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ELRCPartially AllowedCause No 642 of 2013· [2015] KEELRC 78 (KLR)

Banking Insurance and Finance Union of Kenya v Kenya Commercial Bank Limited [2015] KEELRC 78 (KLR)

Employment and Labour Relations Court of Kenya
18 December 2015
2,696 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled KCB could not deny salaries to reinstated employees, but refused to make Graduate Trainees union members.

What this practically means

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Executive summary

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The Claimant union sued Kenya Commercial Bank over unpaid salaries to reinstated employees, overtime compensation, meal allowances, administration of the staff medical scheme, phantom promotions and terms of service for Graduate Trainees. At trial the union abandoned the medical scheme, meal allowances and phantom promotion claims, leaving three issues: back salaries for reinstated employees, CBA cover for Graduate Trainees, and overtime compensation. On the back salaries claim, the Court found the employees had been terminated but reinstated on appeal, with terminations replaced by warnings, and that the Disciplinary Committee had in fact recommended no disciplinary action against at least one employee. The Court held that the condition in the re-employment letters treating the period out of work as leave without pay was unconscionable, given the inequality of bargaining power between employer and employee, and quashed and set aside that clause, directing parties to tabulate and pay the withheld salaries within thirty days. On Graduate Trainees, the Court held they are indentured learners under the Industrial Training Act, 2012 and declined to convert them into the unionisable establishment, finding that doing so would abolish such programs against the public interest. The overtime claim failed for want of evidence of specific uncompensated overtime. The only successful head was the back salaries claim; each party was ordered to bear its own costs.

Key legal issues

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01

Entitlement of reinstated employees to back salaries for the period out of employment

Holding

The condition in the re-employment letters that the period of absence be treated as leave without pay was unconscionable and was quashed and set aside; the employees are entitled to the withheld salaries.

Reasoning

The terminations were effectively reversed on appeal, with terminations replaced by warnings. Reinstatement presupposes no wrong assignable to the employee. A warning ordinarily does not forfeit salary. Imposing a no-salary condition on employees seeking re-engagement exploited unequal bargaining power and was unconscionable. The offending clause was quashed and parties directed to tabulate and pay the salaries.

p. 5
02

Whether Graduate Trainees are unionisable and eligible for CBA cover

Holding

Graduate Trainees are indentured learners within the meaning of the Industrial Training Act, 2012 and are not covered by the CBA; the prayer was declined.

Reasoning

Section 2 of the Employment Act defines an employee to include an apprentice and an indentured learner. Under the Industrial Training Act, an indentured learner serves for a determined period with a view to acquiring knowledge of a trade. The Graduate Trainee Program is a training avenue for fresh graduates, and converting trainees to regular establishment would abolish such programs contrary to the public interest.

p. 6
03

Accrued overtime compensation

Holding

The claim failed for want of evidence.

Reasoning

Although the CBA provides for overtime compensation, the Claimant did not lead evidence of specific accrued overtime that was not compensated. A party alleging non-payment must prove the specific amounts due. The claim was therefore dismissed.

p. 6

Legal principles established

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  • A condition denying an employee salary in a reinstatement letter is an unconscionable term in an employment contract and is unenforceable
  • Employees do not have equal bargaining power with employers, so acceptance of terms imposed on reinstatement cannot bind them

Court orders

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  1. 1.The clause in the reinstatement letters treating the period out of work as leave without pay is quashed and set aside
  2. 2.Parties to tabulate and pay unpaid salaries for the reinstated employees within thirty (30) days from the date of the Award
  3. 3.Claim for CBA cover for Graduate Trainees declined
  4. 4.Claim for overtime compensation dismissed
  5. 5.Each party to bear their own costs
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court over a trade union dispute under a Recognition Agreement and Collective Bargaining Agreement

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Banking Insurance and Finance Union of Kenya v Kenya Commercial Bank Limited [2015] KEELRC 78 (KLR)", Case Analysis (2015). Cause No 642 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/78/eng@2015-12-18

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