LABOUR LAW NOTES (v2)

LABOUR LAW NOTES (Updated)

Introduction

Labour as a Factor of Production

The term factor of production describes the inputs that are used in the production of goods or services in the attempt to make an economic profit.

The main factors of production are land, labour, capital, entrepreneurship and ICT.

Labour as a factor of production may thus be described as the exertion of physical and mental effort for monetary benefit. It does not include leisure activities (for purposes of labour law).

Some Characteristics of Labour

1. It is inseparable from the labourer – it is present and joined to the human being exerting it and using it. But when people get paid when they work, they are paid for their services and not for selling themselves
2. No production is possible without labour – it is a necessary activation of the production process. The activeness of it is based on the fact that unlike machines, human beings have feelings, the ability to think and also have preferences
3. Labour has imperfect mobility – it is not always easy for workers to move from one occupation to another due to various limiting factors e.g. culture, language barriers, education and technical skills needed, values, etc
4. It is inherently perishable – it diminishes over time and cannot be stored – unemployed workers cannot store their labour for future employment
5. It is both a means to an end and an end in itself
6. It is an immeasurable factor of production – it cannot be calculated based on units of labour – one cannot determine the production cost of labour. It includes other expenses incurred by and on the labourer since birth. These expenses cannot be accurately determined.
7. It is heterogeneous – no two workers can have the same quality of labour
8. Labour supply is generally inelastic – the supply of labour is dependent and determined by many factors e.g. the population size of the society, sex composition, age, the desire to work, quality of education, etc. Supply of labour is therefore not as changeable as the changes in demand.

Foundations and function/role of Labor Law

The importance of considering the foundations of Labor Law

1.    To guide modernization efforts and reform agendas of labor law – considering the foundations of labor law helps scholars to understand the REASONS for the existence of Labor Law in the first place and helps them to identify the points of departure of modern day labor issues.

2.    It contributes to an understanding of the interrelationship between labor law and other social and economic disciplines. Labor law must be understood in its context.

3.    Foundations lead to the explanation for the PURPOSES of labor law. It explores the norms and values of a Labor Law. What is it intended to achieve? Has it achieved it? What are the hindrances and challenges to its achieving its purpose?

Labor Law was birthed as a result of the dissatisfaction of the working class (the proletariat). It began from revolts in 17^th century Europe but became organized in the 19^th century. Socialism was the ideal behind the rise of labor law.

Causes of the revolts:

·         Increasing gap between the wealthy and the poor

·         Declining incomes of the poor

·         Rising inflation and taxation

·         Famine, plagues and war

·         Religious backlashes.

Foundations of Labor Law

a)      Human Dignity

The term “dignity” comes from the Latin word “dignitas” meaning “worthiness”, inherent worth or inherent respect.

From this notion comes the maxim that “Labor is not a commodity but is also a commodity.” What does this mean?

Commodification should be broadly interpreted as the “practice of thinking about interactions as if they were sale transactions” and applying market methodology to it. Commodification involves the owning, pricing, and evaluating transactions in terms of monetary benefit.

Proponents of universal commodification e.g. Richard Posner, argue that anything some people are willing to sell and others are willing to buy in principle should be subject to laissez faire – the free market

Proponents of universal non – commodification – argue that commodification gives the worker an inferior kind of life due to the alienating of oneself as a piece of property.

Ø  Labor is not a commodity – at the end of the First World War, the Treaty of Versailles was signed. This Treaty set up the International Labor Organization. Article 427 of this Treaty – “Labor should not be regarded merely as a commodity or article of commerce.” (note the use of the term ‘merely’ – seems to give the impression that labor can in some respects be seen as a commodity, but it is not solely a commodity). See the Clayton Act 1914 – “The Labour of a human being is not a commodity or article of commerce.”

