Kenya Engineering Workers Union v Morals Business Consulting Ltd & another (Cause E101 of 2025) [2026] KEELRC 2137 (KLR) (22 July 2026) (Judgment)

Kenya Engineering Workers Union v Morals Business Consulting Ltd & another (Cause E101 of 2025) [2026] KEELRC 2137 (KLR) (22 July 2026) (Judgment) Neutral citation: [2026] KEELRC 2137 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Kisumu Cause E101 of 2025 Nzioki wa Makau, J July 22, 2026 Between Kenya Engineering Workers Union Claimant and Morals Business Consulting Ltd 1st Respondent Rok Industries Ltd 2nd Respondent Judgment 1.The Claimant instituted this suit through a Memorandum of Claim dated 5th November 2025 on behalf of 6 Grievants, namely George Okoth, John Okello, Oscar Omondi, Brian Omollo, Vincent Onyango and George Oluoch. It avers that the Grievants were employed by the 1st Respondent on renewable fixed-term contracts and deployed to work for the 2nd Respondent pursuant to an outsourcing agreement. According to the Claimant, the Grievants actively recruited their colleagues into the Claimant union in February 2025, following which the Respondents unfairly, unlawfully and unprocedurally declared them redundant on account of their trade union membership and activities. The Claimant states that although the Grievants sought renewal of their contracts upon their expiry on 31st March 2025, they were instructed to continue working pending renewal. It contends that while the 1st Respondent subsequently renewed the contracts of other employees, the Grievants were excluded and, upon reporting to work on 26th April 2025, found an internal memo informing them that their services were no longer required. The Claimant further avers that the Grievants were underpaid, denied house allowance and annual leave, and were not paid their terminal dues. In view of the foregoing, the Claimant seeks the following reliefs:a.Reinstatement of the Grievants without loss of benefits;b.Payment of all underpayments, unpaid house allowance and accrued leave with immediate effect upon reinstatement;c.In the alternative payment of redundancy benefits including 12 months' salary as per its terminal redundancy tabulations;d.Costs of the suit; ande.Any other relief the court may deem fit. 2.The 1st Respondent filed its Memorandum of Response dated 13th January 2026 denying that the Grievants were unlawfully declared redundant or that the non-renewal of their contracts was motivated by their trade union membership or activities. While admitting that it engaged the Grievants on fixed-term contracts and deployed them to the 2nd Respondent under a labour outsourcing agreement, it maintains that the contracts simply expired by effluxion of time on 31st March 2025. It avers that the Grievants were engaged on three-month fixed-term contracts whose renewal was expressly not automatic but was subject to availability of work, performance, discipline and other operational requirements. The 1st Respondent further contends that upon expiry of the contracts, employees wishing to renew them were invited to notify it accordingly, after which some contracts were renewed while others, including those of the Grievants, were not. 3.On its part the 2nd Respondent filed a response dated 2nd March 2026. It avers that it had no employment or labour relations with either the Claimant or the Grievants maintaining that it merely entered into an outsourcing agreement under which the 1st Respondent seconded its employees to work at its premises. It further argues that the Claimant has failed to establish any cause of action against it, having itself admitted that the Grievants were employees of the 1st Respondent. Accordingly, it urges the Court to dismiss the claim against it with costs. 4.At the hearing, Mr. George Okoth testified on behalf of the Claimant while the Respondents did not call any witnesses. He testified that neither the Grievants nor the union were notified of the impending redundancy. During cross-examination, however, he acknowledged that he was employed by the 1st Respondent and that he was aware that his fixed-term contract was due to expire. 5.Upon the close of the hearing, the Claimant and the 1st Respondent filed written submissions, while the 2nd Respondent did not file any submissions. Claimant's Submissions 6.The Claimant identifies the following issues for determination:a.Whether the inclusion of the 2nd Respondent was unlawful;b.Whether the Grievants were on permanent contracts or not;c.Whether the Grievants' termination amounted to redundancy;d.Whether the Grievants are properly represented by the Claimant; ande.Whether the reliefs sought are merited 7.On the first issue, the Claimant submits that the joinder of the 2nd Respondent is lawful. It asserts that the 2nd Respondent falls within the definition of an employer under section 2 of the Employment Act since the Grievants rendered services at its premises through an outsourcing arrangement. The Claimant further relies on section 54 of the Labour Institutions Act, 2007, which deems a principal employer and the immediate employer to be joint employers where an employee works on the premises of the principal employer. 