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ELRCDismissedCause No 2192 of 2016· [2023] KEELRC 427 (KLR)

Banking, Insuarance & Finance Union (Kenya) v Family Bank Kenya Ltd (Cause 2192 of 2016) [2023] KEELRC 427 (KLR)

Employment and Labour Relations Court
20 February 2023
JGJacob Gakeri
3,674 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court dismissed a union's bid to collect agency fees from CBA Bank because the union failed to prove which employees owed them.

What this practically means

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Executive summary

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The claimant union, holding a recognition agreement and CBA with the Kenya Bankers Association, sued the respondent bank (KBA member No 19) seeking a declaration that it was entitled to agency fees from unionisable non-member employees of the respondent and an order compelling remittance of agency fees pursuant to Gazette Notice No 924 of 6th February 2009, following the respondent's failure to respond to demand letters of May and August 2014. The respondent denied having unionisable employees, asserting all its staff, the lowest being degree-holding accountants, had individual contracts with superior terms, that subordinate and technical roles were outsourced, and that binding it to a CBA negotiated via the KBA violated freedom of association under Article 41 of the Constitution. The court framed three issues: entitlement to agency fee, existence of unionisable employees, and entitlement to the reliefs sought. It held that agency fees are payable only by unionisable non-member employees benefiting from a CBA and that Section 49 of the Labour Relations Act requires a Minister's order supported by a list of employees prepared by the employer. The claimant proved neither that the respondent had unionisable employees nor a Minister's order or employee list; under Sections 107 and 109 of the Evidence Act the burden lay on the claimant. The declaration was declined and the remittance order disallowed, and the entire claim was dismissed with costs on February 20, 2023.

Key legal issues

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01

Whether the Respondent had unionisable employees covered by the CBA with the KBA

Holding

The Claimant failed on a balance of probabilities to prove that the Respondent had unionisable employees benefiting from the CBA

Reasoning

The Respondent's witness testified that the lowest cadre were degree-holding accountants with individual contracts and that subordinate and technical staff were outsourced. The Claimant adduced no list of unionisable employees and no evidence of union membership among the Respondent's staff. Under Sections 107 and 109 of the Evidence Act, the burden lay on the Claimant, which it failed to discharge.

p. 7
02

Whether agency fees could be deducted absent a Minister's order under Section 49 of the Labour Relations Act

Holding

Deduction of agency fee requires compliance with Section 49(2), including a request to the Minister and a list of employees from the employer

Reasoning

Section 49(1) permits deduction only upon a Minister's order following a compliant request specifying the employees' list, the amount of agency fee and the payment account. The Claimant neither proved it made such a request nor produced the Minister's order containing the list of the Respondent's employees, which fatally weakened its case even though Gazette Notice No 924 of 2009 existed.

p. 7

Legal principles established

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  • Agency fee is payable only by unionisable employees who are not union members and who benefit from a CBA, and deduction requires a Minister's order supported by a list of the employees concerned under Section 49 of the Labour Relations Act
  • The burden of proof lies on the party that alleges, and a union claiming agency fees must prove the existence of unionisable employees and a list of those from whose wages deduction is due
  • Union membership is voluntary and constitutionally protected

Court orders

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  1. 1.The claim is dismissed with costs
  2. 2.It is so ordered

Authorities

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Legislation

  • Labour Relations Act No 14 of 2007Sections 49, 49(1), 49(2)
  • Constitution of Kenya, 2010Articles 41, 27, 159(2)(d), 48
  • Employment Act, 2007Section 5
  • Evidence ActSections 107, 109
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B
  • Civil Procedure RulesOrder 21 Rule 1
  • Labour Institution ActNot specified (referenced alongside Section 49(1) of the Labour Relations Act)
  • Gazette Notice No 924 of 6th February 2009Minister's order on agency fee deduction
  • Gazette Notice No 13212 dated 26.10.2010Referenced in quoted authority (KPAWU v Agricultural Employers Association)

Cases cited (5)

  • Banking Insurance and Finance Union v Middle East Bank Kenya Limited
    (2020) eKLR
  • Kenya Aviation Workers Union v Bollore Africa Logistics & Another
  • Amalgamated Union of Kenya Metal Workers v Toyota Kenya Limited
  • Kenya Plantation and Agriculture Workers Union v Agricultural Employers Association
    (2016) eKLR
  • Banking Insurance and Finance Union (Kenya) v Paramount Universal Bank Kenya Ltd
    (2021) eKLR
Jurisdiction invoked
First-instance claim under the Labour Relations Act No 14 of 2007; court established under Article 162(2) of the Constitution (not expressly stated in the extract)

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, "Banking, Insuarance & Finance Union (Kenya) v Family Bank Kenya Ltd (Cause 2192 of 2016) [2023] KEELRC 427 (KLR)", Case Analysis (2023). Cause No 2192 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/427/eng@2023-02-20

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