Kenya Engineering Workers Union v Real Labour Solutions & another

thereafter forwarded their duly completed check-o forms to the Respondents. The Claimant further states that, upon following up in January 2025, the 2nd Respondent’s Human Resource Manager acknowledged that the 1st Respondent had received the forms. 3. Sometimes later, in January, March and April 2025 the Claimant recruited an additional 22 of the 1st Respondent’s employees and correspondingly forwarded their check-o forms in April 2025. According to the Claimant, despite being served with the check-o forms, the Respondents declined or refused to deduct and remit the union dues as required under section 48 of the Labour Relations Act. The Claimant contends that this refusal prompted it to report a trade dispute reference No. MLSP/ LD/IR/13/2/2025, which did not bear any fruit. The Claimant avers that this was due to the fact that the 1st Respondent denied having a recognition agreement with it, resulting in the issuance of a certicate trade dispute recommending that the 1st Respondent eects deductions and remits union dues. 4. Against that background, the Claimant urges the Court to allow the claim, contending that the Respondents’ refusal to deduct and remit union dues amounted to a breach of the mandatory provisions of section 48 of the Labour Relations Act. It further contends that the Respondents’ conduct violated its members’ constitutional rights under Articles 27, 36, 41 and 47 of the Constitution, relating to equality and freedom from discrimination, freedom of association, fair labour practices and fair administrative action, respectively. 5. The 1st Respondent opposed the claim through a Response to the Memorandum of Claim dated 6th February 2026. It generally denied the allegations contained in the Memorandum of Claim and put the Claimant to strict proof thereof. It consequently urged the Court to dismiss the claim with costs. 6. The 2nd Respondent similarly opposed the claim through a Response to the Memorandum of Claim dated 21st November 2025. It denied the allegations and put the Claimant to strict proof. In particular, it denied the existence of a valid Recognition Agreement pursuant to Kisumu ELRC Cause No. 74 of 2013, as alleged by the Claimant. It further denied that any of its employees had been recruited by the Claimant or that it had received any check-o forms. The 2nd Respondent also denied any involvement in the alleged trade dispute and maintained that it had never been engaged by the Claimant on the issue of recognition. It therefore contended that the Memorandum of Claim disclosed no reasonable cause of action against it and that the reliefs sought were misconceived, legally untenable and without merit. It accordingly urged the Court to dismiss the claim with costs. 7. The matter was heard on various dates between 19th May 2026 and 21st July 2026. Upon conclusion of the hearing, parties led written submissions. Claimant’s Submissions 8. 9. In support of the suit the Claimant identies the following issues for determination: a. Whether the check-o forms were served; b. Whether the Claim against the two Respondents is properly before the Court and against the proper parties; c. Whether the prayers sought are merited and grantable; and d. Who should pay union dues arrears and eect the deduction and remittance. On service of the check-o forms, the Claimant submits that they were duly served. It highlights the fact that the Respondents did not dispute service but rather pointed to the absence of a recognition https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2504/eng@2026-09-23 2

