https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1591

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT** **AT MOMBASA** *(Before Hon. Lady Justice Monica Mbarũ)* **CAUSE NO. E008 OF 2025** **KENYA PLANTATION AND** **AGRICULTURAL WORKERS UNION CLAIMANT** *VERSUS* **REA VIPINGO LIMITED 1ST RESPONDENT** **ESSENTIAL BUSINESS ADVISORY SERVICES 2ND RESPONDENT** **JUDGMENT** The claimant is a registered trade union authorised to represent employees in Kenya's agricultural sector. The 1st respondent is a sisal-growing and processing company with sisal estates located in Vipingo North, Mombasa, and in Dwa Estate, Kibwezi. The 2nd respondent is an outsourcing employment company contracted by the 1st respondent to provide outsourced labour services and operates from the 1st respondent's premises. The 2nd respondent is assigned offices within the 1st respondent's premises in Vipingo, manned by its representative, Benard Baya. The 1st respondent is a member of the Kenya Sisal Growers and Employers Association of Kenya, with a Recognition agreement with the claimant, and has concluded several collective agreements (CBA) with the claimant. The last CBA was registered with the court and came into force on 3 May 2024. The CBA was concluded between the 1st respondent and the claimant and is therefore binding on the respondents, including all unionisable employees of the 2nd respondent. subject to the provisions of section 10(3)(e ), 11(3), 13(5) and 26(2) of the Employment Act (the Act), the provision of section 59(1)(a), (b), (c ) and 59(3) of the Labour Relations Act (the LRA), rad with the CBA, the 2nd respondent is by default bound by the CBA in accordance with section 54(1) of the LRA. All the terms for the CB between the claimant and the 1st respondent apply to the 2nd respondent. The 2nd respondent employs and contracts her employees under the tasks categorised in Appendices ‘A’, ‘B’, ‘C’, and ‘D’ of the CBA. It does not craft or establish its own employment positions but is guided by the positions set out in the CBA. The claim is that the respondents unilaterally and without consulting the claimant, contrary to section 10(5) of the Act and clause 32 of the CBA, revised it by placing employees categorised in Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA into term contracts: thus, varying the periods from 1 to 3 months. This is contrary to section 10(7) of the Act. The tasks stipulated in Appendix ‘A’ comprise cutting sisal into numbered bundles, with employees in the positions of ‘cutters’, ‘transporters’, and ‘decorticators’, and these positions have defined end dates because they are permanent. Sisal cutting is generally a permanent, non-seasonal position. The employment positions set out in Appendices ‘A’, ‘B’, ‘C, and ‘D’ of the CBA flow from the permanent nature of sisal cutting. The claim is that a registered CBA constitutes minimum, mandatory, and non-derogable terms and conditions of employment for all employees covered therein. The engagement of employees performing permanent and continuous work on revolving short-term contracts is unlawful and defeats the purpose of collective bargaining. It amounts to disguised casualisation and precarious employment. The actions of the respondents violate Article 41 of the Constitution, Section 10(5) of the Act, and Sections 57 and 59 of the LRA by unilaterally revising a CBA without negotiating with the claimant or obtaining the claimant's consent. The claim is that the 2nd respondent, though an outsourced labour provider, operates within the premises of the 1st respondent and supplies labour exclusively for the 1st respondent’s core business. By operation of section 54(1) of the LRA, the respondents are joint employers and are liable for compliance with all statutory and collectively agreed terms and conditions of employment. Outsourcing arrangements cannot be used as a device to avoid, dilute, or defeat a registered CBA. The respondents are duty bound to employ employees set out in Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA by applying all the contractual terms set out in the CBA and in accordance with section 11(3) and 13(35) of the Act. by offering the employees letters of appointment for positions categorized under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA to undergo probation and thereafter confirmed to that position is contrary to fir labour practices. The claim is that the transport and bicycle allowances under clause 19 of the CBA constitute a monetary allowance, once payable to employees who cycle to work, and do not authorise wage deductions or the forced acquisition of bicycles. The deduction of employees’ wages for bicycles constitutes an unlawful deduction and a fundamental breach of the CBA. The import of clause 19 of the CBA is that the employer must provide a bicycle, not an allowance to purchase one. Where the employer does not offer transport as a benefit, the counter benefit is a bicycle or an allowance. This is a common employment practice. Before 2020, the 1st respondent had vehicles to transport its employees to and from places of work. However, due to the COVID-19 pandemic and containment measures, it stopped ferrying field workers and adopted a bicycle allowance. Not all field workers, but some employees, opted for the bicycles by formally requesting to be provided with bicycles on loan to allow for a deduction. The response of the field workers who did not make a request was left without an option for transportation. The 1st respondent misinterpreted the provision of a bicycle to mean the purchase of a bicycle on loan to the field workers. Clause 19 of the CBA does not reflect such a provision. The respondents have acted contrary to the CBA terms and conditions. Such is a fundamental breach of a registered document. The employees raised a grievance regarding the breach of the CBA during a meeting with the respondents on 16 January 2025. The claim is that the agency fee is due under section 49 of the LRA for all unionisable employees who are not members of a trade union but benefit from a CBA. A CBA thus governs employment relations, and the respondents are bound by it. On 31 August 2010, the Minister Gazetted Notice No. 10324 directing Kenya Sisal Growers and Employers Association, its members, agents, and affiliated employers to deduct agency fees from all unionsable employees who are not members of the claimant and to