Banking Insurance & Finance Union [Kenya] v Fortune Sacco Society Limited (Cause E783 of 2023) [2025] KEELRC 1184 (KLR)
The bottom line
#The Employment Court dismissed a trade union's claim for dues from 89 employees who had resigned, but the union may still claim agency fees in a fresh suit.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Respondent was obliged to deduct and remit trade union dues to the Claimant in respect of the 89 newly recruited Employees
- 2.Whether the recognition agreement and collective bargaining structures were frustrated by the Employees' resignations
- 3.Whether the Claimant's grievances over threats, intimidation, victimization and discrimination were established
Key legal issues
#Obligation to deduct and remit trade union dues for the 89 recruited Employees
The obligation failed because the Employees' resignations triggered Section 48para 6 of the Labour Relations Act, and there was no evidence denying or contradicting the resignations
The parties had a subsisting recognition agreement and collective bargaining structures not frustrated by operation of the law, and a ministerial order (gazette notice number 516 of 2009) authorized deductions. However, under Section 48para 6 an employer may not deduct dues from an Employee who has notified resignation. The Respondent exhibited resignation letters, and no evidence from the Employees denied resignation or compulsion. Ordering deduction of arrears would therefore risk an unlawful deduction under Section 19 of the Employment Act.
Effect of resignations on the recognition agreement
The recognition agreement and collective bargaining structures were not frustrated by the resignations; the Claimant remains the sole recognized collective bargaining agent
The recognition agreement of 4th October 2002 and the CBA covering 1st January 2020 to 31st December 2023 remained in place. There was no rival trade union claiming representation, and the Claimant had not been de-recognized by court order or National Labour Board directive. Fresh recruitment in 2020 was to sustain numbers, not to open a fresh recognition dispute. The recognition agreement thus survived the individual resignations.
Agency fees for resigned and non-union members
Section 49para 5 entitles the union to agency fees from non-members benefiting from the CBA, but the claim failed because agency fees were not pleaded and no ministerial order under Section 49para 1 was shown
The court explained that free-riding is not encouraged and that the trade union must be compensated by non-members as well as members. Resigned employees cannot shed burdensome dues while enjoying benefits crafted by the union. However, the Claimant pleaded only trade union dues, and the ministerial order in gazette notice number 516 of 2009 relates to dues, not agency fees. Without a ministerial order under Section 49para 1 on agency fees, the court could not direct such deductions, though a fresh claim may be filed.
Alleged intimidation, victimization and discrimination of Employees
Not established for want of evidence from the affected Employees
The Claimant alleged that the Respondent threatened to dismiss or fail to renew contracts of recruited Employees. The court held that such complaints needed direct viva voce or affidavit evidence from the affected Employees themselves, which was not placed on record. The claim on this head therefore failed as unproven.
Legal principles established
#- An Employer may not make a deduction from an Employee who has notified the Employer of resignation from the trade union; the notice takes effect from the month it is shown to have been given
- The law does not encourage free-riding; an Employer must deduct dues for members and agency fees for non-members benefiting from a collective bargaining agreement
- Section 49para 5 compels deduction of agency fees from Employees who recant union membership but continue to enjoy a collective bargaining agreement
Court orders
#- 1.The claim is declined
- 2.The Claimant, if need be, can file a fresh claim for agency fees
- 3.No order on the costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over the employment dispute as pleaded in the Statement of Claim dated 28th September 2023
Relief refused
#Deduction and remittance of trade union dues in respect of the 89 Employees, including arrears from July 2023
Employees may well have voluntarily resigned; ordering deduction would expose the Respondent to an unlawful act under Section 19 of the Employment Act
Permanent injunction restraining harassment, intimidation, victimization, discrimination or termination of Employees' contracts
The complaints were not supported by viva voce or affidavit evidence of the affected Employees
Agency fees from non-union members
Agency fees were not pleaded and no ministerial order under Section 49[1] with respect to agency fees was shown
Costs
No order on the 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.
It is Ordered: a. The claim is declined. b. The Claimant, if need be, can file a fresh claim for agency fees. c. No order on the costs.
An Employer has an obligation to deduct and remit trade union dues with regard to members, and deduct and remit agency fees, with regard to non-union members, who are beneficiaries of the collective bargaining agreement in place.
The law under Section 48 [6] of the Act, is that an Employer may not make deduction from an Employee who has notified the Employer of his resignation from the trade union.
The Employees who resigned cannot be rid of what they consider as burdensome trade union dues, while free-riding and enjoying benefits crafted by the Claimant Union.
Issues in the judgment
#The judgment inconsistently states the gazette notice year for the ministerial order, referring to gazette notice number 516 of 2009 in some passages and of 2016 in another
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Banking Insurance & Finance Union [Kenya] v Fortune Sacco Society Limited (Cause E783 of 2023) [2025] KEELRC 1184 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1184/eng@2025-04-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.