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agreement as the reason for failure to deduct union dues. It urges the Court to be guided by pages 17 and 18 of the Conciliator’s report which recommends that the Respondents eect deduction and remittance of union dues. 10. On whether the claim is properly before Court, the Claimant submits that it is. They assert that the conciliation process was concluded and a certicate of unresolved dispute issued pursuant to section 69 of the Labour Relations Act. They further submit that the two Respondents are employers of the Claimants’ members within the meaning of section 2 of the Employment Act. It asserts that under section 54 of the Labour Institutions Act an entity in whose premises an employee works is also deemed an employer jointly with the immediate employer. The Petitioner cites this court’s decision in Kenya Engineering Workers Union v Morals Business Consulting Limited and Rock Industries [2026] KEELRC 2109 (KLR) for that proposition and urges the Court to nd both Respondents collectively responsible. 11. On the prayers sought the Claimant submits that they are merited. It urges the Court to order the Respondents to jointly eect deduction and remittance of union dues on the basis of section 48 of the Labour Relations Act and Kenya Private Security Workers Union v Fargo Couriers Limited [2023] KEELRC 265 (KLR), in which the court made similar orders. 12. On costs the Claimant urges the court to award Kshs 300,000/-. On the prayer for a declaration that the Respondents’ refusal to deduct and remit union dues was unfair and unlawful, the Claimant submits that the refusal violated the mandatory provisions of sections 36, 41, 47 and 48 of the Labour Relations Act, as well as Article 41 of the Constitution. On the claim for arrears of union dues, the Claimants submit that the check-o forms covered 33 members and that the applicable Gazette Notice provided for union dues at 2% of basic salary. Using a minimum basic salary of Kshs. 18,047/-, they calculate the monthly union dues at Kshs. 11,911/- and COTU (K) dues at Kshs. 4,950/-. For the period from February 2025 to September 2026, being 19 months, they claim Kshs. 226,309/- as union dues and Kshs. 94,050/- as COTU (K) dues, totalling Kshs. 320,359/-. It relies on the Gazette Notice annexed at pages 14 and 15 and the Conciliator’s Report at pages 16 to 18 of the Memorandum of Claim. They further rely on Kenya Engineering Workers Union v Crom Impex (K) Limited [2023] KEELRC 2138 (KLR). 13. On who should pay the union dues arrears and eect the deduction and remittance, the Claimants submit that the Respondents should bear collective responsibility pursuant to section 54(1) of the Labour Institutions Act. Accordingly, the Claimant urges the Court to nd the Claim merited and allow the prayers sought. 1stRespondent’s Submissions 14. On its part the 1st Respondent identies the following issues for determination: i. Whether a Recognition Agreement, or any agreement whatsoever, exists or has ever existed between the Claimant and the 1st Respondent capable of founding an obligation to deduct and remit trade union dues; ii. Whether the 1st Respondent can lawfully be compelled to comply with Sections 48 and 54 of the Labour Relations Act, 2007, on the strength of an arrangement to which it is a stranger; iii. Whether the Claimant has discharged the legal burden of proving its case against the 1st Respondent; and https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2504/eng@2026-09-23 3

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iv. Who should bear the costs of the suit. 15. On the rst issue, the 1st Respondent submits that it has never had a Recognition Agreement with the Claimant. It contends that the negotiations for recognition were between the Claimant and the 2nd Respondent. It draws attention to Kisumu ELRC Cause No. 74 of 2013, relied upon by the Claimant, and points out that the proceedings in that matter involved the Claimant and the 2nd Respondent. Relying on sections 107 and 109 of the Evidence Act, the 1st Respondent submits that the Claimant has failed to prove the existence of a Recognition Agreement between itself and the 1st Respondent. 16. On the second issue, the 1st Respondent submits that it cannot be compelled to assume obligations arising from a contract to which it was not a party. It therefore contends that any statutory obligation relating to recognition of the Claimant or operation of a check-o system cannot be imposed upon it merely by virtue of its joinder to these proceedings. In support of this position, it relies on Savings & Loan (K) Limited v Kanyenje Karangaita Gakombe & another [2015] eKLR, where the Court held that a contract cannot confer rights or impose obligations upon persons who are not parties to it. It also relies on Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847, which similarly underscored the doctrine of privity of contract. The 1st Respondent further submits that the Claimant has neither pleaded nor proved any exception to the doctrine of privity. It points out that no agency relationship has been pleaded between the 1st and 2nd Respondents in relation to union recognition. It also relies on the doctrine of separate legal personality as enunciated in Salomon v Salomon & Co Ltd [1897] AC 22, submitting that an incorporated company is a legal person distinct from any other company or person, regardless of the relationship between them. 17. Flowing from the foregoing, the 1st Respondent submits that the Claimant has failed to discharge the burden of proving its case against it. It maintains that the evidence of its witness remained uncontroverted and therefore urges the Court to nd that no basis has been established for imposing liability upon it. On costs, the 1st Respondent urges the Court to award it costs on the basis that it was drawn into litigation concerning an agreement to which it was never a party. It consequently urges the Court to dismiss the claim. 2ndRespondent’s Submissions 18. 19. The 2nd Respondent identies the following issues for determination: i. Whether an employer-employee relationship existed, or exists, between the 2nd Respondent and the aected employees; ii. Whether the Claimant proved that the 2nd Respondent received the check-o forms it relies upon; iii. Whether a valid and subsisting Recognition Agreement exists between the Claimant and the 2nd Respondent; and iv. Whether the Claimant is entitled to the reliefs sought against the 2nd Respondent, and who should bear the costs. On the rst issue, the 2nd Respondent submits that no employer- employee relationship existed between the aected employees and the 2nd Respondent. It asserts that the Claimant’s own pleadings identied the aected employees as the 1st Respondent’s employees and, consequently, the obligation to deduct and remit union dues, if any, lies with the 1st Respondent. It argues that the Claimant cannot simultaneously plead that the 1st Respondent is the employer and seek orders against the 2nd https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2504/eng@2026-09-23 4

