[2014] KEELRC 620 (KLR)

REPUBLIC OF KENYA

IN THE INDUSTRIAL COURT AT NAIROBI

CAUSE NUMBER 1731 OF 2011

BETWEEN

KENYA UNION OF PRINTING, PAPER MANUFACTURERS

AND ALLIED WORKERS ……………………………………………………………………. CLAIMANT

VERSUS

PACKAGING INDUSTRIES LIMITED………………………………………………….. RESPONDENT

AND

KENYA CHEMICAL AND ALLIED INDUSTRIES

WORKERS UNION…………………………………………………………………….INTERESTED PARTY

Rika J

CC. Elizabeth Anyango

Mr. Kivale Said Industrial Relations Officer instructed by the Claimant Union

Mr. H.Okeche Advocate instructed by the Federation of Kenya Employers for the Respondent

Mr. Mr. Opiyo and Mr. Mueke Industrial Relations Officers for the Interested Party

_____________________________________________________

ISSUE IN DISPUTE: RECOGNITION AGREEMENT

AWARD

1. The Claimant filed this dispute through a Statement of Claim received in Court on 13th October 2011. The Respondent filed its Statement of Response on 13th February 2012. The Interested Party filed its Statement of Interest on 5th March 2012. The Parties’ Representatives submitted on 23rd January 2013 and 16th July 2013. The Court advised on the same date its Award, would be delivered on notice.

2. The Claimant submits that it recruited 242 Unionisable Employees of the Respondent, on 8th November 2010. This is out of the total number of 345 Unionisable Employees working for the Respondent, a company involved in plastic paper printing and manufacturing. The Check –Off Lists were forwarded to the Respondent in accordance with Section 48 of the Labour Relations Act Number 14 of 2007. The Respondent did not act on these Forms, and has not signed the Recognition Agreement with the Claimant Union. The Claimant forwarded a draft Recognition Agreement which the Respondent ignored.

3. The Claimant argues the Respondent’s failure is in breach of Section 54 of the Labour Relations Act, Article 41 of the Constitution of Kenya, and International Labour Organization Conventions Number 87 and 98 on the right and freedom of association and collective bargaining.

4. During recruitment, the Claimant realized some of the Employees had also been recruited by the Interested Party. They nonetheless had withdrawn their membership of the Interested Party. They wrote their letter of withdrawal to the General Secretary of the Interested Party on 8th November 2010, copied to the Managing Director of the Respondent among others.

5. The Claimant reported the existence of a trade dispute to the Minister for Labour on 9th December 2010. The Minister appointed a Conciliator Mr. R.M. Kilonzi. The Respondent did not submit itself to the conciliation process, and ignored other meetings convened by the Federation of Kenya Employers aimed at voluntary settlement.

6. The Respondent claims to have a Recognition Agreement with the Interested Party, concluded in 1988. The correct position is that the Employees withdrew their membership from the Interested Party in 2006. They have remained unrepresented from 2006. They have been denied the right of representation. The Employees are discontented with the Interested Party. They have affirmed their choice. The Interested Party does not represent the printing industry, but represents chemicals industry The Respondent is a printing firm. Mr. Kivale submits that all industries have a component of chemical input in their production systems, but this does not mean they should be represented by the Interested Party. He produced bundles of polythene papers with printings, as samples of the main work carried on by the Respondent. He asked the Court to grant an order for recognition, or as a last resort, order that a balloting exercise be carried out at the Respondent to determine the levels of representation.

7. The Respondent submits it has a Recognition Agreement concluded with the Interested Party way back on 26th July 1988. They two Parties subsequently negotiated and concluded a Collective Bargaining Agreement on 9th December 2004.

8. In 2006, Employees of the Respondent went on strike, demanding to be paid their terminal dues in accordance with the terms of the Parties’ Collective Bargaining Agreement. They were paid, and some of them left employment, negating negotiations for the subsequent years.