remit the same every month. The 2nd respondent, being an employing agency and labour contractor acting on behalf of the 1st respondent, is bound under the provisions of section 54(1) of the Labour Institutions Act to implement the Minister's Notice and CBA by deducting and remitting emergency fees to the claimant for all unionisable employees. Despite the Minister’s Notice, the respondents are jointly in breach thereof and have refused and neglected to deduct and remit trade union dues and agency fees to the claimant. Such a branch of the law and CBA is not justified here; the claim should be allowed as prayed. The claimant is seeking the following orders: 1. **A declaration that the CBA registered on 3 May 2024 between Kenya Sisal Growers and Employers Association (Kenya) and Kenya Plantation and Agricultural Workers Union I is valid, binding, and enforceable against Rea Vipingo Plantation Limited and Essential Business Advisory Services jointly and severally.** 2. **A declaration that the employment positions set out in Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA are permanent in nature.** 3. **A declaration that the engagement of employees in the said positions on successive fixed-term contracts constitutes an unfair labour practice and an unlawful unilateral variation of a registered CBA.** 4. **An order directing Rea Vipingo Plantations Limited and Essential Business Advisory Services to immediately cease engaging employees covered under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA.** 5. **An order directing Rea Vipingo Plantations Limited and Essential Business Advisory Services to regularise and convert all affected fixed-term contracts into permanent contracts of employment within 60 days.** 6. **An order directing Rea Vipingo Plantations Limited and Essential Business Advisory Services to comply with clause 19 of the CBA and transport field workers whose places of work are beyond a 2-kilometre radius.** 7. **In the alternative, an order directing Rea Vipingo Plantations Limited and Essential Business Advisory Services to pay a bicycle allowance to affected field workers, such allowance to be agreed through collective bargaining within 90 days, failing which the court shall determine the same.** 8. **An order directing the Essential Businesses and Advisory Services to fully apply and implement the terms of the CBA to all its unionisable employees with immediate effect.** 9. **A declaration that Essential Business Advisory Services is bound by section 49 of the LRA, the applicable CBA and Gazette Notice No. 10324 to deduct and remit agency fees in respect of all unionisable employees who are not members of the claimant union, but benefit from the CBA.** 10. **Costs of the claim** 11. **Any other relief the court deems just.** In support of the claim, the claimant submitted that upon registration of a CBA, it becomes enforceable and applies to all unionsable employees covered under it. The respondents have jointly engaged employees covered under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA, hence covered under the subject CBA between the claimant and the 1st respondent. Any variations thereof under the guise of outsourcing labour to the 2nd respondent is a unilateral variation of the CBA and terms and conditions of employment contrary to section 10(5) of the Act. Such variations of a CBA, regardless of the party, constitute an unfair labour practice. The respondents responded, and evidence confirmed, that the 1st respondent has outsourced labour to the 2nd respondent. The 2nd respondent has employed employees who undertake duties as outlined under Appendices ‘A’, ‘B’, ‘C, and ‘D’ of the CBA. The application of different or separate terms outside the CBA violates the CBA, and such a breach should not be allowed. In **Motaung v Sama Surce Kenya EPZ Ltd t/a Same & 2 others Petition No. E071 of 2022**, the court applied the substance-over-form principle to determine that an employer-employee relationship is not governed by corporate structures or contractual labels but by the practical realities of the working arrangement. By failing to engage in a substantive inquiry. The respondents have applied legalities over substantive justice to justify the breach of the CBA in place. The claimant submitted that the deliberate omission of control is not sufficient to negate the CBA. The witnesses called by the respondents admitted that the employees are within the 1st respondent's premises and managed by the 2nd respondent. The respondents are intricately connected in terms of the control of the subject employees. The benefits under the CBA are apparent as the 2nd respondent has not established its own categories of employees but applies the CBA structures. The defendants have described the arrangement between them as outsourcing, yet fail to identify any independent services rendered by the 2nd respondent's employees. In reality, there is no outsourcing but rather a delegation of responsibility to avoid applying the CBA. True outsourcing involves delegating a specific service to an independent contractor who retains control over the service rendered. In **Kenya Union of Commercial Food and Allied Workers v Sunveat Foods Limited & another, Cause No. 120 of 2013**, the court found that the employer, Sunveat Foods Limited, was the principal employer responsible for the terms of employment, even if a third party, a labour intermediary, was acting as an agent. The principal employer cannot use subcontractors or employment agents to evade their obligations under the Act. The 1st respondent's subcontracting to the 2nd respondent removes employees from the CBA's protection. By placing the 2nd respondent as the employer, there is a direct breach of the effective CBA. In **Banking Insurance and Finance Union v Barclays Bank of Kenya,** the court held that restructuringcannot be used to undermine collectively bargained rights. Where a CBA exists and governs a cadre of employees, it sets the basic minimum terms and conditions of employment applicable to those category of employees. In **Omondi Jutus Rang’ang’a & 28 others v KCB Bank Kenya Limited & BIFU Cause No. In E618 of 2021,** the court held that an employer cannot lawfully issue contracts with terms inferior or less favourablethan those provided in the CBA. The orders sought that the claim should issue with costs. In reply, the 1st respondent admitted that it is a