Banking Insurance and Finance Union v Smep Microfinance Bank Limited (Cause 890 of 2019) [2026] KEELRC 335 (KLR) (6 February 2026) (Ruling)

REPUBLIC OF KENYA IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI ELRC CAUSE NO. 890 OF 2019 BANKING INSURANCE AND FINANCE UNION………….CLAIMANT -VERSUS- SMEP MICROFINANCE BANK LIMITED……….…… RESPONDENT. (Before Hon. Justice Abuodha Jorum Nelson) RULING 1. By a judgment of this Court delivered on 28th September, 2024, the Court directed that the Labour Officer undertake a headcount of all unionisable employees working for the respondent to ascertain whether the claimant had ascertained the needed simple majority under the Labour Relations Act for purposes of entering into a recognition agreement for purposes of collective bargaining. 2. The Chief Industrial Relations Officer appointed a Conciliator for that purpose. The headcount was conducted 1 RULING Cause 890 of 2019 and by its report dated 28th March, 2025, the Conciliator stated that the respondent had 174 unionisable staff. Both parties however contend that the findings by the conciliator did not finally resolve the dispute as it did not state that the claimant had attained the simple majority to enable the respondent enter into a recognition agreement with the claimant union for purposes of collective bargaining. According to the claimant they had by virtue of the finding by the conciliator attained the required simple majority therefore the respondent was obliged to sign the recognition agreement and start remitting to it the necessary union dues. 3. The respondent on the other hand contended that some of the alleged members had either withdrawn their membership to the claimant union, promoted to management or resigned or dismissed from employment. The respondent therefore denied that it refused to sign the recognition agreement but defended their position by saying that the claimant union had not attained the requisite simple majority under section 54 of the Labour 2 RULING Cause 890 of 2019 Relations Act. In response to this allegation, the claimant union stated that the respondent did not notify them of the withdrawal from membership as required by section 48(6) (7) and (8) and that resignation letters were only brought to the attention of the claimant union when they filed these proceedings. 4. The Court in its judgment delivered on 27th November, 2024 observed that the respondent had remitted a cheque of Kshs. 23,124 without attaching the list of those in respect of whom it made the remittance and further that the respondent had admitted that it had in its employment 78 unionisable employees. 5. The conciliator’s report dated 19th May, 2025 found that the respondent had in its employment 252 employees spread across its 39 branches. Out of these, 174 were unionisable which translated to 69.04% and that 78 were not unionisable. The Conciliator having so found, coupled with the fact that the respondent while alleging that some unionisable employees withdrew their membership did not comply with section 48 of the Labour Relations Act referred 3 RULING Cause 890 of 2019 to above, there is therefore no reason why the respondent cannot enter into a recognition agreement with the union for purposes of collective bargaining. 6. Union membership is one of the fundamental principles of the International Labour Organization (ILO) primarily protected by Convention No. 87 (Freedom of Association) and Convention No. 98 (Right to Organize and Collective Bargaining). Workers are guaranteed the right to form and join unions without fear of discrimination, retaliation, or employer interference, including protection against dismissal for union activities. In this regard and from the foregoing and based on the directions by the Court in its judgment delivered on 28th September, 2024 which has since been operationalized by the conciliators report dated 19th May, 2025 which found that the respondent had in its employment 252 employees spread across its 39 branches out of which 174 were unionisable, there remains no justification to refuse to enter into recognition agreement with the claimant union. 4 RULING Cause 890 of 2019 7. The Court therefore orders that the respondent signs a recognition agreement with the claimant union within 30 days of this order and thereafter deduct and remit union dues as from the date of signing the recognition agreement. Parties to thereafter be at liberty to engage in collective bargaining for the purposes of augmenting and protecting the interest of the claimant union members in accordance with ILO Conventions, the Constitution and applicable labour laws of Kenya. 8. It is so ordered. 9. Dated at Nairobi this 6th day of February, 2026 Delivered virtually this 6th day of February, 2026 Abuodha Nelson Jorum Presiding Judge-Appeals Division 5 RULING Cause 890 of 2019