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Court of AppealPartially AllowedCourt of Appeal Appeal from ELRC Cause No. 414 of 2013· [2024] KECA 965 (KLR)

Lochab Brothers Limited v Transport Workers Union

Court of Appeal of Kenya
26 July 2024
Mohamed Abdulahi WarsameM. WarsameFOF. OchiengJMJ. Mativo
3,167 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled employers cannot be forced to pay union dues from their own funds and unions must plead their case correctly.

What this practically means

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Executive summary

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The Court of Appeal at Nakuru (Warsame, Ochieng and Mativo, JJA) allowed the appellant transport company's appeal against the judgment of Byram Ongaya, J. in ELRC Cause No. 414 of 2013, which had ordered the company to comply with sections 48, 50 and 54 of the Industrial Relations Act, pay accrued union dues from its own funds under section 19(6) of the Employment Act, deduct and remit dues going forward, and negotiate recognition and collective agreements. On appeal by written and oral submissions, the Court framed two issues: whether the appellant was liable to pay dues under Gazette Notice No. 3220 of 2012, and whether it could be compelled to pay dues retrospectively from its own funds. On the first, the Court held that the respondent union's pleaded case was founded on the 2012 gazette notice, yet the check-off forms served between 2010 and 2012 were pursuant to the 1997 ministerial order under the repealed Trade Disputes Act. Non-compliance with the 1997 order was never pleaded or amended, and a party is bound by its pleadings; the court cannot decide an unpleaded case. On the second, the Court held that section 19(6) of the Employment Act applies only where an employer has been prosecuted and convicted for failing to remit deductions actually made; the appellant had deducted nothing, so retrospective payment from its own funds was unjust. The Court entirely set aside the judgment below with costs to the appellant.

Key legal issues

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01

Whether a claim founded on Gazette Notice No. 3220 of 2012 could succeed where the check-off forms were served under the 1997 ministerial order

Holding

No. The cause of action pleaded was non-compliance with Gazette Notice 3220 of 2012, but the effective order at the time of recruitment was the 1997 order; the court cannot found liability on an unpleaded order.

Reasoning

The court held that pleadings define the case and evidence must support the pleaded cause of action. The respondent pleaded breach of the 2012 gazette notice, yet the check-off forms were served under the 1997 order under the repealed Trade Disputes Act. Non-compliance with the 1997 order was never pleaded nor amended, so finding for the respondent would raise a fresh, unpleaded case and amount to speculation and a denial of justice.

p. 6
02

Whether the appellant could be compelled to pay union dues retrospectively from its own funds under section 19(6) of the Employment Act

Holding

No. Section 19(6) applies only upon conviction under section 19(5) for failure to remit deductions already made; the appellant never deducted any sums.

Reasoning

The court examined sections 19(4), (5) and (6) of the Employment Act and held that subsection (6) is triggered only where proceedings are brought for failure to remit deductions and the employer is convicted and fined. Here the appellant deducted nothing from employees' wages, so there was nothing to remit; ordering retrospective payment from the employer's own funds, with no corresponding right to recover from future wages, would be unjust and unfair.

p. 7
03

Whether a recognition agreement and deduction of union dues are independent

Holding

Yes. Recognition entitles a union to negotiate a collective bargaining agreement, but deduction and remittance of dues rest separately on a ministerial order and service of Form S.

Reasoning

The court distinguished the statutory basis of recognition from that of check-off deductions. The respondent had achieved the recognition threshold and the appellant abandoned that ground, but recognition alone does not oblige an employer to deduct dues; deductions require a directive order from the Minister and service of Form S signed by the employees. This distinction framed the two issues on which the appeal turned.

p. 4

Legal principles established

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  • A party is bound by its pleadings and cannot succeed on a case not pleaded; evidence must conform to the pleaded cause of action.
  • Under section 48 of the Labour Relations Act, service of Form S authorising deduction of union dues must be preceded by a ministerial order directing the employer to deduct.
  • Section 19(6) of the Employment Act is triggered only where proceedings have been brought against an employer for failure to remit deductions and the employer has been convicted and fined; an employer who never deducted dues cannot be ordered to pay them retrospectively from its own funds.

Court orders

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  1. 1.Set aside in entirety the judgment of the Employment and Labour Relations Court dated 28th March 2014 delivered in ELRC Cause No. 414 of 2013
  2. 2.Set aside all consequential orders and decree ensuing from that judgment
  3. 3.Costs of the appeal to the appellant
On appeal from
Employment and Labour Relations Court
ELRC Cause No. 414 of 2013
Jurisdiction invoked
First appeal under the Court of Appeal Rules (Rule 29(1)(a) invoked for re-appraisal of evidence)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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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, "Lochab Brothers Limited v Transport Workers Union", Case Analysis (2024). Court of Appeal Appeal from ELRC Cause No. 414 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/965/eng@2024-07-26

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