Kenya Hotels and Allied Workers Union v Attorney General & 6 others [2015] KEELRC 278 (KLR)
The bottom line
#Kenya's employment court upheld agency fees charged to non-union hotel workers and dismissed the rival union's challenge in full.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Jurisdiction of the High Court to hear Judicial Review and Petitions challenging decisions of the Industrial Court (now Employment and Labour Relations Court)
- 2.Whether deduction of agency fees and service charge violate Articles 40 and 41 of the Constitution
- 3.Whether the Claimant is entitled to the declarations and orders sought in the Statement of Claim
Key legal issues
#Jurisdiction of the ELRC vis-à-vis the High Court over employment and labour matters
The ELRC has exclusive jurisdiction over all employment and labour relations disputes, including constitutional issues arising from them; the High Court is excluded by Article 165(5)(b).
The court traced Article 162(2) and Article 165(5) of the Constitution and Section 12(1) of the Industrial Court Act, and relied on the USIU and Kenyatta University decisions and the Court of Appeal decision in Mugendi v Kenyatta University, all of which the parties accepted. It held that it has exclusive jurisdiction over this dispute and that the earlier conflicting High Court decisions were resolved by the constitutional scheme.
Constitutionality of agency fees under Section 49 of the Labour Relations Act
Agency fees charged on non-members benefiting from a CBA, including members of a rival union, are constitutional and do not infringe Articles 40 and 41.
The court weighed the union's interest in being cushioned against free riders against the employee's obligation. It noted Abood v Detroit Board of Education, Beck and Hudson in the US and Section 25 of the South African LRA, concluding that agency fees are a charge for a benefit, do not compel association, and reflect the legislature's intention that sectors have a single recognised negotiating union. Sections 48 and 49 are not mutually exclusive.
Service charge deduction of 0.5%
The 0.5% deduction from service charge for an education fund is a matter of the CBA between the 2nd and 3rd Respondents and the Claimant has no locus standi to challenge it.
The court adopted in entirety the reasoning of Kosgei J in Cause No. 90 of 2006, holding that service charge is a negotiated term of the CBA, not a statutory levy, that its distribution is a matter of mutual agreement, that the education account is jointly operated by union and association, and that the training benefits union officials as well as managers.
Whether the ELRC can order transfer of files from the High Court
The ELRC cannot exercise supervisory powers over the High Court, which is a court of the same status; the proper course is to seek transfer in the respective files.
The court held it could not order withdrawal of pending High Court files because none were before it and, even if they were, making such orders would violate Articles 165(6) and (7) which confer supervisory jurisdiction on the High Court over subordinate courts but not over a superior court. Section 22 of the Sixth Schedule governs pending proceedings.
Legal principles established
#- The Employment and Labour Relations Court has exclusive jurisdiction to hear and determine all disputes relating to employment and labour relations, including constitutional claims raising such issues.
- Agency fees under Section 49 of the Labour Relations Act are constitutional and constitute a lawful charge on non-members who benefit from a negotiated CBA, and do not infringe freedom of association or property rights.
- A union without a simple majority cannot obtain recognition or a CBA through the court.
Court orders
#- 1.The claim herein is dismissed
- 2.Each party shall bear its own costs
The bench
#Judges wrote separately. A dissent does not bind; a concurrence may narrow the ratio.
Wrote the judgment
Authored the majority judgment dismissing the claim on jurisdiction, agency fees, service charge and remedies.
Wrote the judgment
Dissented on the agency fee issue, holding that Section 49(1) LRA should not apply to employees who are members of a rival union, as levying agency fees on them constricts the Article 41(2) right to join a union of their choice and amounts to an unfair labour practice.
For the foregoing reasons and with tremendous respect to my brother and sister Judges on this Bench, I dissent on the issue of deduction of agency fees from the Claimant's members.p. 21
- Jurisdiction invoked
- Article 162(2) of the Constitution read with Article 165(5) and Section 12(1) of the Industrial Court (Employment and Labour Relations) Act, following referral by the Chief Justice under Article 162(2)
Relief refused
#Declarations that Articles 40 and 41 were violated
No infringement found; agency fees are a lawful charge for a benefit under Section 49 of the Labour Relations Act
Declaration that the High Court has no jurisdiction over the listed judicial review and petition matters
The files are not before the court and the ELRC has no supervisory powers over the High Court, which is a court of the same status
Order revoking Gazette Notice No. 2911 of 27th March 2009
The Minister acted lawfully under Section 49 of the Labour Relations Act; in any event the Notice had already been replaced by Gazette Notice No. 17449 of 28th November 2012
Order for refund of agency fees and service charge deducted from Claimant's members
Follows from the refusal to revoke the Gazette Notice authorising the deductions
Order directing Registrar of Trade Unions to strike out sectoral words from the 3rd Respondent's constitution
Would infringe the freedom of association of the 2nd and 3rd Respondents and their members; the Claimant must compete for members
Order compelling the 2nd Respondent to sign a Recognition Agreement and negotiate a CBA
Recognition requires proof of a simple majority, which the Claimant has not demonstrated
Order setting aside/staying CBA RCA No. 142 of 2010
Overtaken by events; the CBA is part of the employees' terms and conditions and setting it aside would prejudice employees
Challenge to the 0.5% service charge deduction
Service charge is a term of the CBA between the 2nd and 3rd Respondents and the Claimant lacks locus standi to challenge an agreement it is not party to
Costs
Each party shall bear its own costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
We reiterate that this Court has exclusive jurisdiction to hear all disputes relating to labour and employment matters including this case.
We find that neither Article 40 nor 41 are infringed by Section 49 of the Act. It is our opinion that it is perfectly in order and there is nothing unconstitutional about a union charging a levy on non-members who benefit from its negotiated CBA.
Agency fees does not limit the right to freedom of association. It is a charge for a benefit.
We reiterate that service charge is a term in the CBA negotiated by the 2nd and 3rd Respondents and the Claimant has no locus standi to challenge the service charge clause in an agreement that it is not party to.
For these reasons the claim herein is dismissed. Each party shall bear its costs.
For the foregoing reasons and with tremendous respect to my brother and sister Judges on this Bench, I dissent on the issue of deduction of agency fees from the Claimant's members.
I further held that this provision does not apply in cases where an employee belongs to a rival trade union in the same sector. I find no reason to change my position on this matter.
Issues in the judgment
#The judgment internally lists MISC APPL. NO. 138 OF 2007 in the Statement of Claim but MISC APPL. NO. 138 OF 2009 elsewhere, and the background refers to Southern Palms as JR No. 138 of 2007; also Southern Palms recognition is given as Cause 120 of 2005 while its judicial review is JR 138 of 2007
The citation for Knox v Service Employees International Union is incompletely rendered as 'U.S. 310 (2012)' without the volume number
The judgment as printed is headed with case registration inconsistencies - it was a Statement of Claim re-registered as Petition No. 1964 of 2011 and then as Petition No. 5 of 2013, with parties referred to interchangeably as Claimant and Petitioner
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Hotels and Allied Workers Union v Attorney General & 6 others [2015] KEELRC 278 (KLR)", Case Analysis (2015). Petition No. 5 of 2013 (originally filed as Statement of Claim dated 21st November 2011, later registered as Petition No. 1964 of 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/278/eng@2015-11-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.