 

One major reason that can be advanced as to why labour is not a commodity is because it gives persons a sense of identity and meaning thus allowing them to secure their self esteem/self respect – this is part of the dignity of a human being (David Beatty, 1980) – this may provide a justification as to why employment contracts should not be terminated by the employer without just cause – there should be no unilateral termination by the employer even upon giving of notice ( this prevents the contractual commodification of labour)

 

 

Ø  This expression that labor is not a commodity is attributable to Kell Ingram who was an Irish economist in the 19^th Century. During the Workmen’s Address to the Trades Union Congress in 1880, he made the following statements:

“Our views of the office of the workman must also be transformed and elevated. The way in which his position is habitually contemplated by the economists, and indeed by the public is very narrow, and therefore a false one. Labor is spoken of as if it were an independent entity, separable from the personality of the workman. It is treated a commodity like corn or cotton – the human agent, his needs, human nature and human feelings, being kept almost completely out of view. Now there are, no doubt, if we carry our abstractions far enough, certain resemblances between the contract of employer and employed, and the sale of a commodity. But by fixing exclusive or even predominant attention on these, we miss the deepest and truly characteristic features of the relation of master and workman – a relation with which moral conditions are inseparably associated. ….by viewing labor as a commodity, we at once get rid of the moral basis on which the relation of employer and employed should stand, and make the so – called law of the market the sole regulator of that relation.”

Ø  Labor is a commodity – labor is a function of the market. It is an activity with a productive character. This production can be priced (a price can be attached on it). It has economic value. In as much as one attaches various moral values on labor, one cannot escape from the fact that it also has an economic value. However, this commodification of labor cannot be done without considering the very personhood of the person providing the labor, hence the barrier in seeing labor as merely a commodity.

See the theory of Margaret Jane Radin (1987) that “by making something non-saleable we proclaim that it should not be conceived of or treated as a commodity.” – Radin argues for incomplete commodification. She did not believe in complete in commodification. She argued that there are some things that are to some extent within the market and to some extent outside the market.

she stated that:

“Work and housing are possible examples of incomplete commodification. With respect to the particular aspect, consider that for many of us, work is not only the way we make our living, but also part of ourselves. What we hope to derive from our work and the personal importance we attach to it, are not understandable entirely in money terms, even though we demand and accept money. These ideals about work seem to be part of our conception of human flourishing, and thus the loss of this personal aspect of work would be considered inhumane”

The provision of your labor is the provision of your very self, your very essence…that is why it is difficult to commodify labor. How much are YOU worth in terms of money??

Note the argument that not everything can be said to belong to one or the other of categories (either a commodity or a non – commodity). The division is not always so clear and hence the expression in the Treaty that labor is not MERELY a commodity. Labor is in this “in – between” bracket.

(Are there other things that can be classified to be in between? SEX, HOUSING

Ø  Due to this view, it can be argued that that part of labor that one cannot put a money cost to is to be paid in terms of HUMAN DIGNITY. The expression that labor is not a commodity is linked to the concept of human dignity. See the words of Immanuel Kant that:

“Everything in the realm of ends has either a “price” or a “dignity”. That has a PRICE in the room of which something as an equivalent may be put; but that which is above all price, and admits not substitution by an equivalent, has a DIGNITY. What is subservient to human wants and wishes has a market – price; and what, when there is no want, serves only to gratify a taste, has a fancy price. But that which constitutes the condition, under which alone any what can be an end in itself, has not merely a relative value, i.e. dignity.”

b)      Social Justice

Ø  What is social justice? Can be seen as a dynamic exploration of equity and equality. It implies fairness and mutual obligation in a society. There should be equal opportunities in life and where life chances are not distributed equally, then it means that there should be a distribution of those opportunities in a fair and just manner (distributive justice).

Ø  Social justice seeks to achieve fair distribution of wealth, power and benefits in a society.

Ø  Examples of social justice in Labour Law – e.g. collective bargaining procedures, basis labour standards e.g. minimum wage – these interventions are aimed at improving the position of the weaker members of the labour market

Ø  The traditional view of social justice is that it is for welfare maximization. However, the explanation of social justice as a justification for some of the mandatory and protective aspects of labour law can also be based on two other aspects. 1) market failures in the labour market and 2) behavioural economics where individuals do not make rational assessments of risks in entering into contracts

Ø  Proponent of social justice – John Rawls (1971)

Ø  Human dignity is not sufficient as a foundation without social justice.

Ø  According to Georg Wilhelm Friedrich Hegel’s philosophy, labor is not just an individual activity but is also a social one. A man produces not merely to satisfy his own needs but also on a reciprocal basis for others.

