https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1661

Gardaworld Security (K) Ltd v Kenya Union of Special & Professional Guards & another (Cause E1267 of 2025) [2026] KEELRC 1661 (KLR) (18 June 2026) (Judgment) Neutral citation: [2026] KEELRC 1661 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Cause E1267 of 2025 CN Baari, J June 18, 2026 Between Gardaworld Security (K) Ltd Claimant and Kenya Union of Special & Professional Guards 1st Respondent Kenya National Private Security Workers Union 2nd Respondent Judgment Introduction 1.The Claimant lodged a Statement of Claim dated 11th December, 2025, and filed in Court on 17th December, 2025, where it seeks the following reliefs against the Respondents:i.A Declaration that the finding by the Conciliator that a Legal Notice relating to deduction of Agency Fees becomes redundant upon the lapse of a CBA, is erroneous, null and void.ii.A Declaration that the finding by the Conciliator that the Agency Order by the Cabinet Secretary for Labour and Social Protection is what authorizes the deduction of Agency Fees from employees who are not members of the Union that negotiated the CBA, is erroneous, null and void.iii.A Declaration that the finding by the Conciliator that the Claimant engaged in unfair labour practice by notifying the employees of the deductions to be made from their Salary is erroneous, null, and void.iv.A Declaration that the finding by the Conciliator that the Agency fees deducted from Unionisable employees was unlawful is erroneous, null, and void.v.An Order setting aside the Conciliator's recommendation that the Claimant should refund Agency Fees deducted from employees from August 2023 to date.vi.Costs of this claim. 2.The 1st Respondent filed a Statement of Response dated 19th February, 2026, denying the Claimant’s Claim. The 2nd Respondent did not participate in the suit. 3.The Claimant subsequently filed a Reply to the 1st Respondent’s Response dated 10th March, 2026. 4.Parties canvassed the Claim by way of written submissions, and submissions were received from both parties. The Claimant’s Case 5.The Claimant’s case is that by a letter dated 18th November 2025, the Chief Industrial Relations Officer appointed Ms. Grace Mweresa as a conciliator in a trade dispute lodged by the 1st Respondent. It avers that the dispute concerned allegations that it unlawfully deducted monies from employees’ wages under the guise of agency fees and remitted the same to KNPSWU without a valid agency fee order from the Cabinet Secretary for Labour as required under the Labour Relations Act. 6.The Claimant further contends that the 1st Respondent alleged that the deductions were unauthorized, unlawful, and contrary to Sections 4, 5, 48, 49, 50, and 82 of the Labour Relations Act, 2007, as read together with Section 19 of the Employment Act, 2007, and that the conduct amounts to collusion, unfair labour practices, and bad labour practice. 7.The Claimant further states that the parties to the conciliation filed their respective mediation memoranda and appeared before the Conciliator, where they presented their respective positions, and upon conclusion of the conciliation process, the Conciliator issued a Report and Certificate dated 4th December 2025 pursuant to Section 69 of the Labour Relations Act, confirming that the dispute had not been amicably resolved. 8.The Claimant avers that the Conciliator recommended that it immediately cease deducting 2% agency fees from employees who were not members of the 2nd Respondent in relation to the CBA signed on 24th August 2023 and registered as RCA No. 447 of 2023, in the absence of an order under Section 49 of the Labour Relations Act. 9.It states that the Conciliator further recommended that all deductions made since August 2023 be refunded within 30 days and further found that the continued deduction of the 2% agency fee was unlawful. 10.The Claimant further states that it is dissatisfied with and aggrieved by the findings and recommendations of the Conciliator, contending that the same lack both factual and legal foundation, are erroneous, and ought to be set aside by the Court. 11.It is the Claimant’s case that it entered into a Recognition Agreement with the 2nd Respondent on 3rd September 2007, and that subsequently, on 12th March 2018, they executed a Collective Bargaining Agreement (CBA) covering the period 2018–2022, which was registered before the Employment and Labour Relations Court as RCA No. 95 of 2018. 12.The Claimant further avers that the Cabinet Secretary for Labour and Social Protection later published Legal Notice No. 127 of 29th June 2021, directing the deduction and remittance of agency fees to the 2nd Respondent. It avers that pursuant to the said CBA, the Legal Notice, and the Court Order, it commenced the deductions. 13.The Claimant further avers that the CBA was subsequently renewed for the period 24th August 2023 to 24th August 2025 and registered by the Employment and Labour Relations Court on 19th October 2023 as RCA No. 447 of 2023. 