8.On the status of the Grievants' contract, the Claimant submits that although the Grievants were engaged on fixed term contracts, their continuous renewal without any breaks converted their employment to permanent status. In support of this proposition, the Claimant relies on Kenyatta University v Maina [2022] KECA 1201 (KLR). As to whether the Grievants termination amounted to redundancy, the Claimant submits that the non-renewal of their contracts constituted redundancy. It highlights the fact that termination came 26 days after the lapse of the last renewable contract, without notice to the Union or the Labour Ministry. The Claimant relies on the definition of redundancy under section 2 of the Employment Act. 9.On the representation of the Grievants, the Claimant submits that it has the requisite locus standi to represent them. It relies on section 22 of the Employment and Labour Relations Court Act and the Court's ruling in Kisumu ELRC Cause No. E098 of 2025 for the proposition that a party can be represented by an office bearer or official of a trade union. The Claimant further contends that the Grievants had executed check-off forms before termination of their employment and the Respondents deducted and remitted union dues from other employees, thereby acknowledging the validity of the check-off forms. It highlights the fact that Respondent failed to adduce any evidence disproving the Grievants' union membership. 10.Lastly on whether the reliefs sought are merited, it asserts that they are. With respect to costs, it proposes Kshs. 300,000/- on the strength of Rule 70 of the Employment and Labour Relations Court (Procedure) Rules. As for certificates of service, the Claimant submits that the Grievants are entitled to the same under section 51 of the Employment Act. Turning to reinstatement the Claimant contends that the Grievants were unlawfully declared redundant without notice hence they are entitled to the same. Alternatively, it submits that the Grievants are entitled to 12 months' salary compensation under section 49(1)(c) of the Employment Act. It points to the fact that the redundancy took place barely two months after service of the check off forms demonstrating that the Respondents were motivated by the Grievants' union affiliation. The Claimant further submits that the Grievants are entitled to accrued leave, one month's salary in lieu of notice and severance pay under section 40(1)(e), (f) and (g) of the Employment Act. It also asserts that the Grievants are entitled to house allowance at 15% of the basic salary under the applicable Regulation of Wages Order and to underpayments on the basis that they were paid rates applicable outside Kisumu City despite serving as machine operators within the city. Finally, relying on section 47(5) of the Employment Act, the Claimant submits that the Respondents failed to justify the termination or rebut the evidence adduced by the Claimant, and therefore the Court should grant all the reliefs sought, including service gratuity on account of the Respondents' failure to remit NSSF contributions. 1st Respondent's Submissions 11.On its part the 1st Respondent identifies the following issues for determination:a.Whether the Claimant has locus standi to lodge and prosecute the suit on behalf of the Grievants;b.Whether the Grievants were unfairly terminated or declared redundant; andc.Whether the Claimant is entitled to the reliefs sought; 12.On the first issue, the 1st Respondent submits that the Claimant lacks the requisite locus standi to institute and prosecute the suit because the Grievants are not bona fide members of the union. It asserts that the check-off forms relied upon by the Claimant were declared invalid in ELRC Cause No. E098 of 2025, where the Court held that the forms were defective for failing to contain the employees' individual membership numbers and therefore did not comply with the Labour Relations Act. Consequently, the Respondent contends that there is no nexus between the Claimant and the Grievants. 13.The 1st Respondent further submits that a trade union derives its mandate to represent employees only after they have lawfully joined the union in accordance with the Labour Relations Act, Article 36 and Article 41(2)(c) of the Constitution, ILO Conventions Nos. 87 and 98, and the Industrial Relations Charter. It asserts that the Claimant failed to prove that the Grievants became valid members, having also failed to produce evidence of payment of the prescribed membership fee under its constitution. In support of this position, the 1st Respondent relies on Communication Workers Union v Safaricom Limited [2014] eKLR, where the Court held that a union must prove that the affected employee is genuinely its registered member before it acquires standing to litigate on the employee's behalf. It also relies on Transport Workers Union v Crown Bus Services Limited [2017], where the Court affirmed that only a union representing its members has standing to pursue their grievances. 14.On the second issue the 1st Respondent submits that the Grievants were neither terminated nor declared redundant. It asserts that section 40 of the Employment Act is inapplicable because their fixed term contracts ended by effluxion of time. The 1st Respondent further submits that the Grievants knowingly executed the contracts which specified both the commencement and expiry dates hence accepted that the renewal was not automatic. It maintains that the Grievants failed to satisfy the conditions for renewal being satisfactory performance, discipline, availability of work, compliance with client requirements and submission of an application for renewal one week before expiry. Moreover, it emphasizes that there was no legitimate expectation of renewal because the contracts expressly provided otherwise and because the outsourcing agreement was itself of a short-term nature. Reliance is placed on St. Mary's Boys Secondary School v Julias AM [2017] eKLR, where the Court held that an employer is under no obligation to give reasons for declining to renew a fixed-term contract upon its expiry. It also points to the internal memo dated 2nd April 2025 extending the renewal period to 8th April 2025 and the subsequent letter of 26th April 2025 informing the Grievants that their contracts had not been renewed. 