Kenya National Union of Nurses v Eco Bank Kenya Limited & 8 others [2020] KEELRC 1544 (KLR)
The bottom line
#A Kenyan court ordered two unauthorized union branch bank accounts closed and branch officials to account for millions in union dues, but cleared the banks of wrongdoing.
What this practically means
#Executive summary
#Key legal issues
#Locus standi of branch officials to open bank accounts
The 4th to 9th Respondents, as registered branch officials under Chapter XI part 2 of the Union Constitution and per the Registrar of Trade Unions' extract, had the capacity to open the accounts as branch accounts
The Union did not dispute that the 4th to 9th Respondents were branch officials. A certificate of registration for the Uasin Gishu Branch dated 29 October 2013 and a Registrar's extract listing them as branch officials were produced. Chapter XI part 2 of the Union Constitution empowers branch treasurers to open branch accounts. Accordingly, they had locus standi, and the accounts are distinct from the national accounts.
Legality of the handling of the branch accounts
The accounts were handled illegally because branch funds must be accounted for and remitted to the national headquarters account, and no evidence of compliance was produced
The Union Constitution (Chapter XI parts 2 and 3) requires branch treasurers to account to the national treasurer, and provides that check-off monies shall not be paid into branch accounts but sent to the national headquarters account. The branch officials produced no evidence of compliance with these provisions, so the accounts were run in contravention of the Union Constitution.
Conspiracy/fraud by the banks
No fraud or conspiracy by the 1st and 2nd Respondent banks was proved; they followed standard account-opening procedure
The banks attached the account opening forms duly filed by the branch officials and had no interest in the funds. The Claimant tendered no evidence of fraudulent dealings. The court found the opening was systematic and procedural, though the banks ought also to have called for the Union Constitution on maintenance of branch accounts.
Legal principles established
#- Branch officials duly registered with the Registrar of Trade Unions have locus standi to open branch bank accounts for the union
- Branch accounts may not be operated independently of the national gazetted union account; officials must account for branch funds to the national headquarters
- Fraud must be proved by evidence; mere allegation without proof fails
Court orders
#- 1.Permanent closure of the Bank Account Numbers 007320502643901 and 1177568497 held at the 1st and 2nd Respondent banks respectively
- 2.Transfer of funds held in the two accounts forthwith to the Claimant's gazetted bank account (Barclays Bank, Queensway Branch, Account No. 20277G5079)
- 3.Quashing of the instruments used in account opening for the two accounts
- 4.4th to 7th Respondents to jointly account for all funds transacted in Bank Account 007320502643901 being Kshs.9,686,463.15 and refund any money not properly spent in accordance with the Union's Constitution
- 5.8th to 9th Respondents to jointly account for all funds transacted in Bank Account 1177568497 being Kshs.840,000
- 6.Claimant awarded costs of the Claim to be paid by the 3rd to 9th respondents
- Jurisdiction invoked
- Section 47(1)(a) of the Labour Relations Act, No. 14 of 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya National Union of Nurses v Eco Bank Kenya Limited & 8 others [2020] KEELRC 1544 (KLR)", Case Analysis (2020). Not stated in the excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1544/eng@2020-02-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.