9. The Interested Party sent the Respondent fresh Check-Off Lists in October 2010, asking the Respondent to deduct and remit trade union dues. This was followed in the next month on 8th November 2010 by Check-Off Lists from the Claimant, demanding for trade union dues. The Interested Party then sent a letter to the Respondent on 15th March 2011, seeking to have the process of Collective Bargaining commence. The Interested Party stated it was not aware of withdrawal of the Employees from the Interested Party. Later on 2nd June 2011, the Interested Party sent another letter to the Respondent, advising it had received letters of withdrawal of membership from Employees of the Respondent, but that these letters were not valid. The Interested Party alleged that the rough papers on which the letters of recusal were written on, did not conform to the law, and were not actionable.

10. The Respondent submits it is not bound to recognize the Claimant Union and act on its Check –Off Lists, as it already has a relationship from 1988, with the Interested Party. Clause 2 [a] of the Recognition Agreement of 1988 states:

‘’the Company accords recognition to the Union as the properly constituted and representative body and sole labour organization representing the interest of workers who are in the employment of the Company……. such recognition should take account of the principle of industrial trade unionism.’’

11. It is not possible to enter into another Recognition Agreement, without terminating the initial agreement. The Employees have not notified the Respondent of their resignation from the Interested Party in terms of Section 48[6] of the Labour Relations Act 2007. The Claim for Recognition has no foundation. The Respondent manufactures polythene and packaging products, which is within the plastics industry represented by the Interested Party. The Claim filed by the Claimant Union offends the Industrial Relations Charter, and the limitations imposed on Article 41 of the Constitution. Trade Unions exist by the principal of mutual respect for each other’s spheres of influence. The Industrial Court has always enforced the decisions of the tripartite committee on such disputes. This dispute has not been subjected to the adjudication of the tripartite committee. The Respondent prays the Court to dismiss the Claim.

12. The Interested Party’s position is that it has a Recognition Agreement with the Respondent concluded way back in 1988. It concluded a CBA with the Respondent in 2004. It is allowed by its Constitution to represent Employees in the plastics industry. The Interested Party recruited 261 Employee of the Respondent in October 2010. The Claimant has been misrepresenting to the Employees at the Respondent that the Interested Party has not represented them well. The same date Employees are said to have recanted their membership of the Interested Party, is the same date the Claimant forwarded Check-Off Lists to the Respondent.

13. Some Employees left after the strike situation of 2006. They were paid terminal dues. Others remained and continued to remit trade union dues. The Recognition Agreement of 1988 was kept well and alive. It is valid to-date. It has never been revoked. It continues until it is terminated. The Claimant’s Constitution does not allow it to represent the Employees of the Respondent. The Interested Party’s Constitution extends to representation of Employees in the manufacturing of industrial organic products including plastics. The Interested Party leaves the proposal made by the Claimant for an alternative order of balloting to be taken, to the Court.

The Court Finds and Awards-:

14. The Interested Party has a longstanding relationship with the Respondent, having signed a Recognition Agreement on 26th July 1988. This relationship was consummated by conclusion of a Collective Bargaining Agreement on 9th December 2004. The turning point seems to have been the strike of 2006. Unionisable Employees went on strike, and in the end some left employment, while others were retained.

15. The event had its effect on the number of Unionisable Employees working at the Respondent. No Collective Bargaining Agreements have subsequently been concluded. The Claimant Union seems to have gone to the Workplace and fished in the troubled waters, convincing a sizable number of the Employees that they were not getting premium for their association with the Interested Party.

16. The result was that in October 2010, the Respondent received Check-Off Lists from the Interested Party, seeking the payment of trade union dues, and re-ignition of the relationship entered into in 1988. The new Union at the scene, forwarded its own Check-Off Lists in November 2010, demanding for trade union dues. At the same time, the Claimant wrote to the General Secretary of the Interested Party, with copy to the Managing Director of the Respondent, advising that Employees, who were formerly Members of the Interested Party, had recanted their membership, and joined the Claimant Union.