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Respondent for obligations arising from that employment. It further submits that the place where an employee works does not determine the identity of the employer; rather, the relevant considerations include who recruited, paid, controlled and maintained the employee’s records. Reliance is placed on Omusamia v Upperhill Springs Restaurants [2021] KEELRC 3 (KLR), which underscored that the existence of a contract of service is determined, among other factors, by the provision of personal service for remuneration, the employer’s control over the work and compliance with the statutory provisions concerning employment. It contends that none of these factors was established in relation to the 2nd Respondent, there being no appointment letter, evidence that it recruited or paid the aected employees, or evidence that it maintained their employment records. 20. The 2nd Respondent further submits that its relationship with the 1st Respondent was governed by a written Contract for the Provision and Management of Temporary/Casual Manpower, constituting an independent contractor arrangement. It relies on clauses 3.12, 3.13, 3.5 and 3.15 of the agreement, which, respectively, placed responsibility for workers’ union and labour matters, payment of wages, maintenance of employee les and employee claims upon the 1st Respondent. In view of the foregoing the 2nd Respondent submits that the 1st Respondent was an independent contractor. It relies on Kenya Hotels & Allied Workers Union v Alfajiri Villas (Magufa) Ltd [2014] eKLR, where it was held: “ ...An independent contractor's contract, in my view is a contract of work (contract for service) and not a contract of service, or to use ordinary language a contract of employment. The hallmarks of a true independent contract are that the contractor will be a registered taxpayer, will work his own hours, runs his own business, will be free to carry out work for more than one employer at the same time, will invoice the employer each month for his/ her services and be paid accordingly and will not be subject to usual "employment" matters such as the deduction of PAYE (tax on income), will not get annual leave, sick leave, 13th Cheque and so on..." 21. The 2nd Respondent further submits that the Claimant admitted at trial that none of the aected employees had contracts of employment with the 2nd Respondent. Relying on Synergy Industrial Credit Limited v OxyplusS International Limited & 2 others [2021] KESC 13344 (KLR), it submits that admissions may arise from pleadings, correspondence, documents or oral evidence and are binding upon the party making them. It further relies on section 107 of the Evidence Act and asserting that the burden of proving the alleged employment relationship rested upon the Claimant. Citing Casmur Nyankuru Nyaberi v Mwakikar Agencies Limited [2016] eKLR, it asserts that the Court must satisfy itself as to the existence of an employment relationship and that, although certain evidential burdens may shift to an employer, the Claimant remains under an obligation to prove its case. 22. On the second issue, the 2nd Respondent submits that the Claimant failed to prove that the check-o forms were served upon or received by it. It denies having received the forms and contends that the Claimant did not establish its assertion that the forms were forwarded to the 1st Respondent “through” the 2nd Respondent. It further points out that section 48(3) of the Labour Relations Act, 2007 requires service of the prescribed Form S upon the employer and submits that no such proof was produced. 23. On the third issue, the 2nd Respondent submits that there was no valid and subsisting Recognition Agreement between it and the Claimant. It contends that the Claimant’s mere reference to the judgment in Kisumu ELRC Cause No. 74 of 2013, without producing the judgment or the alleged agreement, does not establish a Recognition Agreement binding upon the 2nd Respondent. The 2nd Respondent further submits that, although recognition under section 54 of the Labour Relations Act and deduction of union dues under section 48 constitute distinct statutory regimes, that distinction does not assist the Claimant because it has failed to establish either an employment relationship or https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2504/eng@2026-09-23 5