Ø  However with this view, one cannot fail to see the tension between the concepts of human dignity and social justice. Social justice has a component of egalitarianism/equality. Is it not more important to focus on the real needs of individuals rather than constantly engaging in a comparison of people’s lives with others???  A strict view of Egalitarianism/equality will necessitate a comparison.

Ø  A different theory of egalitarianism – constitutive or relational egalitarianism – equality is pursued on the basis of moral grounds. Equality has a value which is extrinsic because it follows from a higher moral value of equal dignity and respect. This is different from instrumental egalitarianism which sees the value of equality as an instrument to reach other value.

Ø  How does this relate to labor law? Can be seen very well in the area of wages. Employees need sufficiently high wages to live a decent life (DIGNITY) But also need wages that stand in relation to the earnings of other employees or even in relation to their additional value to the enterprise/institution (RELATIONAL EGALITARIANISM)

4.      The Market Economy – the free market as a (functional) foundation of labor law

 

Ø  The common view is that labor law is actually a reaction to the principles of the free market. So how can the free market be a foundation for labor law?

Ø  The answer may lie in the view that if Labor Law is a corrigendum (correction) to the free market, it cannot otherwise be, than that labor law is presupposing and built on the existence of this free market.

Ø  Labor law is thus seen as a law that responds to the changing demands of a socially dynamic aspect of modern capitalism.

Ø  The free market principles give labor law its REASON FOR EXISTENCE.

Ø  However, under the neo – classical economics theory, labour law operates as an exogenous intervention in the operation of market forces. Wages and employment are influenced by the forces of supply and demand for labour. The market forces are an implicit regulator of decisions to be employed. Firms/employers who underpay are at risk of losing their workforce or potential employees to employers who pay well.

In the same breath, workers who overdemand for wages risk exclusion from employment as firms will substitute capital or ICT for labour or simply cease to employ.

 

Market forces are considered favourable because they promote equality. This means that there is equal pay for an equal value of work. This also means that there will be a standard wage for labour of comparable productivity regardless of the employer.

Labour law is thus seen as an interference. It is the source of imperfections in the market equilibrium created by the market. Wage regulation actually lowers the demand for labour and “results in the exclusion from the market of those it is designed to help, that is, the low paid.”

5.      Freedom/Liberty as a Foundation for Labour Law

Conceptions of freedom

Negative Freedom or liberty

This was favoured by utilitarians such as Jeremy Bentham. Liberty clearly meant the absence of external interference. “All coercive laws, therefore……and in particular all laws creative of liberty are as far as they go, abrogative of liberty.”

Positive Freedom or Liberty

Ø  This is a conception of freedom as self – realization and self – fulfillment.

Ø  The main proponent of this was Thomas Hill Green (1891)

Ø  He stated about freedom “But when we thus speak of freedom, we should consider carefully what we mean by it. We do not mean merely freeom to do as we like irrespectively of what it is that we like. We do not mean a freedom that can be enjoyed by one man or one set of men at the cost of a loss of freedom to others. When we speak of freedom as something to be so highly prized, we mean a positive power or capacity or doing or enjoying something worth doing or enjoying, and that too, something that we do or in enjoy in common with others. We by it a power which each man exercise through the help or security given by him by his fellow men and which he in turn helps to secure for them.”

Ø  Green emphasizes freedom in the positive sense as the liberation of the powers of all men equally for contributions to a common good.

Ø  With respect to labour, in as much as it is an exchangeable commodity, because it is so closely connected to the person of the worker, restrictions are necessary to ensure that workers will be contributers to the COMMON GOOD.

Ø  For example – laws that ensure safe and healthy working conditions. The argument is that any injury to a person is an injury to the whole society.

Freedom as Capability

Ø  The main proponent of this conception of freedom is Amartya Sen and Martha Nussbaum

Ø  Freedom is the possession of opportunities, options and powers and the actual exercise of those powers

Ø  According to Sen – freedom is to be understood as capabilities – the opportunities that one has to be what he or she desires to be

Ø  Labour law should therefore enhance workers capabilities

Real Freedom

Ø  This is freedom that is based on consent – there is no duress and no undue influence

Ø  The argument is that labour contracts are voluntary in nature and no one is forced into them

Ø  However, what about economic duress? When an employee has no reasonable or acceptable alternative to taking a hazardous job, he may be forced or coerced economically into taking that job (According to Gerald Cohen)

Ø  Cohen argues that all job offers in a capitalistic society are actually coercive because proletarians are not free to leave the working class and become private owners of capital. Proletariate are forced to sell their labour to capitalists.

