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ELRCDismissedNot stated in the judgment

Banking Insurance & Finance Union [Kenya] v Fortune Sacco Society Limited (Cause E783 of 2023) [2025] KEELRC 1184 (KLR)

Employment and Labour Relations Court
28 April 2025
1,508 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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The Claimant trade union, which had a recognition agreement with the Respondent employer executed on 4th October 2002 and a collective bargaining agreement covering 1st January 2020 to 31st December 2023, sued after the Respondent refused to deduct and remit trade union dues for 89 newly recruited Employees. The Claimant invoked Section 48para 3 of the Labour Relations Act and a ministerial order in gazette notice number 516 of 2009. The Respondent contended that the 89 Employees had voluntarily resigned from the union, eroding its simple majority and frustrating the recognition agreement, and sought dismissal of the claim. The matter was determined on the pleadings, affidavits and submissions. The court held that the recognition agreement and collective bargaining structures were not frustrated, that the Claimant remained the sole recognized collective bargaining agent, and that there was no rival union. However, under Section 48para 6, an employer may not deduct dues from an Employee who has notified resignation, and there was no evidence from the Employees denying resignation or compulsion. Ordering arrears would risk unlawful deductions under Section 19 of the Employment Act. The court also found that Section 49para 5 entitles the union to agency fees from non-members enjoying CBA benefits, but agency fees were unpleaded and no ministerial order under Section 49para 1 on agency fees was shown, leaving the Claimant liberty to file a fresh claim. Complaints of intimidation and victimization failed for want of evidence from the affected Employees. The claim was declined with no order on costs. Judgment delivered at Nairobi on 28th April 2025 by James Rika, Judge.

Questions the Court framed

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

  1. 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. 2.Whether the recognition agreement and collective bargaining structures were frustrated by the Employees' resignations
  3. 3.Whether the Claimant's grievances over threats, intimidation, victimization and discrimination were established

Key legal issues

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01

Obligation to deduct and remit trade union dues for the 89 recruited Employees

Holding

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

Reasoning

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.

p. 3
02

Effect of resignations on the recognition agreement

Holding

The recognition agreement and collective bargaining structures were not frustrated by the resignations; the Claimant remains the sole recognized collective bargaining agent

Reasoning

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.

p. 3
03

Agency fees for resigned and non-union members

Holding

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

Reasoning

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.

p. 4
04

Alleged intimidation, victimization and discrimination of Employees

Holding

Not established for want of evidence from the affected Employees

Reasoning

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.

p. 4

Legal principles established

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  • 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

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  1. 1.The claim is declined
  2. 2.The Claimant, if need be, can file a fresh claim for agency fees
  3. 3.No order on the costs

The bench

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

majority

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

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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

p. 3

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

p. 4

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

p. 4

Costs

No order on the costs

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.

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.
p. 4Final orders and disposition
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.
p. 4Employer's obligations on dues and agency fees
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.
p. 3Effect of resignation notice on dues deduction
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.
p. 4Anti-free-riding principle

Issues in the judgment

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minor

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

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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 & 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.