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IndustrialPartially AllowedCause No 1664 of 2012· [2013] KEIC 4 (KLR)

National Union of Water & Sewerage Employees v Mathira Water and Sanitation Company Ltd & 2 others; Attorney General & another (Interested Parties) (Cause 1664 of 2012) (Employment and Labour) [2013] KEIC 4 (KLR)

Industrial Court of Kenya
17 May 2013
JRJames Rika
7,843 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court confirmed water companies and their unions can freely negotiate and register collective agreements without Salaries and Remuneration Commission control.

What this practically means

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Executive summary

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The Claimant trade union sought declarations that the Salaries and Remuneration Commission Act 2011 does not apply to CBAs with water service providers, liberty to register a concluded CBA, and a permanent injunction restraining the 2nd and 3rd Respondents from interfering with collective bargaining, after the 1st Respondent withheld approval of the concluded CBA citing directives that salary reviews required SRC involvement. The 1st Respondent supported the Claimant, arguing its employees are not public officers and are not paid from public funds. The 2nd Respondent contended the real employer question must be examined within the Water Act 2002 reforms, while the Attorney General argued the company is an agent of a State Corporation, its revenues are public funds, its officers are public officers under the Public Officers Ethics Act, and that the claim failed on privity and Government Proceedings Act grounds. The Court held that water companies are private limited liability companies acting as agents and instrumentalities of the Government, rendering public services; their unionisable employees are 'vaguely' public servants paid from public funds, falling within the SRC's advisory function under Article 230(4)(b). The Court held the Commission's expanded review functions and 2013 Regulations conflict with Article 41 and Article 249, and that collective bargaining for unionisable employees belongs to trade unions and employers. The claim substantially succeeded; the directives of 7th June 2011 and 29th August 2012 were declared devoid of legal effect, with no order on costs.

Key legal issues

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01

Status of employees of Water Service Providers

Holding

They are public servants of a special kind, working for a private company that is an agent and instrumentality of a Public Authority, and are paid from public funds

Reasoning

The Court traced the water reforms under the Water Act 2002 and found the water companies are wholly owned by Local Governments, act as agents of Water Services Boards, and render a public service. Revenue is generated from a public resource (water) held in trust by the Government, so the tariff revenue account is a public account privately held. The characterization is a matter of qualitative judgment, and such employees are vaguely public servants falling within the Commission's advisory mandate.

p. 10
02

Whether the SRC Act 2011 bars registration of CBAs for water company employees

Holding

It does not; the Commission's role as to non-State officers is advisory, and collective bargaining for unionisable employees remains with trade unions and employers

Reasoning

Article 230(4) confers on the Commission a two-fold mandate: setting and reviewing State officers' remuneration, and merely advising National and County Governments on remuneration of other public officers. The Act's expanded review functions and the 2013 Regulations were found too restrictive, in conflict with Article 41 rights to collective bargaining and the objects of Article 249, and a recipe for industrial unrest.

p. 12
03

Validity of the directives of 7th June 2011 and 29th August 2012

Holding

The directives blocking the CBA were declared devoid of legal effect

Reasoning

The 2nd Respondent withheld approval of the concluded CBA on the basis of an Office of the President circular and advice that the CBA was a salary review requiring SRC involvement. The Court held the Water Company enjoys operational autonomy over its unionisable staff and that neither the Board, the Commission nor the Government could interfere with the negotiated CBA between the employer and the union.

Legal principles established

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  • Water Companies are private limited liability companies rendering public services as agents and instrumentalities of the Government, and their unionisable employees fall within the advisory function of the Salaries and Remuneration Commission
  • The Commission's role regarding non-State officers is advisory only; it was not intended to take over collective bargaining for unionisable public sector employees
  • An agent or factor of a person can be an employer; Water Companies can be employers and independently negotiate terms and conditions of employment with their employees

Court orders

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  1. 1.Declared that the Salaries and Remuneration Commission Act 2011 does not bar the Claimant and the first Respondent from registering the CBA concluded between them
  2. 2.Declared that the Salaries and Remuneration Commission Act 2011 does not bar any Water Service Provider from collectively bargaining and registering a CBA with any recognized trade union
  3. 3.The Claimant and the first Respondent are at liberty to submit the CBA concluded between them to the Industrial Court for registration
  4. 4.The 2nd and 3rd Respondents shall not interfere with the Claimant's and 1st Respondent's right to collectively bargain
  5. 5.The instructions given by the 3rd and 2nd Respondents in the letters of 7th June 2011 and 29th August 2012 are declared devoid of any legal effect
  6. 6.No order on the costs

Authorities

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Legislation

  • Labour Relations Act2007
  • Companies ActCap 486
  • Water Act2002, Sections 3, 4, 47, 51, 53, 55(1)
  • Salaries and Remuneration Commission Act2011, Sections 11, 13(1)(d)
  • Public Officers Ethics Act2003, Section 2
  • Exchequer and Audit ActCap 412
  • Government Proceedings ActCap 40, Section 16(1)
  • Employment Act2007, Section 2
  • Industrial Court Act2011, Section 2
  • Constitution of KenyaArticles 36, 41, 43(1), 230, 249, 260
  • Water Bill2012
  • Salaries and Remuneration Commission (Remuneration and Benefits of State and Public Officers) Regulation2013, Regulation 18

Cases cited (3)

  • Hands of Hope International v. Mayfair Insurance Co. Ltd
    eKLR [2010]
  • Republic v. Eldoret Water and Sanitation Company ex parte Booker Onyango
    [2008] eKLR, Eldoret High Court Miscellaneous Civil Application Number 97 of 2003
  • David Gioko and Others v. Nairobi City Water and Sewerage Company Limited
    Industrial Court Cause Number 1722 of 2011
Jurisdiction invoked
Original jurisdiction of the Industrial Court over employment and labour relations disputes; dispute concerning registration of a CBA under the Labour Relations Act 2007 and the Industrial Court Act 2011

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "National Union of Water & Sewerage Employees v Mathira Water and Sanitation Company Ltd & 2 others; Attorney General & another (Interested Parties) (Cause 1664 of 2012)  (Employment and Labour) [2013] KEIC 4 (KLR)", Case Analysis (2013). Cause No 1664 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2013/4/eng@2013-05-17

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