member of the Sisal Growers & Employers Association. The association is the body through which the 1st Respondent engages with the Claimant on issues of collective bargaining regarding its employees, representing the employees of the 1st Respondent, and which has a recognition agreement with the Association. The 2nd Respondent is a limited liability company engaged by the 1st Respondent to provide staff for various functions as required by the 1st Respondent’s business exigencies and needs. Employment at the 1st Respondent in Rea Vipingo is in two categories: permanent and fixed-term engagements. The 1st Respondent has not revised any of its employees' terms and conditions of employment as alleged by the Claimant. The terms as captured under the CBA appendices A, B, C, and D capture these types of engagements. Various factors affect labour forecasting over a given period and guide the form of engagement between the 1st Respondent and its staff, including: 1. Intensity and duration of the precipitation 2. Area available for replanting new crops 3. Crop physiology and pathology 4. unfurling of leaf, pests, and disease 5. Foreign market dynamics 6. Production costs The 1st Respondent has not revised the employment terms of its staff from permanent to fixed-term contracts. The employees were already engaged and working in accordance with the CBA terms and their contracts of engagement, as has always been the case. Given that the nature of business is seasonal, employment follows the same trend as it would not be possible to engage staff continuously, even when there is no work requiring their specific functions during a low season. The response is that the 1st Respondent has deducted and remitted union dues and agency fees for its employees, whether or not they are union members. The Claimant has not specified when a request was made to the 1st Respondent on agency fees, nor has the Claimant submitted an order from the Minister requiring any deductions. There is no breach of Clause 19 of the CBA as alleged. The 1st respondent has refused to provide alternatives or facilitate transportation for its employees. Clause 19 of the CBA provides that, where the employer opts to provide a bicycle allowance, it shall be at the management’s discretion. The 1st Respondent has provided the field employees with bicycle allowances, which are paid each month to those who work outside the two (2) kilometre radius. Any employee interested in purchasing a bicycle from the management must request it in writing, and one will be issued to them. The employee pays for the bicycle in instalments. The bicycle allowance is paid to them as well. No employee is required to take a bicycle; only those interested request one. Before 2020, the 1st Respondent had vehicles to transport its employees; however, due to COVID-19 containment measures, transporting staff became difficult, as social distancing requirements led to delayed arrivals, thereby affecting work. The 1st Respondent’s management decided to adopt the bicycle allowance. Some employees opted for bicycles. The individual staff would request the same in writing, and the 1st Respondent would deduct the sums from their salary. Some employees wrote requesting that a bicycle be provided to them, and, as such, the 1st Respondent deducted the relevant sums to settle the bicycle's purchase. The claimant's argument that the 1st Respondent must provide transport and pay all employees a bicycle allowance misinterprets Clause 19 of the CBA. The provision clearly states that it is at the 1st Respondent's discretion to provide either transport or a bicycle allowance to employees. The 1st Respondent, its agents or employees, have not participated in victimising or harassing, or initiating any disciplinary action against, an employee for exercising their constitutional right to become a member of a union of their choice. On the orders sought, the 1st respondent submitted that the claim that all employment should be converted to permanent employment is untenable; the Act does not contemplate ‘permanent’ employment. The nature of the Respondent’s business is seasonal, hence only requiring specific functions at specific seasons. Regarding Clause 19 of the CBA, the 1st Respondent has fully complied by ferrying all field workers to their places of work. It has provided its staff with allowances and even offered those who wish to purchase bicycles facilities to enable them to acquire them. Directing the 1st Respondent to pay a bicycle allowance to affected field workers is not justified. The Claimant executed a CBA expressly giving the employers under the Association the discretion to set a bicycle allowance. This allowance was agreed to be optional when transport is not provided directly. Since transport was stopped, the 1st Respondent has paid bicycle allowances to its staff and, for those who wish to purchase a bicycle, has agreed on the terms of purchase. The 1st Respondent has fully complied with the provision. The employees have not complained. 1st respondent submitted that the claimant seeks the following: 1. declaration that successive fixed-term contracts constitute an unfair labour practice, 2. conversion of all fixed-term contracts to permanent contracts and payment of bicycle allowance to affected field workers whose places of work are beyond a two (2) kilometre radius. The Claimant filed a suit accompanied by an urgent application which sought similar orders, including that the 1st Respondent deduct and remit union dues and agency fees, and for the 1st Respondent to fully comply with Clause 19 of the CBA between its association and the Claimant. This court, in its ruling dated 17 July 2025, dismissed the application and the main suit on the basis that the Claimant had not substantiated or demonstrated any wrongdoing on the part of the 1st Respondent and that, indeed, there was no basis to pray for compulsion of the 1st Respondent to remit union dues or agency fees as there was compliance. The Claimant thereafter filed an application seeking to reinstate the suit, which was allowed, and thereafter it was also allowed to amend its claim, which is the matter before the court. The Amended Claim seeks to have the respondents treated as joint employers and be subjected to the same CBA, and to have the Court direct that all employees be paid a bicycle allowance. The 1st respondent submitted that the employment is in two