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a valid Recognition Agreement with the 2nd Respondent. It further points out that the Recognition Agreement produced in the Supplementary List of Documents was dated 24th June 2016 and, by its terms, expired approximately twelve months later. No extension or subsequent agreement was produced. 24. On the last issue, the 2nd Respondent submits that the Claimant is not entitled to any of the reliefs sought against it, having failed to establish an employment relationship, service of the check-o forms or a valid recognition agreement. It contends that an order compelling it to deduct and remit union dues from wages it did not pay, in respect of persons it did not employ and on the basis of forms it did not receive, would have no evidential or statutory foundation under section 48 of the Labour Relations Act. 25. The 2nd Respondent further submits that the monetary gures pleaded in paragraph 4.2 of the Memorandum of Claim were neither particularised nor proved against any obligation attributable to it. On costs, it relies on Rai & 3 others v Rai & 4 others (Petition No. 4 of 2012) [2014] KESC 31 (KLR), where the Supreme Court held that costs follow the event and that their award is discretionary. It consequently urges the Court to dismiss the suit with costs. Disposition 26. The dispute herein relates to employees who are members of the Claimant. The Respondents have an arrangement which is in appearance an outsourcing agreement. Where an employee is employed to oer services on the premises of another, the character and nature of the engagement go towards determining the control aspects which would infer employment. In the case of the employees, they are employed by the 1st Respondent to oer services at the 2nd Respondent. The 2nd Respondent meets the salaries of the employees through the 1st Respondent. The employees when on the premises of the 2nd Respondent are under the direct control and supervision of the 2nd Respondent as they work in a steel manufacturing/processing plant. In the mind of the Court the two Respondents are employers of the Claimants’ members within the meaning of section 2 of the Employment Act. The Claimant and the 2nd Respondent have a Recognition Agreement dated 24 June 2016. The Court takes judicial note that through the decision of the Court issued in Mombasa, the Respondents were required to eect union dues deductions. The check o forms were presented to the 2nd Respondent and the deductions were required to be eect as per the directions of the employees. No deductions were made. It does not aid the 1st Respondent to pretend to be a stranger as all deductions are made by it and remitted to the authorities in respect of the employees including, but not limited to PAYE and other obligations. 27. The claim before the Court is merited as union dues were never deducted despite the Claimant having met the criteria for having the sums deducted and forwarded. The Conciliator in the report presented to Court also indicated the sums were to be deducted and paid. Despite this, the Respondents failed and refused to eect deductions. In the nal result the Court enters judgment against the Respondents jointly and severally as follows: 1. A declaration do and is hereby issued that the 1st and 2nd Respondents refusal to deduct and remit union dues is unfair and unlawful; 2. An order do hereby issue directing the Respondents to pay, from their own resources, the undeducted union dues from the date of service of the checko forms, being January 2025 until April 2025, comprising Kshs. 59,939/- in union dues, Kshs. 10,958/- and Kshs. 16,416/- in COTU (K) dues, and Kshs. 16,039/- monthly, continuing until satisfaction of this judgment; https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2504/eng@2026-09-23 6

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3. Costs of the suit; and 4. Interest at court rates on the sums in 2 above from the date of judgment till payment in full. 5. A ne of Kshs. 100,000/- to be paid by the Respondents to Court within 14 days of today for breach of section 48 of the Labour Relations Act. It is so ordered. DATED AND DELIVERED AT KISUMU THIS 23RD DAY OF SEPTEMBER 2026 NZIOKI WA MAKAU, MCIArb. JUDGE https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2504/eng@2026-09-23 7

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