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ELRCOtherNot stated in the judgment text

Banking Insurance and Finance Union v SMEP Microfinance Bank Limited (Cause 890 of 2019) [2024] KEELRC 2370 (KLR)

Employment and Labour Relations Court
27 September 2024
4,333 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to recognise a trade union on stale numbers, ordering a Labour officer head count because employer-handled resignations that bypassed the union were irregular.

What this practically means

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Executive summary

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The Claimant, a registered trade union, sued the Respondent microfinance bank seeking declarations that it was entitled to union dues from 122 members and had attained a simple majority under section 54(1) of the Labour Relations Act, an order for deduction and remittance of outstanding dues, and an order compelling the Respondent to execute a recognition agreement within 30 days. The Respondent denied the union had attained simple majority, asserting that of the 158 recruited employees, 38 were managers, 28 had formally withdrawn, 15 had resigned from employment, one was dismissed and others' status was unclear, leaving only 78 active members out of 170 unionisable employees. The parties disposed of the matter by written submissions. The court framed a single issue: whether the Claimant had attained simple majority under section 54. It held that the purported withdrawals were irregular because the Respondent never forwarded resignation notices to the union as required by section 48(8), and that they appeared triggered by the Respondent's own letter to employees. However, given that nearly five years had elapsed since filing and the situation on the ground had changed, the court found it would be unfair to order remittance of dues for employees who may have left. Instead of making final orders on recognition and dues, it directed a Labour officer to conduct a head count of unionisable employees currently in the Respondent's employment and submit a report within 60 days, with the matter to be mentioned on 25th November 2024 for further directions. The court encouraged the parties to cooperate in recruitment and ultimately sign a recognition agreement. No costs order was made.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Claimant had attained the simple majority of unionisable employees as per section 54 of the Labour Relations Act to be recognised by the Respondent

Key legal issues

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01

Whether the Claimant union had attained a simple majority of unionisable employees under section 54 of the Labour Relations Act so as to be entitled to recognition

Holding

The court could not finally determine simple majority because the parties disputed the number of unionisable members (122 vs 78) and time had passed; a fresh head count by a Labour officer was ordered

Reasoning

The Respondent claimed 78 active members out of 170 unionisable employees, asserting the rest were managers, had withdrawn or exited employment. The Claimant maintained 122 out of 175 members, with withdrawals never served on the union as required by section 48(8). Noting the lapse of almost five years and changed circumstances, the court directed a head count to establish current unionisable numbers before making final orders on recognition and dues.

p. 8
02

Validity of the purported member resignations and withdrawals

Holding

The withdrawals were irregular because the Respondent never served resignation notices on the union as required by section 48(8), and they appeared triggered by the Respondent's own letter to employees

Reasoning

The court noted the union was unaware of the resignations at filing and only saw them in the response filed in 2022. It observed the sudden withdrawals followed the Respondent's letter of 27th November 2019 asking employees to confirm deductions, and relied on the Transfleet decision condemning failure to forward resignation notices to the union.

p. 8

Legal principles established

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  • An employer shall recognise a trade union for collective bargaining if it represents a simple majority of unionisable employees
  • An employer must forward a copy of any notice of union resignation he receives to the trade union, failing which purported withdrawals cannot defeat recognition
  • Non-compliance with sections 48(6) and (8) of the Labour Relations Act renders employer-mediated withdrawals irregular
  • Where membership numbers have become uncertain over time, the court may direct a Labour officer's head count before determining simple majority for recognition

Court orders

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  1. 1.That the Labour officer to conduct a head count of unionisable employees currently in the respondent's employment and submit a report to the Court within 60 days of this order to enable the court make final orders in respect of the dispute
  2. 2.That the matter be mentioned on 25th November, 2024 for further directions

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Act over trade union recognition and union dues disputes under the Labour Relations Act, No. 14 of 2007

Relief refused

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Declaration that the union is entitled to union dues from 122 members

Court found it unfair to order remission of dues for employees who may have left employment without an updated head count

p. 8

Declaration of simple majority and recognition under section 54(1) of the Labour Relations Act

Disputed membership numbers required a fresh head count by a Labour officer before the court can determine simple majority

Order directing the Respondent to enter into a recognition agreement within 30 days

Final orders deferred pending the Labour officer's report; parties instead encouraged to cooperate and ultimately sign a recognition agreement

p. 8

Costs of the claim

No costs order was made in the final directions

Costs

No costs order made; matter reserved for further directions

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

An employer, including an employer in the public sector, shall recognise a trade union for purposes of collective bargaining if that trade union represents the simple majority of unionisable employees.
p. 7Recognition threshold under section 54 of the Labour Relations Act
An employer shall forward a copy of any notice of resignation he receives to the trade union.
p. 8Employer's statutory duty to notify union of resignations
In conclusion I order that the Labour oficer to conduct a head count of unionisable employees currently in the respondent's employment and submit a report to the Court within 60 days of this order to enable the court make final orders in respect of the dispute.
p. 9Final orders - head count directive
The matter to be mentioned on 25th November, 2024 for further directions.
p. 9Final orders - mention date
If my advise would be sought, I would encourage the parties for the sake of industrial relations to cooperate in the recruitment by the claimant of unionisable employees and ultimately sign a recognition agreement
p. 8Court's encouragement of parties to ultimately sign a recognition agreement

Issues in the judgment

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minor

Paragraph 51 contains a drafting error, stating the court considered 'the issues for determination' where the sentence appears to intend 'noted the issues for determination'

material

The parties dispute the number of unionisable employees - Respondent pleads 170 while the Claimant pleads 175 - and the court does not resolve the discrepancy

minor

Inconsistency in the number of agreed exclusions: the pleading records 38 employees agreed to be excluded as managers, while the Claimant's submissions refer to 37

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, "Banking Insurance and Finance Union v SMEP Microfinance Bank Limited (Cause 890 of 2019) [2024] KEELRC 2370 (KLR)", Case Analysis (2024). Not stated in the judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2370/eng@2024-09-27

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