categories: ‘permanent’ or regular employment, and fixed-term engagement. The 1st Respondent did not revise any of its employees' terms as alleged by the claimant. There is no evidence of term conversion, and no employees are allegedly affected. The two categories of employment are based on the intensity and duration of precipitation, the area available for replanting new crops, crop physiology and pathology, foreign market dynamics, and production costs. These two categories of employment fall under CBA appendices A, B, C, and D. The employment is therefore seasonal, hence the fixed-term engagement for some jobs. These employees, under CBA clause 19, are entitled to a bicycle allowance or, at the employer's discretion, to any other arrangement to provide transport. The Claimant has not provided any evidence to the contrary, as held **Moses Wanjala Lukoye v Bernard Alfred Wekesa Sambu & 3 Others [2013] eKLR** The 1st Respondent has not unilaterally converted permanent positions under the CBA appendices A, B, C, and D to fixed-term engagements as alleged. The Claimant alleges that the roles provided for under the CBA appendices A, B, C and D are permanent in nature without evidence. In the captured role descriptions, the CBA does not categorise the engagement as permanent. The CBA provides for payment of work based on tasks indicative of seasonal employment, as elaborated by the 1st Respondent’s witness and the documents provided. The Claimant has not demonstrated any employee who was under ‘permanent’ terms and was unilaterally converted to a fixed-term engagement. Neither demonstrated that the employees on fixed-term contracts were subjected to any unfair labour practices, nor that they did not willingly accept their terms of engagement. The Claimant has not proved unilateral conversion of terms of employment contrary to Section 10(5) of the Employment Act, 2007. The 1st respondent submitted that the respondents are not joint employers as alleged. The Respondents admitted that they entered into a commercial contract under which the 2nd Respondent is an independent contractor who provides a workforce and delivers certain results as agreed with the 1st Respondent. The 1st Respondent only informs the 2nd Respondent of the work to be performed, and the 2nd Respondent determines how the work will be performed, supervises its own staff, and pays its own staff. At no point were control, disciplinary powers, compensation or otherwise the 1st Respondent’s obligation. The allegation that the commercial agreement between the Respondents is a disguise for joint employment has not been proved. The claimant alleges only that the 1st Respondent undertakes daily supervision, yet has not called any witness to prove the allegation. The 1st Respondent’s witness testified that the 1st Respondent does not interact or instruct any of the 2nd Respondent’s employees. It maintains control of the employees. The Court has delivered several decisions giving guidance to employers on outsourcing in **Wrigley Company [E.A] Limited v Attorney-General & 2 Others & Another [2013] e-KLR**. The allegation by the Claimant that the 1st Respondent has outsourced its core functions is false and without merit. The work of sisal cutting is performed by Foleni Kazungu, employed directly by the 1st Respondent. Sisal growing and production, being the 1st Respondent’s core business, has not been outsourced as alleged. The 1st respondent submitted that the alleged refusal to provide transport or pay bicycle allowance to field workers is not contrary to clause 19 of the CBA. Clause 19 of the CBA states as follows verbatim: *The Management shall provide field workers with transport to and from their places of work if such places of work are outside a 2- kilometre radius from the assembly point or labour camp in which they reside, or shall, at their discretion, provide a bicycle allowance.* The CBA creates two options for an employer of the sisal association: 1. Provision of transport directly; or 2. Bicycle allowance. The Clause gives discretion over whether to provide transport or pay a bicycle allowance for employees who live more than 2km from the assembly point. In this instance, the 1st Respondent stopped providing transport and opted to pay a bicycle allowance to all employees entitled to the same. The transport stoppage was due to health and safety concerns related to the COVID-19 pandemic at the time. This suit was filed in 2025, more than four (4) years after the decision to stop providing transport. The 1st Respondent produced payslips demonstrating that even employees who opted to purchase a bicycle on an employer-financed loan were still entitled to and were enjoying the bicycle allowance. No employee has demonstrated that they are not paid the said allowance. It is misguided for the claimant to suggest that employees and employers can only interact and agree if the trade union is involved. The 1st Respondent’s employees sought the assistance of their employer to purchase bicycles and refund the cost of purchase through monthly deductions at their own volition. There is no violation of Clause 19 of the CBA. On the claim that positions in appendices A, B, C, and D are permanent in nature, the nature of the jobs is elaborated by the 1st Respondent in its documentary and oral evidence, which is a mixture of both permanent and temporary. The temporary roles are those at the plantations where jobs depend on the season (e.g., planting, harvesting). The claimant has not substantiated that the said roles are permanent. On the claim that engagement of employees in successive fixed-term contracts constitutes an unfair labour practice and a unilateral variation of a registered CBA, the claimant has laid the said allegation, devoid of proof. No employee has laid any claim against the 1st Respondent save for the Claimant itself without any particulars. On the claim for the conversion of all fixed term contracts into permanent contracts and stoppage of engaging employees under Appendices A, B, C, and D on fixed term contracts, in **Kenya Airways Ltd v Aviation Workers Union Kenya [2014] eKLR** and in **Ronald Kipngeno Bii v Unliver Tea Kenya Limited [2022] KEELRC 829 (KLR)** where this Court affirmed that employers are entitled to make business decisions about their enterprise. The grant of this order would be an unjustified interference with the 1st Respondent’s managerial