17. The dispute was reported to the Minister for Labour who appointed a Conciliator, but there was no settlement. There is nothing to be gained by directing the disputants in the direction of a tripartite committee; they have been through conciliation, and attempted voluntary settlement through FKE. The Conciliator issued his certificate of disagreement pursuant to Section 69 of the Labour Relations Act 2007 on 28th September 2011, paving way for the filing of this Claim in Court on 13th October 2011.

18. The issues as understood by this Court are:

Whether the Recognition Agreement concluded between the Respondent and the Interested Party in 1998 is still valid;

Whether the Court can order the Respondent and another Trade Union, other that the Interested Party, to enter into a fresh Recognition Agreement;

Whether the Claimant should be granted Recognition by the Respondent; and

Whether the Check-Off Lists submitted to the Respondent by the Claimant should be acted on, and trade union dues deducted from the Employees and remitted to the Claimant Union by the Respondent.

19. The Recognition Agreement concluded between the Respondent and the Interested Party had a modification and termination clause. This Agreement would continue in place for a minimum period of 12 months, and thereafter continue in force until amended or terminated. Either party wishing to amend or modify the Agreement would issue the other 1 month written notice, with details of the proposed amendments. In event of it proving impossible to obtain mutual agreement to the amendment of the Agreement, then either party could refer the dispute to the Minister for Labour for formal action in terms of the Trade Dispute Act Cap 234 the Laws of Kenya.

20. There is no evidence to show that the Agreement was terminated in terms of the termination clause. There is nothing shown to the Court to suggest there was a dispute reported to the Minister on the Agreement, for resolution in terms of the Trade Disputes Act then in force. From the perspective of the Agreement, it is still in force, and binding upon the Parties.

21. The Court must however examine other factors, outside the four corners of the document, to assess whether the Agreement is still valid and binding. The main factor that the Court must look at is whether the Interested Party retains a simple majority of the Unionisable Employees. Recognition in 1988 was granted upon the Respondent being satisfied that the Interested Party had recruited a simple majority of the Respondent’s Unionisable Employees. The law then was, and today under Section 54 of the Labour Relations Act is, that the Union is granted recognition if the Unionrepresents the simple majority of the Unionisable Employees. The presence of a simple majority is a continuous requirement, so that if there is a claim by another Trade Union such as the Claimant that the Recognized Trade Union has lost its simple majority, the validity of the existing Recognition Agreement must be questioned. Recruitment is intended to be a continuous process, and the Recognized Trade Union should retain its simple majority.

22. Recognition is a right granted to the Trade Union to represent a defined collective bargaining unit. It is a right which rests on the strength of the collective bargaining unit. De-recognition of a Trade Union may therefore occur, if the membership had changed, and the Recognized Union no longer holds the simple majority.

23. Section 4 [1] of the Labour Relations Act and Article 41 of the Constitution recognize the right of all Employees and Employers, to associate and dissociate. An Employee has the freedom to join a Trade Union and leave the Trade Union. If this is the case, it then follows that the presence of a simple majority may be affected by this movement in and out of organizations. The Trade Union that was initially recognized by an Employer may lose all its Members. What right would it have, to continue holding the right of the sole collective bargaining agency, in the absence of any Members?

24. The Court does not agree with the Respondent that Recognition Agreements create spheres of influence in a particular sector which must be mutually respected. They create a sole collective bargaining agency, which is subject to the continued presence of a simple majority of Unionisable Employees. The focus must be on the Employees, not the Trade Union. Other relevant factors which may affect the validity of a Recognition Agreement include the change in the Constitution of the Recognized Trade Union. The Interested Party may for example, have altered its Constitution to bring its activities out of the industry in which the Respondent is active. The Respondent may also have changed its line of business to exclude organic industrial plastics, and exclude the Interested Party from its area of coverage. The point is that Recognition Agreements are not covenants cast in stone, but are variable, and can be vacated or amended on several grounds.

