Banking, Insurance & Finance Union v Kenya Post Office Savings Bank Ltd (Employment and Labour Relations Cause E822 of 2021) [2023] KEELRC 1542 (KLR)
The bottom line
#A Kenyan employment court confirmed a union's right to wage increments but left the actual amounts to negotiation because the employer's ability to pay was unproven.
What this practically means
#Executive summary
#Key legal issues
#Constitutional right to collective bargaining versus employer's financial capacity
The claimant has a constitutional right under Article 41 to bargain collectively and had established its case, but any award must be sustainable against the respondent's ability to pay, which was not proved by audited accounts
The court accepted the union's Article 41 right and found the respondent had shown indifference and made no effort to negotiate since 2017. However, neither party supplied audited accounts or sufficient submissions proving the respondent could sustain the increments, so the court declined to grant the prayers in the abstract and instead directed the parties to conclude the revised CBA within 60 days.
Weight of the SRC report
The SRC report was of informational use only and did not persuade the court to its determination
Both parties had accepted the SRC report and treated the matter as an economic dispute, yet the claimant later attacked the report. The court held the report could inform but not determine the outcome, and observed that the SRC cannot give itself authority it does not have when dealing with independent organisations.
Employer's failure to negotiate in good faith
The respondent made no genuine effort to negotiate the revised CBA and bore responsibility for the deadlock
The respondent merely returned a report that its financial situation had not changed, produced no audited accounts, and made no effort to meet the claimant. The court found the respondent's attitude of indifference unfair given the claimant's patience since 2017 and its request to start negotiations afresh, which the court found did not ring genuine.
Legal principles established
#- A wage increment must be grounded on the employer's demonstrated financial capacity and sustainability of the wage bill
- Collective bargaining is voluntary and founded on social dialogue, freedom of contract and party autonomy
- In economic disputes the court is guided by information presented by the parties and expert opinion, including audited accounts of capacity to pay
Court orders
#- 1.The court found the claimant had established its case and granted its prayers for increment of dues on the listed heads (salary and wages; housing allowance; owner occupier allowance; subsistence allowance; annual leave allowance; medical (outpatient); car allowance; commuter allowance; hardship allowance; sundry (extraneous) allowance)
- 2.The parties ordered to finalise the revised collective bargaining agreement within 60 days and agree on the perimeters of the revisions or as otherwise agreed
- 3.Mention on 18/9/2023 to give a report on the revised CBA and to make final orders
- Jurisdiction invoked
- Original jurisdiction under the Employment and Labour Relations Act over trade disputes (references to section 15 of the Employment and Labour Relations Act cap 234); Article 41 of the Constitution on collective bargaining
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Banking, Insurance & Finance Union v Kenya Post Office Savings Bank Ltd (Employment and Labour Relations Cause E822 of 2021) [2023] KEELRC 1542 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1542/eng@2023-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.