prerogative. On the issue of whether to direct the 1st Respondent to comply with Clause 19 and provide transport for field workers, the 1st Respondent has complied with the full import of the Clause as agreed by its association and the Claimant. This is an illegal attempt to amend a valid CBA. In any event, should the Claimant seek to amend the said clause, there are structures established to do so. The claim should be dismissed with costs. In reply, the 2nd respondent denied all the claims as they all relate to the CBA with the 1st respondent. The 2nd Respondent is not a member; therefore, they cannot be accountable under the subject CBA. There is no privity to an agreement reached between the Claimant and the 1st Respondent. The 2nd respondent’s case is that their employees' terms of employment are governed by their agreed terms, the Employment Act, and other relevant employment laws. In the absence of a Recognition Agreement signed between the Claimant and the 2nd Respondent regarding the CBA, its terms are inapplicable. The Claimant is put to strict proof to the contrary. The 2nd Respondent admitted that they supply labour to many businesses, with the 1st Respondent being one of their clients. There is no joint employment with the 1st respondent as alleged. more so, the provision of transport and bicycles to employees. Regarding payment of agency fees, the 2nd respondent’s case is that there is no legal basis for the deduction. The 2nd Respondent is not bound by the CBA between the claimant and the 1st Respondent as alleged. It cannot be held to have been in breach of such terms. The claim that the 2nd respondent promotes precarious employment, which is against labour laws, is without evidence. They operate and employ employees in accordance with the labour laws in Kenya, and the Claimant has no evidence to support such allegations. Thus, the claim seeking enforcement of the CBA between Kenya Sisal Growers & Employers Association (Kenya) and the Claimant is unenforceable against the employees of the 2nd Respondent for reasons that it is not a member of the Association that is a party to the CBA, and there exists no Recognition Agreement about the same. The claim that the employees should be issued with fixed-term contracts to some or a group of the 2nd Respondent’s employees does not constitute unfair labour practices, as it is in line with the employment requirements of the 1st Respondent and in compliance with the labour laws applicable. The Claimant has not made attempts for conciliation before filing the suit, in line with section 54 (6) of the LRA. The claim was prematurely brought before the Court, since the 30-day period provided under the LRA, after which deductions ought to be made, had not even started running since proper notice had not been given by the Claimant herein. 2nd respondent submitted that the claimant sought several prayers: 1. a declaration that the CBA between themselves and the Members of the Sisal Growers and Employers’ Association (Kenya) is binding to both Respondents, whose effect is that all employees are regarded as permanent employees, and 2. a deduction to be made against their employees towards agency fees for the union. On 17 July 2025, the court delivered a ruling dismissing the Claimant’s Application, and observed that the Claimant had moved the court seeking deduction of union dues before the lapse of 30 days provided under section 48(3) of the LRA. The claimant alleged that the deductions were sought on 1st and 3rd February 2025, whereas the suit was filed on 30 January 2025. The Court further stated that the Claimant had not submitted the CBA to the Court for analysis of its terms and consideration. Upon issuance of the ruling, the Claimant did not take any step to follow through with the issues raised in the Court’s ruling. The Claimant instead sought to proceed with the suit despite the irregularities stated by the Court. During the hearing, it was confirmed by the witnesses that there exists a Recognition Agreement between the Claimant and the 1st Respondent, who was a member of the Sisal Growers and Employers Association. It was also undisputed that the 2nd Respondent was not a member of the Sisal Growers and Employers Association, and that there exists no Recognition Agreement between the Claimant and the 2nd Respondent. The 2nd Respondent confirmed that, upon receiving the workload from the 1st Respondent, it was for them to determine the workforce required to undertake the said tasks. It controls its employees in all aspects, including issuing employment contracts, managing their daily tasks and payments, and handling disciplinary issues through its supervisors. The 1st Respondent confirmed it has no relationship with the 2nd Respondent’s employees. The 2nd Respondent stated that they were agreeable to their employees being unionised, as it is their constitutional right, provided that the Claimant followed the prescribed recruitment channels. Despite the alleged recruitment of its employees, the Claimant did not give insight regarding how many employees they had recruited, and in which positions they were employed, vis-à-vis the total number of employees of the 2nd Respondent, to guide the Court as to whether they had attained the required simple majority to seek recognition by the 2nd Respondent. Even after the institution of the suit, none of their employees had confirmed being recruited by the union by signing the alleged list filed by the Claimant. They were also not called as witnesses to confirm the authenticity of the signatures. Section 54 of the LRA provides that if the union represents a simple majority of unionisable employees, the employer shall recognise it, and a Recognition Agreement recording the terms of recognition shall be concluded between the union and the employer. In the **Kenya Engineering Workers Union v Farm Engineering Industries Limited [2024] KEELRC 152 (KLR),** the court held that: *“The Claimant has not led any evidence on the number of employees the Respondent has outsourced, what each of the employees does and how much they are paid, so as to prove that the intention for the outsourcing is to discriminate between outsourced employees and those that are directly employed by the Respondent. …nothing bars a union from recruiting members from outsourced employees provided they fall within their area of representation. … The reliefs sought herein, are only tenable upon a finding that the Respondent’s outsourcing of employees violated the existing CBA between the parties. The contrary being the case, the prayers sought fail* *and are dismissed.”