14.The Claimant further states that it changed its trading name from Kenya Kazi Services Ltd to Gardaworld Security (K) Ltd, and that consequently, the parties executed an Addendum to the Recognition Agreement on 16th April 2025 to reflect the Claimant’s change of name. 15.The Claimant further states that Clause 30 of the CBA contained a transitional provision stating that upon expiry of the CBA, all terms and conditions of service would continue to apply until a new CBA was concluded. It avers that all unionisable employees continued to enjoy the benefits negotiated under the CBA pending negotiations for a successor agreement. The Claimant further states that it continued deducting and remitting agency fees to the 2nd Respondent in compliance with Legal Notice No. 127 of 2021, which had neither been revoked nor reviewed. 16.The Claimant further avers that the 1st Respondent subsequently recruited some of its employees into membership, and as a result, the Claimant notified the affected employees that deductions for union dues and agency fees would continue to be made and remitted to the 1st and 2nd Respondents, respectively. 17.The Claimant avers that the dispute herein arose from its continued deduction of agency fees, which deductions were challenged by the 1st Respondent. 18.The Claimant pleads that the Conciliator made erroneous findings in concluding that Legal Notice No. 127 of 2021 was not transferable to any subsequent CBA and that upon expiry of the CBA, the agency fee order became obsolete, redundant, and devoid of legal effect. 19.The Claimant contends that, as held by the Employment and Labour Relations Court in various decisions, the terms of a CBA become part of employees’ contracts of employment and therefore continue to apply even after the agreed term lapses, pending negotiation of a new CBA. 20.The Claimant further avers that both the CBA and the Legal Notice remained in force unless varied or revoked by the relevant authority, and since unionisable employees continued enjoying benefits negotiated under the CBA, they remained liable to pay agency fees. 21.The Claimant additionally asserts that a Labour Officer or Conciliator lacks the legal mandate to review, revoke, or declare a Legal Notice redundant. 22.The Claimant further challenges the Conciliator’s finding that the deduction of agency fees from employees who were not members of the 2nd Respondent was contrary to Section 49 of the Labour Relations Act and Section 19 of the Employment Act. 23.The Claimant avers that the agency fee order published by the Cabinet Secretary for Labour is the legal instrument authorizing deductions from employees who are not members of the trade union that negotiated the CBA. The Claimant further pleads that it entered into a CBA with the 2nd Respondent on 24th August 2023, which was duly registered, and that all unionisable employees continue to enjoy the negotiated benefits thereunder. 24.It is the Claimant’s position that pursuant to Section 49 of the Labour Relations Act, all unionisable employees benefiting from the CBA remain liable to pay agency fees notwithstanding that they are not members of the union which negotiated the CBA. 25.The Claimant further denies issuing consent forms for the deduction of agency fees or engaging in unfair labour practices. It avers that, after the 1st Respondent recruited some employees, it merely notified them that union dues would be remitted to the 1st Respondent while agency fees would continue to be remitted to the 2nd Respondent in accordance with Section 49 of the Labour Relations Act. 26.The Claimant maintains that no employee consent was required and that the deductions did not amount to compelling employees to support any union. 27.The Claimant denies failing in its statutory duty to protect employees from unauthorized deductions, maintaining that the deductions were lawful as they were made pursuant to a duly registered CBA and Legal Notice No. 127 of 2021, which remains in force. 28.The Claimant further avers that all deductions were properly remitted to the relevant union in accordance with the law. 29.The Claimant further challenges the Conciliator’s recommendation that it refund all agency fees deducted from employees since August 2023, contending that the deductions were lawful as they were made pursuant to a registered CBA, Court Order, and Legal Notice No. 127 of 2021. 30.The Claimant avers that the agency fees were remitted to the 2nd Respondent and not retained by the Claimant, and therefore there was no legal basis for directing the Claimant to refund monies already remitted in compliance with the law. 31.In its reply to the 1st Respondent’s Response, the Claimant maintains that the suit is properly before the Court and that the deductions of agency fees were lawful, having been grounded on a registered CBA, Court Orders, and Legal Notice No. 127 of 2021. 32.The Claimant further avers that the Conciliator misinterpreted Section 49 of the Labour Relations Act by finding that the Agency Order ceased upon expiry of the earlier CBA, whereas the applicable legal position is that such orders remain in force until reviewed or revoked. 