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Strength in numbers: The way forward in collective bargaining agreements

The upsurge in the number of strikes called in recent times by various cadres of workers, including teachers, doctors, nurses, and lecturers, has witnessed a common thread – an outcry for the implementation of Collective Bargaining Agreements (CBAs) between the workers and their respective employers. This has caused a natural spike in the Kenyan public’s interest in the concept of a CBA – what it is, what it entails, and what its implementation means for both the workers and the employers.

What is a CBA?

The concept of collective bargaining is entrenched in the Constitution of Kenya under Article 41 which provides for rights relating to labour relations, including the right to fair labour practices, the right to reasonable working conditions, the right to join and participate in the activities of a trade union and the right to go on strike. Article 4(d) specifically provides for collective bargaining on terms that, “every trade union, employers’ organisation, and the employer has the right to engage in collective bargaining.”

Section 2 of the Labour Relations Act, 2007 (the Act) defines a “collective agreement” as a written agreement concerning any terms and conditions of employment made between a trade union and an employer, group of employers, or organisation of employers. On the other hand, a “recognition agreement” is defined as an agreement in writing made between a trade union and an employer, group of employers or employers’ organisation regulating the recognition of the trade union as the representative of the interests of unionisable employees, employed by the employer or by members of an employers’ organisation.

Ordinarily, the employer first enters into a recognition agreement with the trade union to recognise the trade union for purposes of collective bargaining. The recognition agreement has to be in writing, in line with the provisions of section 54(3) of the Act and it sets out the terms upon which the employer recognises a trade union. Thereafter, the employer and the trade union may negotiate and enter into a CBA which sets out the terms and conditions of employment of the workers.

Simply put, the recognition agreement is the initiating document that provides the enabling environment for trade unions and employers to enter into a CBA. A CBA covers a number of issues affecting the employees concerned, including; hours of work, salaries payable percentages of salary increments, promotions of the employees and the process to be followed in case of termination of their services including redundancy.

Legal Effect of a CBA

Section 59(5) of the Act provides that a CBA becomes enforceable and shall be implemented upon registration by the Employment and Labour Relations Court (ELRC) and shall be effective from the date agreed upon by the parties. Registration of a CBA with the ELRC is therefore a mandatory requirement for it to be legally valid and enforceable. This is the main issue that plagued the 2016/2017 doctors’ strike where doctors in the public sector were seeking a three hundred percent (300%) pay increase pursuant to a CBA between the doctors’ union and the Ministry of Health on behalf of the Kenyan Government. The Government’s position was that the CBA had never been registered with the ELRC and was therefore unenforceable.

The Act further provides that once a CBA is signed, it becomes binding on the parties to the agreement, for the period of the agreement, while the terms of the CBA are incorporated into the employment contracts pursuant to the provisions of section 59(3) of the Act.

For example, during the recent doctors’ and nurses’ strikes, issues of promotions and allowances took center stage and the case advanced in support by the unions was that these were matters covered under the respective CBAs and ought therefore to be implemented as part and parcel of the employment contracts.

Applicability and Relevance

Due to changing circumstances in the world of business and financial constraints in the current world economy, many private companies have been re-structuring their businesses and cutting back on the number of employees that they maintain. As a result, there is a marked increase in the number of terminations of employment, on account of redundancy.

The challenge that these companies are facing in carrying out the redundancy processes is that whether out of omission or commission, they often times do not comply with the prescribed procedures set out in the CBA. Matters such as giving the concerned union at least one (1) month’s notice before effecting a redundancy process and the fact that the company usually has to consider compensating the employees for the number of years served for example, are issues that companies do not always take into consideration.

The concerned employees end up suing the company, whether as individuals or through their unions and the ELRC has not hesitated to apply the provisions of the Act, by finding that the terms of the CBA are binding and ought to be implemented.

Court Decisions

There have been several key decisions handed down by the ELRC in connection with CBAs. In the case of Kenya Plantation & Agriculture Workers Union v Coffee Research Foundation (2014) eKLR the Union brought that claim on behalf of ten (10) Claimants who were the Respondent’s security guards. Here, the ten (10) Claimants had worked for the Respondent for periods exceeding five (5) years, during which the Respondent had concluded a CBA with the Union. The CBA contained a thirteen percent (13%) wage increment for each year and benefits including termination benefits under the retrenchment clause, which the Respondent chose to ignore when it terminated the Claimants’ services. The ELRC found that the Respondent had discriminated against the Claimants and ordered the implementation of the CBA with respect to pay in arrears underpayment of wages and pay of redundancy benefits.

In Kenya Union of Commercial Food and Allied Workers v Kenya National Library Service (2016) eKLR, the Respondent had concluded a CBA with the Claimant union but the Respondent had partly implemented the CBA by paying new salaries, allowances, and part of the arrears. The balance that was left unpaid, it was argued by the Respondent, was an amount that had been factored into the Respondent’s 2014/2015 budget submitted to the parent Ministry, but no funds had been availed to enable the Respondent to implement the CBA. It was the Respondent’s defence therefore that they had not refused to fully implement the CBA but that its hands were tied by the unavailability of funds from the National Treasury.

The ELRC was unimpressed and held that once a CBA has been registered, as was the case in the claim before it, section 59(5) of the Act had already taken effect and therefore the CBA was binding and enforceable and failure to implement any part of the CBA gave the wronged party a remedy of specific performance. The ELRC further held the view that since the Respondent was claiming inability to pay due to acts of a third party, nothing prevented it from joining any such party/parties to the case for them to bear responsibility for the owing dues. In the upshot of its decision, the ELRC entered Judgment for the Claimant against the Respondent for specific performance of the terms of the CBA.

Cases such as the above set strong precedents for the notion that there are no shortcuts to implementing a CBA.

Way Forward?

Public bodies and private entities alike ought to appreciate that collective bargaining is a constitutionally guaranteed right, duly entrenched under the Bill of Rights and that there can be no avoiding of CBAs. All parties ought to be keen at the negotiation table of CBAs so that they fully understand what they are binding themselves to. If any terms seem complex or difficult to decipher, it is advisable to consider seeking legal advice on the same so that those provisions are well interpreted and understood by the parties prior to agreeing to the same.

Employers also need to consider the long-term financial effects of CBAs before negotiation and execution, as it is no defense to blame a third party for non-compliance with a CBA. Unions also need to be aware of the necessary steps to be taken to ensure that a CBA is legally valid and enforceable, so as not to become unstuck at the crucial time of agitating for implementation of the CBA.