* In the case of **Kenya Union of Commercial Food and Allied Workers v Midal Group (K) Ltd, another 2021KEELRC1146(KLR),** the court held that members of the claimant Union complained that they were paid less than others directly employed by the 2nd respondent, despite doing similar work. This in itself would amount to discrimination against such employees, contrary to the requirements of the law and the Constitution. The claimant, however, did not adduce evidence to establish a disparity in salary payments between outsourced workers and those employed directly. Hence, forcing the workers to sign a three-month contract, the claimants have not established this “forceful nature” of signing the contracts. The Claimant failed to follow the procedures provided under the law in recruiting the 2nd Respondent’s employees. They cannot fault the 2nd Respondent and impose that they are joint employers with the 1st Respondent in seeking to compel them to be bound by the CBA without a Recognition Agreement and to seek deduction of union dues further. The 2nd Respondent is not opposed to their employees being unionised, and they have no basis to deny them their Constitutional right to association, provided that the same is done procedurally and lawfully to be fair to all parties involved. The claim should be dismissed with costs. **Determination** In the claim, the responses and written submissions raise various issues for determination. The main issues relate to the application of the CBA between the claimant and the Kenya Sisal Growers and Employers Association; the nature of employment terms of the claimant members by the respondent under the subject CBA, the proper interpretation of clause 19 of the CBA; whether the 2nd respondent is bound under the CBA; and who should pay costs. These issues are intertwined, though separated in some respects. The 1st respondent has admitted that it is covered under the CBA, which the claimant entered with the Kenya Sisal Growers and Employers Association. Under the CBA, various categories of employees are defined, including employees defined under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA. The sanctity of a CBA is as defined under section 59(5) of the LRA. A CBA only becomes enforceable upon registration by the Court. In this case, a CBA was registered and came into force on 3 May 2024. In **Universities Academic Sta 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: *“…Section 59(5) of the LRA is couched in mandatory terms and not left to the discretion of the parties or the court;* *A collective agreement becomes enforceable and shall be implemented upon registration by the Court and shall be effective from the date agreed upon by the parties.* *This section has two parts.* *34. The first part is that, a CBA only becomes enforceable upon registration by the Court.* *35. The second part is that, upon registration, a CBA is eective from the date agreed upon by the parties.”* The CBA in force apply as the minimum threshold for employment terms and conditions with the subject employer and workplace. The employer has a legal duty to bring to the attention of existing employees, recruited employees and prospective employees the existence of the CBA in place pursuant to section 11(3) of the Act: ***(3) A statement under section 10 may refer the employee for particulars of either of the matters specified in section 10(3)(e) to the law or to the provisions of any collective agreement directly affecting the terms and conditions of the employment which is reasonably accessible to the employee.*** The rationale is that any employee on the shop floor should not be discriminated against in determining the terms and conditions of employment, whether unionised or not. Every unionisable employee should benefit from the existing CBA. Whenever there are changes to the CBA terms and conditions, they should be brought to the attention of employees on the shop floor without distinction. Under section 13 (5) of the Act, the employer is required to notify and ensure reasonable access to the CBA document: ***(5) A statement under subsection (1) may refer the employee for a change in either of the matters specified in section 10(3)(e) to the law or to the provisions of any collective agreement directly affecting the terms and conditions of the employment, which is reasonably accessible to the employee.*** The purpose is to ensure equal terms in the workplace. Equal pay for equal work of the same value pursuant to section 26(2) of the Act: ***(2) Where the terms and conditions of a contract of service are regulated by any regulations, as agreed in any collective agreement or contract between the parties or enacted by any other written law, decreed by any judgment award or order of the Industrial Court are more favourable to an employee than the terms provided in this Part and Part VI. Such favourable terms and conditions of service shall apply.*** In **Pamela Nelima Lutta v Mumias Sugar Co. Ltd [2017] KEELRC 577 (KLR)**, the court held that parties are held to their contract of employment but cannot go below the minimum legal threshold, including the provisions of section 26 of the Act. Where a CBA exists, all unionisable employees should be subject to the same terms and conditions, and the CBA should not be applied differently. Under section 48 (1) of the Labour Institutions Act, once a CBA is negotiated, equality in wage payments is imperative. The more favourable terms should be applied. These include the wages under a Wage Order, a CBA or an employment contract. Whichever is favourable to the employee should form the basis of employment as held in [**Kutus Stage Savings & Credit Co-operative Society v Nyamau [2026] KEELRC 981 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/981/eng%402026-04-17)**.