33.The Claimant additionally contends that the Conciliator exceeded the scope of the dispute by making findings relating to deductions from 2023, yet the 1st Respondent’s grievance only concerned employees recruited from August 2024. It denies allegations of unfair labour practices and maintains that the deductions were lawfully remitted to the 2nd Respondent, which was the beneficiary thereof. The Claimant further argues that the Conciliator lacked legal basis to recommend refunds against the Claimant for monies already remitted pursuant to the law. 34.The Claimant therefore asserts that the Conciliator’s findings are manifestly erroneous and prejudicial, warranting this Court’s intervention under Section 73 of the Labour Relations Act. 35.The Claimant finally maintains that the Conciliator’s recommendations are unsupported in law and fact and ought to be set aside. The 1st Respondent’s Case 36.The 1st Respondent’s case is that it reported a trade dispute to the Cabinet Secretary for Labour on 14th November 2025 pursuant to Section 62 of the Labour Relations Act, following which a Conciliator was appointed and conciliation proceedings conducted through joint meetings where parties presented their respective cases. It states that the conciliation process ended without settlement, prompting the Conciliator to issue a Report dated 4th December 2025 containing findings and recommendations. 37.The 1st Respondent further avers that it accepted the Conciliator’s Report through a letter dated 5th December 2025, while the Claimant rejected the same by a letter dated 9th December 2025. It denies the Claimant’s allegations that the Conciliator acted outside her jurisdiction or erred in law or fact, maintaining instead that the Conciliator correctly found that the Claimant had unlawfully deducted agency fees from employees’ wages in relation to the CBA signed on 24th August 2023 and registered as RCA No. 447 of 2023, despite there being no valid agency fee order issued by the Cabinet Secretary under Section 49 of the Labour Relations Act. 38.The 1st Respondent contends that the Claimant unlawfully deducted agency fees from employees’ wages under the 2023 CBA without a valid agency fee order or Gazette Notice issued pursuant to Section 49 of the Labour Relations Act. 39.It maintains that the illegality affected all unionisable employees from August 2023, including before the 1st Respondent was registered, and that the Conciliator correctly found that the Claimant lacked lawful authority to impose the deductions. The 1st Respondent further avers that, absent statutory authorization by the Cabinet Secretary for Labour, the deductions were unlawful and unconstitutional. 40.The 1st Respondent contends that trade union deductions can only lawfully be made through check-off forms, a valid agency fee order, or a court order, none of which existed in respect of the 2023 CBA. It therefore maintains that the agency fee deductions made since August 2023 were unlawful and improperly benefited the 2nd Respondent. 41.The 1st Respondent avers that the Conciliator acted within her statutory mandate, properly interpreted the law, and based her findings on the evidence presented by the parties. It further contends that the Claimant is merely dissatisfied with the outcome and is improperly seeking to turn the conciliation process into an appeal. 42.It maintains that a conciliator’s report may only be interfered with on grounds such as jurisdictional error, procedural impropriety, or manifest illegality, none of which, it argues, have been established by the Claimant. 43.The 1st Respondent further avers that the Claimant’s suit is an attempt to legitimize unlawful deductions through litigation and that the Claimant has not demonstrated any prejudice arising from implementation of the Conciliator’s Report, which remains unchallenged by the 2nd Respondent, the beneficiary of the deductions. 44.It further contends that the Claimant is merely seeking to avoid refunding unlawfully deducted amounts by attacking a valid Conciliator’s Report. The 1st Respondent therefore terms the suit frivolous, vexatious, and an abuse of the court process. 45.It finally prays for the dismissal of the Claimant’s suit and affirmation of the Conciliator’s Report dated 4th December 2025. 46.The 1st Respondent further seeks a declaration that the agency fee deductions under the CBA of 24th August 2023 were unlawful for non-compliance with Section 49 of the Labour Relations Act, and an order compelling refund of all the sums unlawfully deducted as agency fees. Analysis and Determination 47.From the pleadings, the evidence adduced, and the rival submissions, the Court is called upon to determine the following issues:i.Whether the Conciliator’s Report dated 4th December 2025 can be set aside under Section 73 of the Labour Relations Act.ii.Whether the deduction of agency fees under the CBA dated 24th August 2023 complied with Section 49 of the Labour Relations Act.iii.Whether Legal Notice No. 127 of 2021 remained valid and applicable to the 2023 CBA; Whether the Conciliator’s Report dated 4th December 2025 can be set aside under Section 73 of the Labour Relations Act. 48.The Labour Relations Act establishes conciliation as a statutory dispute resolution mechanism under Sections 62 to 73 of the said Act. A conciliator’s report is, by law, not an appealable decision but a facilitative outcome intended to resolve disputes. 