https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1781

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT** **AT NAIROBI** *(Before Hon. Lady Justice Monica Mbarũ)* **CAUSE NO. 169 OF 2017** **BANKING, INSURANCE AND** **FINANCE UNION (KENYA) CLAIMANT** *VERSUS* **CITI BANK, N.A. RSPONDENT** **JUDGMENT (TWO)** **Background** A background to this second judgment is necessary (Judgment Two). On **28 July 2022**, the court delivered judgment herein following a claim by the claimant seeking deduction and remittance of agency fees from the respondent with regard to insurance employees enjoying a CBA negotiated with the Kenya Bankers Association (KBA), of which the respondent is a member. The respondent asserted that it has no unionisable employees or members of the claimant since all were in management. The court, in analysing the issues before it, held that, to determine the issues in controversy, it was necessary to establish whether the employees are unionisable within the respondent’s establishment. The court directed that the Labour Commissioner appoint a Labour Officer to conduct an on-site analysis within the respondent’s establishment. Following the judgment, the due report was filed on **31 October 2024.** Based on the report, the respondent filed an application dated 18 December 2024 seeking to reopen the matter and leave to file additional evidence. The basis was the findings in the report dated 31 October 2024, in which the respondent found it necessary to adduce additional evidence regarding its internal policy on corporate grading. In the alternative, the respondent sought to file witness statements and supplementary written submissions following the report submitted. The rationale was that the report dated 31 October 2024 had established that the respondent's employees at the shop were unionisable. In a ruling delivered on **6 March 2025**, the court analysed the report submitted to the court, the application by the respondent and held that, indeed, the job evaluation was ordered by the court *suo moto*, the respondent operated a unique business model, and it was a reasonable conclusion that when the job analysis was undertaken, the parties had not contextualised all the issues. The issues required further interrogation by the court. The court reopened the case and granted the parties leave to file witness statements and supporting **documents *on the specific issue of the respondent’s business model and job grading structure.*** **Minister’s Report** As directed by the court on 28 July 2022, the Labour Commissioner, through a report dated 31 October 2024 under Albert Sakwa, Conciliator, established that the job analysis related to the following functions within the respondent: *“… the respondent’s grading structure has 13 levels, from CO4 (the lowest) to C16 (the highest). There are no employees in the Kenyan branches at the CO6, CO7, or CO8 levels. This, therefore, leaves the company with employees at 10 levels: CO4, CO5, CO9, CO10, C11, C12, C13, C14, C15, and C16.”* In analysing these roles, the conciliator established the following; 1. ***The main duties of employees in Job Groups CO4, CO5 and CO9 correspond to the duties of employees listed in the preamble of the CBA as Check Clerks, Clerical Staff, and Clerical Assistants & Copy Typists. These are therefore unionisable. These three job groups have a total of 34 employees, as per the provided staff establishment.*** 2. ***The duties in Job Group C10 correspond to the duties of employees listed in the preamble of the CBA as Section Heads (Supervisors). These employees are therefore also unionisable. This job group has a total of 29 employees, per the provided staff establishment.*** 3. ***The duties of some employees in Job Group C11 make them unionisable as they fall in the category of either Section Heads, Check Clerks, or Technical Staff. Employees who work as Treasury and Trade Solutions Program Analyst 1 (3 employees). Infrastructure Intermediate Technology Analyst (1 employee), CSIS Intermediate Security Officer (1 employee), Credit Maintenance Intermediate Analyst (2 employees), and Corporate Salesperson (1 Employee) are unionisable employees.*** On these findings, the respondent applied to reopen the matter to urge its case. The respondent filed the Further Witness Affidavit of Deris Mogi, the head of human resources, and avers that the respondent, as a regional office, serves both the East Africa and Sub-Saharan Africa regions for some key services, including onboarding, Citi Services, Credit Risk management services, an independent risk analysis unit, digital client support, and know your client. Several employees support these key regional services; hence, their roles are out of scope for consideration as unionisable. The respondent's main parent operates in over 100 countries worldwide. Given this outlook, several activities have been outsourced from Kenya and centralised in other countries, in line with the respondent’s global model. These activities have been outsourced to countries like India, the United Kingdom, Ireland, and Poland. The respondent also operates 2 branches in Kenya, one in Nairobi and the other in Mombasa, which serve only corporate and international clients. The respondent is the only corporate bank in Kenya. Mogoi avers that the respondent has 0% of its payment transactions made manually and has discontinued issuing cheques to its clients. It is in the process of winding down legacy products such as cash and cheques, starting with the Mombasa branch; hence, the Respondent's operating model underscores the bank's unique nature compared to other banks in Kenya. # Mogoi avers that the Respondent's internal job grading structure adopts Willis Towers Watson's Global Grading System, a job levelling methodology