** Thus, in the case of **Kenya Engineering Workers Union v M/S Roofings Kenya Limited [2026] KEELRC 1301 (KLR),** the court recognised that under a CBA, the basis of this agreement is to secure terms and conditions of employment and ensure peace on the shop floor. The CBA negotiations are conducted on the understanding that the employees have offered their labour and the employer has remained in operation. The employees become unionised to negotiate collectively. The employer seeks to equalise the shop floor by having standard terms and conditions of employees who undertake similar duties of equal value as required under section 26 of the Act. This is the essence of Article 41 of the Constitution. In this case, the claimant recognised by the 1st respondent under the CBA with Kenya Sisal Growers and Employers Association, the entry of the 2nd respondent as a labour provider is implicated under the CBA. The 2nd respondent admitted, through its witness, that it offers labour to the 1st respondent. The shop floor and work premises are at the 1st respondent. Save for control and payment of wages, all else is constant. Therefore, the CBA negotiated by the claimant has a bearing on the employees' ability to perform similar tasks under the respondents, as held in **Munene v United States International University (Cause 105 of 2019) [2024] KEELRC.** The 1st respondent admitted that they have since outsourced labour to the 2nd respondent. They have no control over the employees under the contracted entity's service. Save, the duties undertaken cannot be separated from those defined under Appendices ‘A’, ‘B’, ‘C, and ‘D’ of the CBA negotiated with the claimant. The shop floor is the same. The 2nd respondent has deployed its employees to workplaces ordinarily occupied by the claimant members, who are unionised and covered under a CBA. Under section 26 of the Act and section 48 of the Labour Institutions Act, the 2nd respondent employee undertaking similar duties as employees under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA should not be treated differently or under less favourable terms of employment. The wages due under the CBA apply directly to the employees undertaking similar duties. On this basis, the application of the CBA negotiated by the claimant to the 1st respondent shop floor allows the claimant to enjoy agency fees from all unionisable employees, including those of the 2nd respondent. Upon the registration of the CBA, its enforcement applies equally to all unionisable employees on the same shop floor. The submissions by the respondents that the claimants' assertions on the application of the CBA are without merit, when weighed against the provisions of sections 11, 13 and 26 of the Act, justify the application of the CBA to all employees of the respondents. An independent audit shall assess the terms and conditions for the 2nd respondent employees to ascertain the application of Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA vis—à—vis the wages paid and award accordingly. This is the essence of a negotiated CBA application at the shop floor without differentiation for equal work of equal value. Indeed, the 2nd respondent employees are at liberty to unionise, as submitted by the 2nd respondent. However, that right is regulated under the LRA, sections 11, 13 and 26 of the Act and section 48 of the Labour Institutions Act. Where there exists a CBA with favourable terms and conditions of employment, the more favourable terms apply. for the unionisable employees who are not claimant members as defined under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA, pursuant to section 49 of the LRA, agency fees are deductible by the employer and remittable to the claimant. The Minister has already gazetted Gazette Notice No. 10324, requiring all employers to deduct and remit agency fees for all unionisable employees who are not members of the claimant union but benefit from the CBA. The 2nd respondent is bound. The Labour Officer, Kilifi and Makueni Counties shall jointly enter the shop floor and undertake an audit on the application of Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA enjoyed by the claimant and the 1st respondent and assess the agency fee due from all unionisable employees who are not members of the claimant and enjoy the CBA terms as defined under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA. The labour officers shall report to the court within 30 days. The claimant is seeking that the court issue an order directing that the positions set out under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA are permanent in nature. Whereas there exists CBA, under section 10(3) of the Act, the employer is allowed to secure employment under terms and conditions that favour the entity. This can be through term contracts, piece-rate terms, or as the case may justify. This is an accepted mode of employment in which the employer has the latitude to determine the terms and conditions of employment as required by the business. This is the essence of section 10(3) of the Act. However, once contracted, the subject employees protected under a CBA should not be engaged under inferior terms, regardless of the mode of employment. The outsourced contractor, too, is bound to pay the negotiated wages under a CBA that applies to the same shop floor. Hence, the 2nd respondent employees are not exempt from the CBA terms and conditions, although its employees are not unionised under the claimant. There is, therefore, freedom for either respondent to contract an employee. Save, whoever is the employer, all unionisable employees are subject to the CBA applicable to the shop floor. Those unionised pay union dues. Those unionisable and not unionised are subject to agency fee deduction as held in [**Kenya Union of Commercial and Food Allied Workers v Trans-Mattresses Limited Supermarket [2025] KEELRC 1598 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1598/eng%402025-05-22)**.** Thus, the essence of section 49 of the LRA is to protect the interests of a trade union that has a Recognition Agreement resulting in a CBA. ***49. Deduction of agency fees from unionisable employees covered by collective agreements*** ***(1) A trade union that has concluded a collective agreement registered by the Industrial Court with an employer, group of employers or an employers’ organisation, 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.