25. The Agreement concluded in 1988 has been affected by the strike of 2006 which saw a number of Employees who were part of the Interested Party’s simple majority leave employment. It became necessary for the Interested Party to undertake fresh recruitment, shore up its numbers, and validate the Recognition Agreement which had been affected by the supervening event. In the meantime, another Trade Union, the Claimant Union sold its programs and policies to the existing Unioinsable Employees. The employees bought these programs and policies and enlisted in the Claimant Union. There is evidence they resigned from the Interested Party, the only question being whether this was done voluntarily and in accordance with the law regulating withdrawal from a Trade Union.

26. The Court is not barred from declaring a Recognition Agreement in appropriate circumstances, invalid and void, upon proof of factors such as mentioned in the paragraph 24 above. The Employer, Group of Employers, or Employer’s Association may apply to the National Labour Board to de-recognize a Trade Union under Section 54 [5] of the Labour Relations Act. The Recognition Agreement may therefore come to an end by its own terms, through a Court Order, or the intervention of the National Labour Board through an application made by the Employer.

27. The Court is satisfied that in answer to the first issue, the Recognition Agreement of 1988 is no longer valid, as the question whether the Interested Party retains a simple majority has been asked, and remains un-answered. The second issue is answered in the affirmative under paragraph 26 above. In this Constitutional era, the Court must acknowledge the right of Employees to move rapidly in and out of Trade Unions, and take stock of the effect this has on the right of the Trade Union as the sole collective bargaining agent. The last two issues may be answered in the following paragraphs.

28. The Claimant Union is allowed by its Constitution to represent Unioinsable Employees in printing, publishing, packaging, books and books sellers, paper board manufacturers, design and advertising, polythene bags and plastic engraving and printing. The Interested Party’s Constitution enables it to represent Unionisable Employees in the manufacture of basic industrial organic and inorganic chemicals such as plastics among others. The Respondent manufactures polythene papers and packaging materials, which includes printing on the manufactured polythene papers. The Claimant gave to the Court part of the products manufactured by the Respondent. The industrial activities undertaken by the Respondent may be represented by either of these Trade Unions. It is not improper that the Employees have at one time or the other enlisted in either of the Unions. Both Unions have relevance, in the industry to which the Respondent belongs.

29. The Claimant has not convinced the Court that its recruitment of the Employees was voluntary. There is doubt raised on the manner in which the Claimant prevailed on the Employees to write letters withdrawing their membership. In the circumstances, it would be premature to conclude that the Employees of the Respondent subscribed to the Claimant Union of their own volition, or that they recanted membership of the Interested Party voluntarily. It must be noted that the Respondent and the Interested Party have a longstanding relationship, which though not cast in bronze, must not be trifled with, or hurriedly and without solid expression of the views of the Employees having been established, declared to have come to an end. The situation can only be resolved through a democratic casting of the ballot by the Unionsable Employees of Respondent, to choose between the Claimant Union and the Interested Party. Once the Employees make their choice, the Parties and the Court shall be bound by that decision, and order that the Respondent shall grant fresh Recognition to the

chosen Trade Union. The Court Orders-:

[a] The Commissioner of Labour shall appoint a Labour Officer other than Labour Officers involved with the dispute in the past, to conduct a ballot at the Respondent, within 21 days of the delivery of this Award.

[b] The Deputy Registrar of the Industrial Court to designate an Officer from the Court to witness the balloting exercise.

[c] Costs of the exercise to be met by the two Trade Unions.

[d] The result of the balloting shall be filed in Court within 14 days of the conclusion of the exercise.

[e] Parties shall fix the dispute for further orders after the balloting exercise is over.

Dated and delivered a Nairobi this 26th day of February 2014

James Rika

Judge