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ELRCDismissedCause No. of 2022 (Memorandum of Claim dated 9th February 2022)· [2023] KEELRC 2254 (KLR)

Kenya Union of commercial Food and Allied Workers v National Social Security Fund (Cause E083 of 2022) [2023] KEELRC 2254 (KLR)

Employment and Labour Relations Court
18 September 2023
OKOcharo Kebira
6,572 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that NSSF could lawfully outsource its staff medical scheme management because the collective agreement promised benefits, not in-house administration.

What this practically means

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Executive summary

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The Claimant Union sued the National Social Security Fund over the Fund's decision to outsource management of its unionisable employees' Self-Funded In-House Medical Scheme to Minet Kenya Insurance Brokers Limited, alleging breach of Clause 10 of the Collective Bargaining Agreement dated 23rd July 2020, violation of the ruling and consent in Industrial Court Cause No. 60 of 2012, absence of consultation and public participation, and sought declarations, withdrawal of circulars, restraining orders and quantified costs. The Respondent maintained that Clause 10 covered medical benefits only, that the Minet contract merely outsourced administration of an unaltered in-house scheme, and that the Board of Trustees acted within the NSSF Act and Article 201 of the Constitution to curb unsustainable annual medical expenditure averaging KShs. 214 million. The matter proceeded by way of pleadings, witness statements, documents and written submissions. The Court framed four issues. Applying the canons of contractual interpretation, including the South African KPMG v Securefin decision, it found Clause 10 sufficiently clear and confined to medical benefits and rates, with management of the scheme not a negotiable item; the union's remedy was negotiation. The suit was held not premature under section 69(b) of the Labour Relations Act despite the Conciliator's failure to issue a certificate. The claim was dismissed in its entirety, with each party bearing its own costs in light of the continuing Recognition and Collective Bargaining relationship.

Key legal issues

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01

Whether outsourcing management of the medical scheme violated Clause 10 of the CBA

Holding

No violation; Clause 10 provided for medical benefits only, not management of the scheme, and was sufficiently clear

Reasoning

Applying contractual interpretation canons, the court found Clause 10 clear: it establishes medical benefits and rates, reviewable in consultation with the union. Management of the scheme was not a negotiable item. The remedy for the union was to negotiate inclusion of the item, not litigation. Outsourcing via Minet did not breach the CBA.

p. 12
02

Whether the suit was prematurely filed

Holding

Not premature; under section 69(b) of the Labour Relations Act, 30 days' expiry from appointment of the conciliator suffices even absent a certificate

Reasoning

Although the Conciliator never issued a certificate of unresolved dispute despite the Claimant's efforts, section 69(b) deems a dispute unresolved when thirty days expire from the conciliator's appointment. The Claimant therefore had the right to approach the Court directly.

p. 13
03

Entitlement to reliefs and costs

Holding

Claim dismissed; costs not awarded to the winning Respondent because of the parties' continuing Relationship Agreement

Reasoning

Having found no breach of Clause 10, the court held the Claimant not entitled to the reliefs. Though costs follow the event, the court departed from that principle given the subsisting Recognition and Collective Bargaining Agreement between the parties.

p. 13

Legal principles established

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  • Interpretation of collective agreements follows common-law contractual interpretation canons; where wording is clear, no external evidence is admitted
  • A union constituency is bound by the bargain its representatives make unless it is manifestly unconstitutional
  • A trade dispute may be filed where 30 days expire from appointment of the conciliator even without a certificate of unresolved dispute

Court orders

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  1. 1.The Claimant's case is dismissed
  2. 2.Each party to bear its own costs

Authorities

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Legislation

  • Labour Relations Actsections 2, 60, 69
  • National Social Security Fund Actsections 3, 4, 5, 10(2)(c)
  • Evidence Actsections 107, 108
  • Public Procurement and Asset Disposal Act
  • Constitution of KenyaArticles 201, 48, 159(2)(d)
  • Occupational Health and Safety Act
  • Work Injury Benefits Act2007
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure Actsection 1B
  • Advocates (Remuneration) (Amendment) Order2014

Cases cited (5)

  • Kenya Union of Domestic, Hotel, Education & Allied Workers vs Salaries & Remuneration Commission
    (2014) eKLR
  • National Bank of Kenya Ltd vs Pipe Plastic Samkolit (K) Ltd
    (2011) eKLR
  • Kipkebe Limited vs Peterson Ondieki Tai
    (2016) eKLR
  • Janet Mwacha Mwaboli vs Modern Soap Factory Limited
    (2019) eKLR
  • KPMG Chartered Accountants v Securefin Ltd & Another
    2009 [4] SA 399 [SCA]
Jurisdiction invoked
Labour Relations Act, 2007 (trade dispute referred following conciliation under section 69)

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, "Kenya Union of commercial Food and Allied Workers v National Social Security Fund (Cause E083 of 2022) [2023] KEELRC 2254 (KLR)", Case Analysis (2023). Cause No. of 2022 (Memorandum of Claim dated 9th February 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2254/eng@2023-09-18

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