*** The CBA enjoyed by the claimant applicable to all unionisable employees available to the 1st respondent through the services of the 2nd respondent, agency fees are due to the claimant. This court must respect the provisions of section 49 of the LRA regarding agency fees. The 1st Respondent, having negotiated a CBA with the Claimant and pursuant thereof outsourced labour to the 2nd respondent under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA, both respondents are bound to deduct and remit to the union agency fees in respect of all unionisable employees benefitting from the terms of the CBA who are not members of the union. An agreement signed between the respondents to outsource labour about employees and categories under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA workers cannot take the place of or replace the terms of a CBA that has been registered by this court and which by virtue of section 59 of the LRA becomes incorporated into the terms of service of employees who are subject thereto. The claimant is seeking an order directing the 2nd respondent to convert its employees' employment terms to permanent terms, as outlined above. Section 10(3) of the Act provides for freedom of contracting. Save, the employees secured by the 2nd respondent and fall under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA should not be treated differently and placed under less terms and conditions of employment below the CBA threshold. The employees of the 2nd respondent who are unionisable are subject to deduction and remittance of agency fees to the claimant. The employees of the 2nd respondent are at liberty to unionise under the claimant in securing their right under Article 41 of the Constitution. Pending unionisation of the 2nd respondent employees, there shall be deduction and remittance of agency fees to the claimant pursuant to Gazette Notice No. 10324 publishedby the Minister. Regarding the application of clause 19 of the CBA, the contestation concerns the transport allowance, the bicycle allowance, and breaches of CBA terms and conditions. Omulindi testified in support of the 1st respondent's case that there is no breach of Clause 19 of the CBA, which provides that it shall be at the employer's discretion whether to provide a bicycle allowance. The 1st respondent has provided field employees with a monthly bicycle allowance for those who work outside a 2-kilometre radius. His case was that any employee interested in purchasing a bicycle from management must submit a written request. The employee pays for the bicycle in instalments. The bicycle allowance is paid to the employee, and no one is forced to take the bicycle. He, however, admitted that before 2020, the 1st Respondent had vehicles that would transport its employees. However, due to COVID-19 containment measures, transportation became difficult, and work was affected. Omulindi, therefore, testified that the 1st respondent adopted the bicycle allowance, and some employees opted to take the bicycles upon application. This was just an intervening measure. It is necessary to revert to the CBA provisions. Clause 19 of the CBA between the claimant and the 1st respondent is to the effect that there will be provision of transport, or they shall, at their discretion, provide a bicycle allowance. What comes out clearly to the court from the evidence of Omulindi for the 1st respondent and the submissions by the claimant is that transport provision was a term and condition under the CBA. Due to COVID measures, the provision of transport for employees was reviewed, and bicycles were made available to those who could buy one, upon application. However, the employee has to pay for the bicycle. The terms of a CBA can be reviewed only with the parties' mutual agreement. Clause 19 on transport has not been reviewed. The parties applied intervening measures only during COVID. This phase of the pandemic has since ceased. The Parties should revert to the provisions of clause 19 of the CBA, as agreed. Due to the various changes taking place since 2020 and the employees who have Now adopted the use of a bicycle, without placing any employee at a disadvantage, parties shall negotiate how to revert to the CBA terms of clause 19 of the CBA and report to the court on their agreement within 30 days. In [**Kenya Engineering Workers Union v RM Patel & Partners Limited [2025] KEELRC 3443 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/3443/eng%402025-11-27)**,** the court allowed the parties time to review and renegotiate a CBA to accommodate new and emerging concerns regarding its terms and conditions. See [**Kenya Union of Commercial and Food Allied Workers v Transmattresses Limited [2024] KEELRC 219 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/219/eng%402024-02-08)**.** Hence, a clause on whether to provide transport to the fled workers, pay and allowances in lieu thereof, or provide a bicycle shall be negotiated, with a report back to the court. Such negotiations shall include the participation of the 2nd respondent. The employees secured by the 2nd respondent for the benefit of the 1st respondent shall not be placed at a disadvantage. Regarding costs, the parties are engaged in industrial relations. Further negotiations are to be conducted as outlined above, thereby maintaining an ongoing industrial peace. Therefore, each party to bear its costs. **Accordingly, judgment is entered for the claimant against the respondents in the following terms:** 1. **The CBA between the claimant and the Kenya Sisal Growers and Employers Association, under which the 1st respondent is a member, is binding on the 2nd respondent's unionizable employees.** 2. **The subject CBA a (a) above came into effect on 3 May 2024.** 3. **The County Labour Officers, Kilifi and Makueni, shall enter the 1st respondent's shop floor and undertake an audit of all unionisable employees of the 2nd respondent under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA and report to the court within 30 days from the date hereof.** 4. **Agency fee is deductible from all unionisable employees of the respondents covered under Appendix ‘A’, ‘B’, ‘C, and ‘D’ of the CBA and who are not unionised members under the claimant as (2) above.** 5. **The 2nd respondent shall comply with Gazette Notice No. 10324 as published by the Minister as (3) and (4) above.** 6. **Clause 19 of the CBA on transport shall be negotiated by the parties, including the 2nd respondent, on payment of an allowance to field workers and to report to the court within 30 days from the date hereof.** 7. **Each party to bear its costs.** 8. **Mention on 20 July 2026.** **Delivered in open court this 11th June 2026.** **M. MBARŨ** **JUDGE** **In the presence of:** **Court Assistant: Samuel Maruga** ……………………………………………… and ………………….…………………………...