used to determine internal job levels by analysing universally applicable, culturally neutral factors that have been proven to recognise real differentiation in job size. The Citi Level (or C-Level) is the globally adopted job title level of a position. The Officer Title in the bank is tied to C-Level. It signifies an individual's hierarchical position within the organisation, indicating the level of responsibility and seniority associated with the roles. The Respondent's job grading structure classifies employees who are classified as Job Grade C10 and above as Management grades at the Respondent bank, and, as such, those Cadres of employees are automatically non-unionisable. The local bank's job grading structure includes employees in unionisable positions, such as Tellers and Clerical staff, who usually provide non-technical, routine support to the local bank's operations in Kenya. Respondent's employees, including Non-Officers and entry-level staff, provide complex and technical support regionally and to other countries in addition to Kenya. The unique model in place for the Respondent and the distinct complexities of these roles provide not only Kenya-specific support but also regional support to other countries. Due to the technical complexity and diversity of the roles they performed, these employees do not fall within the unionisable cadre of staff. The respondent submitted that it is a Branch of Citibank, N.A., which is a federally chartered National Banking Association, organised and existing under the laws of the United States of America. The direct parent for the Respondent is Citicorp, a Bank Holding Company organised and existing under the laws of the United States of America, which is ultimately owned by Citigroup, Inc., a public corporation listed on the New York Stock Exchange. The Respondent is the only commercial bank in Kenya that specialises in corporate banking. Under **Part XXXVII of The Companies Act (Cap. 486 of the Laws of Kenya),** a foreign company may apply for registration as a Branch in Kenya in accordance with that Part, and upon successful registration, the foreign company is issued with aCertificate of Compliance. The legal status of the Branch in Kenya is that it is an extension of the foreign company, with no separate legal identity, and its parent foreign company is directly liable for the Branch's actions. The Branch also remains governed by the foreign company's policies and constitutive documents and is largely controlled by the foreign company. Thus, the respondent submitted that in **Jane Wambui Weru v Overseas Private Inv. In Corp & 3 Others (2012) KEHC 1977 (KLR),** the Court held that the effect of the registration of a company under Part X of the Companies Act is to provide the foreign company with access to trade in the country. Such a company is not a distinct and separate legal entity from its mother company. In this regard, the respondent’s branches are legally regarded as the same entity as the parent/mother company. In this case, the Respondent is not separate from the parent entity; accordingly, the Respondent would rely on and adopt its parent entity's job grading structure. Under the job grading structure, employees in Job Grade C09 and above are considered management cadre employees, with a C09 employee being a Management Associate and a C10 employee being an Assistant Manager. Therefore, the roles are managerial in nature. The employees in Job Grade C09 and above are excluded from the unionisable cadre under the CBA and are therefore not eligible for the deduction of Agency fees. The job descriptions for Job Grade COS to C01 were all provided in the job descriptions; the roles go beyond what is provided for in the CBA, and therefore those employees cannot be considered unionisable as claimed by the Claimant herein. Neither the employees in Job Grade C09 and above nor any of the Respondent's other employees are unionisable and therefore are not eligible for Agency fees deductions. The respondent submitted that none of the Bank's employees benefits from or is covered by the terms and conditions of the CBA. Thus, no deduction of Agency Fees can be lawfully effected or claimed by the claimant. In Kenya Hotels and Allied Workers Union v Attorney General & 6 Others [2015] eKLR, the court held that agency fees are paid by employees who are unionisable but not unionised since they benefit from the CBA. In this case, no employee of the respondent benefits from the subject CBA. In the case of **Kenya Union of Journalists v Kenya Broadcasting Corporation & 3 Others (Petition E002 of 2022) [2023] KEELRC 1023 (KLR)** and **Kenya Union of Commercial Food and Allied Workers v Woolmatt Limited (Employment and Labour Relations Cause E033 of 2023) [2023) KEELRC 3375 (KLR)** the court held that deduction of Agency fees is applicable once it has been demonstrated that the affected employees are benefitting from the negotiated CBA terms. In this case, the claimant has not demonstrated that the respondent employees benefit from the CBA, thereby justifying a claim for agency fees. Under Article 41 of the Constitution, the right to unionise is secured. The freedom of association is aptly captured in Article 36 of the Constitution of Kenya. Article 36 (2). Section 4(1) (c) of the Labour Relations Act (LRA), the employee has the right to leave a trade union. Section 11 of the LRA places the burden of proof on *a party that alleges that a right or protection conferred by this part has been infringed to prove the facts of the conduct.