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ELRCStruck OutCause No 616 of 2017· [2018] KEELRC 2186 (KLR)

Harrison Otiende & 5 others v Bandari Sacco & 3 others [2018] KEELRC 2186 (KLR)

Employment and Labour Relations Court
20 March 2018
JRJames Rika
2,049 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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Six union members lost their case over misused union funds because two of them never properly signed the document authorising the lawyer to act.

What this practically means

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Executive summary

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Six claimants, members of the Dock Workers Union employed by Kenya Ports Authority, sued Bandari Sacco Limited and another respondent, with the Dock Workers Union as 2nd Interested Party. They alleged irregular and unlawful change of signatories to the Union's Welfare Account at Bandari Sacco and a Barclays Bank account, aimed at procuring a credit facility to a third party secured by members' funds. Relying on Section 41 of the Labour Relations Act, they sought a permanent injunction, personal liability for losses, recall of signatories and fresh appointments per the Union Constitution, and costs. The Respondents and Interested Party raised a preliminary objection: lack of jurisdiction under the Co-operative Societies Act (the Co-operative Tribunal being the proper forum, per Adero v Ulinzi Sacco), failure to meet Section 41's requirement of 5 or more interested persons, defective authority to the 1st Claimant, and non-exhaustion of internal dispute resolution. The Court rejected the jurisdictional objection, holding the dispute concerns misuse of Union members' funds with the Sacco a mere custodian, so Section 41 of the Labour Relations Act applied. It also declined to strike the claim for non-exhaustion, as the Union showed no capacity to resolve disputes internally. However, the Authority and Consent was defective: two claimants (James Maina and Abdi Rahman Nassir) had not personally signed, and no incapacity was explained. This defeated the statutory requirement of at least 5 interested claimants and touched the Court's personal jurisdiction, not a curable technicality under Article 159. The preliminary objection on authority was sustained and the claim struck out with no order on costs. The Court noted pending orders in Petition Number 11 of 2017 protecting the National Treasurer, and warned it would invoke Section 41 if properly moved on shown financial mismanagement.

Key legal issues

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01

Jurisdiction: Section 41 Labour Relations Act versus Co-operative Societies Act

Holding

The dispute falls under Section 41 of the Labour Relations Act, not Section 76 of the Co-operative Societies Act

Reasoning

The dispute concerns misuse of Union members' funds, with the Sacco joined only as custodian/repository of the funds. Its closest connecting factors are with Section 41 of the Labour Relations Act rather than the Co-operative Societies Act, so the objection based on the Co-operative Tribunal's jurisdiction was rejected.

p. 3
02

Internal dispute resolution mechanisms

Holding

Failure to exhaust internal mechanisms does not defeat the claim where the Union has shown no capacity to resolve disputes internally

Reasoning

The Court had repeatedly implored the Union to invoke internal mechanisms without success. Since the Union leadership was unwilling to engage its mechanisms objectively, the Claim could not fail solely on that ground.

p. 3
03

Authority and Consent / Section 41 requirements

Holding

The Authority and Consent did not establish all Claimants signed; two Claimants did not sign, so the 5-or-more threshold under Section 41 was not met, affecting personal jurisdiction

Reasoning

James Maina's signature was made by an unknown person resembling the 6th Claimant's signature, and Abdi Rahman Nassir's slot bore only 'for ABDI' without a signature. No incapacity was shown, and the default was unexplained. This defeated the statutory requirement of 5 or more persons with sufficient interest and affected the Court's personal jurisdiction.

p. 4

Legal principles established

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  • A representative claim under Section 41 of the Labour Relations Act requires 5 or more persons with sufficient interest in the relief sought, proven by valid authority signed by all authorising claimants
  • Defective Authority and Consent affects the personal jurisdiction of the Court and is not a mere technicality remediable under Article 159 of the Constitution

Court orders

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  1. 1.The Preliminary Objection with respect to Authority and Consent to appear, plead and act, is sustained
  2. 2.The Claim is struck out, with no order on the costs

Authorities

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Legislation

  • Labour Relations ActSection 41
  • Co-operative Societies Act Cap 490Section 76
  • Employment and Labour Relations Court (E&LRC) Rules 2016Rule 9 (including 9(2) and 9(3))
  • Constitution of KenyaArticle 159
  • Constitution of the Dock Workers UnionArticles 17(5) and 19

Cases cited (2)

  • Adero & Another v. Ulinzi Sacco Society Limited
    [2002] 1 KLR 577
  • Noah Rotich & Others v. Union of Kenya Civil Servants & Others
    [2018] e-KLR
Jurisdiction invoked
Section 41 of the Labour Relations Act, 2007

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, "Harrison Otiende & 5 others v Bandari Sacco & 3 others [2018] KEELRC 2186 (KLR)", Case Analysis (2018). Cause No 616 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2186/eng@2018-03-20

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