15.Lastly on the Claimant's entitlement to the reliefs sought, the 1st Respondent submits to the contrary. It highlights the fact that the Grievants' contracts ended by effluxion of time. On notice pay and severance pay, it submits that they are unavailable since no redundancy occurred. As for service pay it asserts that it is not payable because the Grievants were members of NSSF, with respect to service gratuity they assert that it is inapplicable in the absence of a CBA. Lastly on underpayments it contends that it is unmeritorious because the wages were mutually agreed upon and no complaint was raised during the subsistence of the employment relationship. It accordingly urges the Court to dismiss the claim with costs. Disposition 16.The first issue for determination is whether the Grievants were entitled to representation by the Claimant herein. From a reading of the material before the Court, the Claimant represented the Grievants herein ostensibly because they were its members. Article 41(2)(c) of the Constitution provides that every worker has a right to form, join or participate in the activities and programmes of a trade union. ILO Conventions No. 87 of 1948 – Freedom of Association and Protection of the Right to Organise, similarly protects the right of all workers and employers to form and join organizations of their own choosing without prior authorization. ILO Convention No. 98 of 1949 – Right to Organise and Collective Bargaining, protects workers against acts of anti-union discrimination and safeguards workers' rights to exercise their freedom to be represented by a union. That right is undiluted. It is defined. It does not therefore comport with Article 41(2)(c) and the two ILO Conventions adverted to, which are fundamental conventions of the ILO, for one to allege a trade union member is not entitled to representation by a trade union. No member country is allowed to disregard these salutary provisions. 17.It is therefore my finding that the Claimant Union has requisite locus standi to represent the workers herein named as the Grievants in their dispute with their employers. The challenge on this score fails. 18.The inclusion of the 2nd Respondent is proper as the term employer includes the 2nd Respondent in terms of section 2 of the Employment Act and section 54 of the Labour Institutions Act, 2007, which deems a principal employer and the immediate employer to be joint employers where an employee works on the premises of the principal employer. The 2nd Respondent is properly before the Court as it was an employer of the Grievants. The control test supports this view as the employees of the 1st Respondent were employed to render services to the 2nd Respondent in critical areas of operation of the 2nd Respondent unlike in contracts where one provides cleaning services or repair services at a premise. In the claim before me, the character of the engagement was two employers handling one set of employees with payroll being processed by one for payment by the other. One does not pay salaries to non-employees. The 2nd Respondent paid salaries to the Grievants through the 1st Respondent. There was sufficient nexus to infer an employment relationship and no amount of layering could take away the fact the Grievants were ipso facto employees of the 2nd Respondent though remunerated through the 1st Respondent. 19.The Claimant sought various reliefs for the Grievants. Their contracts were extended beyond their date of termination and therefore there was legitimate expectation the engagement would continue. As such, the argument that there was no renewal fails since the Respondents themselves acknowledge they extended the contracts for a period before finally terminating the contract. The termination was without notice or cause. 20.The Court having found there was unlawful termination declines to order their reinstatement and instead will award each of the Grievants 3 months gross salary as compensation. The Respondents are to issue certificates of service in terms of section 51 of the Employment Act and failure to do so will result in sanctions by way of a fine. Certificates to be issued within 14 days of today failing which the Respondents will pay Kshs. 100,000/- each to the Court as a fine. The Claimant to have the costs of the suit as well. Interest on the sum awarded to the Grievants from date of judgment till payment in full. 21.In the final analysis I enter judgment for the Claimant against the Respondents jointly and severally for:-a.3 months gross salary for each of the Grievantsb.Issuance of certificate of service within 14 days failing which each Respondent is to pay Kshs. 100,000/- as a fine.c.Costs of the suitd.Interest on the sums in (a) above at 14% per annum from date of judgment till payment in full.It is so ordered. DATED AND DELIVERED AT KISUMU THIS 22ND DAY OF JULY 2026NZIOKI wa MAKAU, MCIArb.JUDGE