Banking, Insurance & Finance Union (Kenya) v Maisha Bora Sacco Society Limited [2016] KEELRC 1191 (KLR)
The bottom line
#Kenya's employment court ordered a Sacco to recognise its employees' union and pay union dues from its own accounts, but refused to convert fixed-term contracts to permanent jobs.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant attained the simple majority required for recognition under section 54 of the Labour Relations Act
Yes, the Claimant had 50-55 check-offs as at 4th February 2014, exceeding the simple majority of the Respondent's unionisable employees; the conciliator's finding of 54 of 55 unionisable employees (98.2%) was accepted uncontradicted
The conciliator established 54 of 55 unionisable employees had been recruited, being 98.2%. The Respondent, in its statement of response and affidavit, never stated its actual number of unionisable employees. Pay slips for July 2014 showed deductions of union dues, corroborating recognition in practice. The court accepted the conciliator's findings as uncontroverted and held simple majority was attained as at 4th February 2014, obliging recognition under section 54.
Whether union dues were payable despite the Respondent's employees being on fixed-term contracts
Yes; while the employment relationship subsisted, the employees were unionised and dues were payable from March 2014 at Kshs.250.00 and Kshs.100.00 to the Claimant and COTU respectively
The right to unionise is secured under article 41 of the Constitution regardless of the nature of the employment contract. While the fixed-term employment subsisted, the employees became unionised upon submission of check-offs. The Ministerial order under Gazette Notice No.516 of 2009 mandated employers of five or more members to deduct and remit dues; section 48(3) obliged the Respondent to commence deductions within 30 days of service of check-offs.
Whether agency fees were payable under section 49(1)
No agency fees due since no CBA existed between the parties
Section 49(1) agency fees depend on the existence of a collective agreement between the union and the employer. No CBA had been concluded or registered with the Court during the litigation period, so agency fees were not due.
Whether fixed-term contracts should be converted to permanent employment
No; fixed-term contracts are valid and expire automatically on their expiry date, and none were shown to have been entered into illegally, under duress, coercion or fraud
The court recognised fixed-term contracts as lawful, relying on Chacha Mwita v KEMRI and Rajab Barasa v Kenya Meat Commission. The Claimant had not concluded any CBA addressing contract nature, and members were bound by their individual fixed-term contracts until renewal or change by mutual consent.
Sanction for non-remittance of dues deducted
Section 82 provides for payment of dues from the employer's own account with a penalty of Kshs.10,000, though the court opted to foster harmonious industrial relations
The Respondent deducted dues in July 2014 but failed to remit or make returns, contravening section 50 which is mandatory and whose contravention is a criminal offence. The statutory sanction under section 82 is a Kshs.10,000 penalty, but the court declined to impose it to foster peaceful industrial relations, while ordering dues payable from the Respondent's own accounts.
Legal principles established
#- The right to unionise is constitutionally secured and cannot be taken away by the nature of the employment contract, including fixed-term contracts
- Once a trade union submits check-offs of more than five unionisable employees and a Ministerial order exists, the employer must deduct and remit union dues; failure obliges the employer to pay the dues from its own account
- A valid fixed-term contract terminates automatically on its expiry date by effluxion of time and such termination is not necessarily a dismissal
Court orders
#- 1.The Respondent shall sign a Recognition Agreement with the Claimant within seven (7) days of the judgment
- 2.Where the Respondent fails to comply, the Registrar of the Court shall sign such Recognition Agreement for and on behalf of the Respondent
- 3.Union dues shall be payable from the Respondent's own account(s) covering 4th February 2014 up and until each Claimant member ceased employment with the Respondent
- 4.The Respondent shall within 7 days submit to the Court a full list of all unionisable employees covered in the submitted check-offs stating date of employment and date of termination, forming the basis for computation of dues owing for Court assessment within the next fourteen (14) days
- 5.Where the Respondent fails to comply, the Claimant shall submit within 14 days the dues owing and not paid by the Respondent for their members from 4th February 2014
- 6.Interest is due on the amounts owing at (d) or (e) above
- 7.Costs of the suit to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over trade union recognition and union dues disputes under the Labour Relations Act
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kenya Export Floriculture and Allied Workers Union v Bohemian Flowers Ltd; Kenya Plantation & Agricultural Workers Union (Interested Party) (Employment and Labour Relations Cause E006 of 2023 & Miscellaneous Application E161 (NRB) of 2023 (Consolidated)) [2024] KEELRC 1055 (KLR)[2024] KEELRC 1055 (KLR)23 Apr 2024
- Banking, Insurance & Finance Union (Kenya) v Maisha Bora Sacco Society Limited [2016] KEELRC 1749 (KLR)[2016] KEELRC 1749 (KLR)20 Jan 2016
Cite this brief
#Cite this brief
Caselaw, "Banking, Insurance & Finance Union (Kenya) v Maisha Bora Sacco Society Limited [2016] KEELRC 1191 (KLR)", Case Analysis (2016). Cause No. 1776 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1191/eng@2016-03-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.