* The Claimant in this suit has not proved or demonstrated that particular employees are benefiting from the terms of the CBA to warrant remittance of agency fees by the Respondent on their behalf. In **Forum for Good Governance and Human Rights v Teachers Service Commission (TSC) & 2 Others [2024] KEELRC 795 (KLR),** the Court in addressing the question of agency fees deduction held that the category of employees the subject of the Petition were public officers, including Labour Officers, DOSH Officers and other officers who perform statutory duties under the LRA, whose impartiality would be compromised by compulsion to remit agency fees for failure to join a Union due to the very nature of their statutory duties. In the judgment, the court recommended that rules be enacted pursuant to Section 83 of the LRA, setting out the parameters for the payment of agency fees and the employee cadres who should pay them. This recommendation is relevant to the present case. In the absence of rules guiding the parameters for deduction of agency fees, the Respondent ought not to be held liable for issues beyond its control. The claimant submitted that the Respondent has not provided the job grading structure for the Kenyan Bank/Branch. The Respondent has admitted that 50% of the staff population is out of scope for consideration as unionisable. This therefore leaves the other 50% of the staff population as unionisable grades. The Respondent is not the only bank in Kenya with a global presence. Bank of India, Standard Chartered Bank of Kenya, Habib Bank AG Zurich, Access Bank, Bank of Baroda, Absa Bank Kenya Plc and Ecobank, among others. These banks have unionisable employees under the CBA, and the same group of employees pay union dues or agency fees. In the era of Information Technology, all employees, whether management or unionisable, are computer literate; that does not mean all transactions are automated. The banking sector does not rely solely on manual payment transactions, nor do unionisable employees perform only manual transactions. There is nothing unique about Willis Towers Watson's Global Grading System, as it only provides a framework for comparing and evaluating jobs within an organisation to determine the relative value of a job, like any other job grading model. The claimant submitted thatthe respondent has admitted that CO-10 and above are management grades. It therefore goes without saying that employees in grades CO-9 to CO-1 are unionisable under the bank grading structure.According to the parties' recognition agreement, we may employ only management and unionisable staff employed by the respondent and/or any other bank in the industry. The summary responsibilities for management and entry-grade unionisable roles are not complex, unique, or technical in the banking sector, specific to the respondent only, or to other banks. **Determination** The fact of a CBA between the parties is not contested. The issue is the application of the subject CBA to the respondent's employees. On the one hand, the respondent asserts that it has a unique model for job grading, with distinct role complexities, not only in Kenya but also in regional support for other countries. Hence, the technical complexity and diversity of the roles performed by the employees do not fall within the unionisable cadre of staff. The claimant, on its part, submitted that, following the conciliator's job analysis, it was established that the roles undertaken are not unique to the respondent and are outlined in the CBA. There are unionisable employees, similar to those at other banks undertaking roles similar to the respondent's, and the due agency fee is deductible and remittable. As outlined above, the court directed a job analysis, which was done by the Conciliator and a report dated 31 October 2024 was issued. The claimant's claim concerns the payment of union dues and agency fees under the CBA applicable to the respondent's shop floor. Pursuant to section 59(5) of the LRA, the application of a CBA is secured upon the parties upon its registration. The rationale is that the parties to the CBA had the opportunity to negotiate its terms and conditions. Hence, upon registration with the court, the agreed terms and conditions are enforceable. It is a binding contract and regulates the shop floor. In **Kenya Plantation and Agricultural Workers Union v Rea Vipingo Limited & another [2026] KEELRC 1591 (KLR),** the court held that, once a CBA enters the shop floor, this forms the basic terms and conditions for all unionisable employees pursuant to sections 11(3), 13(5) and 26 of the Employment Act. In **Universities Academic Staff Union (Pwani University Chapter) v Pwani University; Universities Academic Staff Union (UASU) (Interested Party) (Petition E004 of 2023) [2023] KEELRC 2377 (KLR) (28 September 2023) (Judgment)**, the court held that once a CBA is negotiated and registered with the court under Section 59(5) of the LRA, it applies to all unionisable employees of the given employer. The provisions of the LRA are couched in mandatory terms and not left to the discretion of the parties or the court: *The Collective Bargaining Agreement becomes enforceable upon registration by the Court and shall be effective from the date agreed upon by the parties.