49.Section 73 of the Labour Relations Act, however, allows a party aggrieved by a conciliator’s report to move the Court. The available jurisprudence is clear that interference with a conciliation report is limited to instances of illegality, irrationality, procedural impropriety, or jurisdictional error. 50.In Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers (KUDHEIHA) v Aga Khan University Hospital, Nairobi [2015] eKLR, the Court emphasized that alternative dispute resolution outcomes under labour law will only be interfered with where they are shown to be tainted by illegality or clear misdirection. 51.In light of the foregoing, it follows that this Court does not re-evaluate conciliation findings as an appellate body but only examines whether the statutory threshold for interference has been satisfied. Whether the deduction of agency fees under the CBA dated 24th August 2023 complied with Section 49 of the Labour Relations Act. 52.Section 49 provides that agency fees may be imposed on non-union members benefiting from a CBA, and that such deductions require an order by the Cabinet Secretary, which order must be published in a Gazette notice on application by the union. 53.It is thus clear that the statutory architecture on deduction of agency fees is mandatory, and procedural compliance is a condition precedent. In Kenya Hotels and Allied Workers Union v Attorney General & 6 others [2015] KEELRC 278 (KLR), the court extensively discussed the constitutionality and rationale of agency fees, and held that agency fees are lawful under Section 49 of the Labour Relations Act, that such fees are distinct from union dues under Section 48, and that the purpose of agency fees is to prevent “free riders,” namely employees who benefit from a CBA without contributing to the cost of negotiation. 54.Further, in Kenya Quarry and Mine Workers Union v Kenya Builders & Concrete Co. Ltd [2020] KEELRC 313 (KLR), Justice Ongaya (as he then was) emphasized that deduction of agency fees is strictly statutory and that procedural requirements must be complied with. The Court further stated that a union must obtain a Ministerial/Gazette order under Section 49 before agency fees can lawfully be deducted, and without such an order, the employer cannot be compelled to deduct and remit agency fees. 55.It is common ground that the 2023 CBA was registered, and agency fees deductions were made at the rate of 2%. 56.The Claimant’s central argument is that the Legal Notice remained valid and automatically applied to successive CBAs unless revoked, which it contends was not. While it is correct that statutory instruments remain valid until revoked, their application must still correspond to the specific circumstances for which they were issued. 57.In Amalgamated Union of Kenya Metal Workers v Toyota Kenya Limited [2015] KEELRC 412 (KLR), the Court recognized the continued existence and enforceability of a Gazette Notice authorizing the deduction of agency fees. The Court referred to Gazette Notice No. 7344 of 17 July 2009 and treated it as an operative legal instrument supporting ongoing deductions. 58.The reasoning of the court in the foregoing decision implies that once a lawful Gazette Notice has been issued and has not been revoked, suspended, or varied under Section 49(4), the order may continue to sustain deductions where employees remain beneficiaries of collectively bargained terms. 59.In this case, there is no dispute that there exists a subsisting ministerial order and that the order has not been revoked, suspended, or varied. It is also not disputed that the Claimant’s employees are still covered by the negotiated successive CBA. 60.In light of the foregoing, I reach the conclusion that an agency fee order does not lapse automatically merely because one CBA cycle expires and another successor CBA is negotiated. 61.I thus arrive at the conclusion that Legal Notice No. 127 of 2021 applied to the 2023 CBA and remains enforceable until revoked or varied. 62.In the final analysis, the Claimant’s claim succeeds, and orders are granted as follows:-a.That the Conciliator’s Report dated 4th December 2025 is hereby set aside in its entirety.b.An order be and is hereby issued that Legal Notice No. 127 of 2021 continues to apply to the 2023 CBA and remains enforceable until revoked or varied.c.Parties shall bear their own costs of the suit. 63.Orders accordingly. SIGNED, DATED, AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS 18TH DAY OF JUNE, 2026.C. N. BAARIJUDGEAppearance:Ms. Mumbi present for the ClaimantMr. Ong’era present for the 1st RespondentN/A for 2nd RespondentMs. Esther S - C/A