outside the recognition agreement. The court found this lacked good faith and amounted to an unfair labour practice, holding that stalling negotiations to avoid CBA terms cannot be rewarded. It adopted the retroactive period already conceded to by the Claimant.
General wage increment percentages applicable over the CBA period
The court awarded 0% for the first year, 20% for the second year and 10% for the third year, factoring in the Respondent's unilateral 10% increments in 2014 and 2015.
The Respondent did not challenge the percentages in the Memorandum of Claim, but the court noted the Respondent had already granted 10% increases in two of the years under negotiation. To avoid double payment, those increments were credited against the claimed percentages, producing a reduced award spread across the three-year period.
Employer's duty of good faith in concluding a CBA under section 57 of the Labour Relations Act
An employer that has recognised a trade union must conclude a collective agreement and disclose relevant information to enable effective negotiation; failure to negotiate in good faith is an unfair labour practice.
The court anchored the CBA framework in section 57(1) and (2) of the Labour Relations Act read with Article 41 of the Constitution. The Respondent's materials on financial implications, produced for the first time in court submissions, ought to have been disclosed during negotiations. Working outside the recognition agreement by raising salaries unilaterally was an unfair labour practice.
Legal principles established
#- Stalling negotiations so as to avoid meeting the terms of a CBA is not a fair labour practice and works against the party in procrastination.
- Delayed negotiations over an employee's benefit is not a bar to claiming the same; a benefit can be claimed retroactively.
Court orders
#- 1.The effective date shall be 1st September 2013 to 31st August 2016, a period of 3 years
- 2.The General wage for the period of the CBA shall be at 0% first year, 20% second year, and 10% for third year
- 3.No orders as to costs
- Jurisdiction invoked
- Labour Relations Act read together with Article 41 of the Constitution on fair labour practices in employment and labour relations
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Banking, Insurance & Finance Union (Kenya) v Ardhi Sacco Society Limited [2016] KEELRC 60 (KLR)", Case Analysis (2016). Cause No. 782 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/60/eng@2016-09-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.