* The court, now assisted by the Minister through the office and conciliator, has since entered the shop floor and applied the records with a job analysis. Within the realm of employment and labour relations, the Minister is the repository of expertise on work-related and labour relations. Within the tripartite, the Minister assists the court in fulfilling its mandate and distributing justice by providing this technical support. Within that mandate, the Conciliator undertook the job analysis. Neither party faults this report, save for the respondent's urging that its employees' jobs are unique, unlike those of other banks covered by the claimant and CBA. The roles held by employees have distinct role complexities, not only in Kenya but also in regional support for other countries. However, the subject CBA is registered in Kenya. The respondents have employees serving in their Kenyan branches. These employees are protected under Kenyan law, and the court's jurisdiction is acknowledged. The conciliator's report dated 31 October 2024 applies to the parties. The unionised employees of the respondent shall pay union dues. With regard to the right to association and the freedom to join a trade union of choice, the respondent has relied on the judgment in **Kenya Hotels and Allied Workers** **Union v Attorney General & 6 others [2015] eKLR**. However, the respondent has relied on the dissenting judgment and not the majority judgment. The bench emphasised that agency fees are lawful and valid pursuant to section 49 of the LRA. Indeed, every employee has the right to freedom of association and to fair labour relations; however, where a CBA is negotiated by a given trade union, such as the one the claimant has with KBA, that CBA becomes applicable to all unionisable employees on the shop floor. The rights of the employer and trade union in the context of deduction and remittance of agency fees are well addressed in **Kenya Hotels and Allied Workers Union v Hilton Hotel Nairobi [2022] KECA 69 (KLR).** The court held that under section 6 of the LRA, the employer has the freedom to confer and therefore negotiate with a trade union as a collective. Upon negotiation of the CBA, section 49 of the LRA applies to the members of the employers' confederation, such as KBA, which has brought together several entities, including the respondent. **A trade union that has concluded a collective agreement registered by the Industrial Court with an employer, group of employers or an employers’ organization, setting terms and conditions of service for all unionisable employees covered by the agreement may request the Minister to issue an order requiring any employer bound by the collective agreement to deduct an agency fee from the wages of each unionisable employee covered by the collective agreement who is not a member of the trade union.** In this regard, the court adopts the conciliator's recommendations as the final orders of the court in the following terms: 1. ***The main duties of employees in Job Groups CO4, CO5 and CO9 correspond to the duties of employees listed in the preamble of the CBA as Check Clerks, Clerical Staff, and Clerical Assistants & Copy Typists. These are therefore unionisable. These three job groups have a total of 34 employees, as per the provided staff establishment.*** 2. ***The duties in Job Group C10 correspond to the duties of employees listed in the preamble of the CBA as Section Heads (Supervisors). These employees are therefore also unionisable. This job group has a total of 29 employees, per the provided staff establishment.*** 3. ***The duties of some employees in Job Group C11 make them unionisable as they fall in the category of either Section Heads, Check Clerks, or Technical Staff. Employees who work as Treasury and Trade Solutions Program Analyst 1 (3 employees). Infrastructure Intermediate Technology Analyst (1 employee), CSIS Intermediate Security Officer (1 employee), Credit Maintenance Intermediate Analyst (2 employees), and Corporate Salesperson (1 Employee) are unionisable employees.*** The claim by the claimant that the respondent should compute and remit an agency fee at the rate of 1% of the unionisable employees' basic monthly salary is lawful and valid in view of the conciliator’s report and recommendations that the employees at the shop floor are unionisable. This relates to employees placed in Job Groups C04, C05, and C09 whose duties are analysed and form part of the unionisable employees under the subject CBA. Additionally, employees in Job Group C10 who serve as section heads or supervisors are unionisable. Also, those in Job Group C11, categorised as section heads, check clerks, or technical staff, are unionisable employees subject to the CBA between the claimant and KBA. Under sections 11(3), 13(5) and 26 of the Employment Act, the unionisable employees of the respondent should enjoy the terms under the CBA without differentiation. The respondent is bound under the terms of the CBA, and the unionisable employees of the respondent are at liberty to join the membership of the claimant, whereupon union dues shall be deducted instead of agency fees as required under section 49 of the LRA. Pending such unionisation, being unionisable, the respondent shall tabulate the agency fee due to the claimant from the date the CBA applied, vis-à-vis each employee's date of employment, and remit it to the claimant within the next 30 days. The rights under Article 41 of the Constitution, read together with the LRA, give the employees of the respondent the liberty to unionise under the claimant. Pending the unionisation, the agency fee is due. Regarding costs, the claim is on a good foundation, and the claimant is entitled to costs. **Accordingly, judgment is entered for the claimant against the respondent in the following terms:** 1. **The CBA between the claimant and KBA binds the respondent as a member thereof.** 2. **The employees of the respondent under Job Group C04, C05, and C09 and including C10 and C11 are unionisable employees.** 3. **The respondent shall tabulate agency fees from all unionisable employees as (a) above from the date of the CBA's effect and based on the date of employment. This shall be done within 30 days, and a report shall be rendered to the court thereof.** 4. **The claimant is awarded costs of the suit.** 5. **Mention for (c) above on 30 July 2026.** **Delivered in open court this 29th day of June 2026** **M. MBARŨ** **JUDGE** **In the presence of:** **Court Assistant: Samuel Maruga** **…………………………………… and …………………………………..…**