Ø  However, Robert Nozick denies the concept of economic duress and insists that when a worker accepts to work under less attractive conditions, he or she still has a choice. There is still freedom.

Ø  Take his example of the 26 men and 26 women each wanting to be married.

Ø  He argues that labour contracts are still voluntary even if workers have no other palatable alternatives.

6.      Paternalism

Ø  This is usually seen as an attack on individual autonomy and free choice. It is seen as an attack on Liberalism. According to John Stuart Mill – people should be left legally free to lead their lives as they see fit as long as they do not harm others.

Ø  However Stuart Mill also recognized that there are some forms of paternalism that can be reconciled to the concept of liberalism. He acknowledged that some forms of government intervention or interference are done for the good of individuals without necessarily being a detriment to the liberty of the individual. For example placing legislation regulating maximum hours of working.

Ø  Gerald Dworkin suggested that paternalism is necessary due to the limitations of our cognitive and emotional capacities. See what he says:

“I suggest that since we are all aware of our irrational propensities – deficiencies in cognitive and emotional capacities and avoidable and unavoidable ignorance – it is rational and prudent for us to take out ‘social insurance policies’. We may argue for and against proposed paternalistic measures in terms of what fully rational individuals would accept as forms of protection.”

Simon Deakin argues that paternalism can still be justified in the light of freedom of contract doctrine. He argues that contractual freedom can be seen from a functional perspective i.e. what is the function of contract?

The function of contract is to facilitate market based exchanges. Market based exchanges are exchanges that are dependant on the forces of supply, demand and price

In performing this function, the law of contract DISCRIMINATES in terms of which contracts it is to enforce. It is within this discriminative aspect that paternalism can be justified.

The exceptions or limitations to the laissez faire doctrine are all part of the paternalism argument. E.g. Incapacity and public policy considerations.

Therefore paternalism can be justified where parties need to be protected from the negative welfare implications of their decisions (the rare cases where parties do not display rationality in their choices). This is the TRADITIONAL argument for paternalism.

However, in some forms of regulation which demonstrate paternalism e.g. labour law and consumer protection law, the contractual regulation cannot simply be explained in terms of traditional paternalism. When people enter into employment contracts or consumer based contracts which have welfare – reducing effects, they are not “irrational” per se. They may have limited information or unequal bargaining power BUT NOT IRRATIONALITY.

The basis of intervention based on paternalism therefore is not to protect the parties from themselves but to overcome externalities and to address information asymmetries (inequalities). In so doing, the scope of the market is expanded and the general societal well being is promoted.

NB – An externality is a consequence of an economic activity that is experienced by unrelated third parties. It can be either positive or negative. Externalities are not reflected in the prices charged for the goods or services being provided.

Paternalism can also be seen as a tool of efficiency. That is to correct market failures as a result of transaction costs and assymetrical information, unequal bargaining power, etc. It would thus promote competitiveness and wealth maximization.

In restraining freedom of contract in the labour market, certain protective measures may be put in place. Protective labour legislation, distributive legislation and permissive legislation.

Protective legislation – e.g. legislation prohibiting child labour, or prohibiting sexual harassment, non-discrimination in recruitment and promotion.

Distributive legislation – seeks to affect terms of exchange – e.g. compulsory payment in proper legal tender, minimum wage laws, control of wages and retirement security

Permissive legislation – this facilitates the creation of institutions for collective action by workers, collective bargaining, etc

7. Human Rights Theories as justification or foundation for Labour Law

Ø  this theory appeals to rights as an exclusionary reason why protection of workers interests should be granted. By making labour rights fundamental rights, they override other conflicting policies and considerations

Ø  the two aspects of the theory of rights:

Ø  on the one hand: rights are important for the achievement of certain goals. They are a Means to an End e.g. the maximization of well being or the maximization of utility. However If one uses this aspect of the theory as a foundation of labour law, then it is possible that labour law can be discarded if those goals can be achieved more successfully by other means.

Ø  On the other hand – rights should be seen as fundamental rights or rights having some Constitutional force – this is different from simply seeing labour rights as universal human rights. They must be given constitutional force – the Constitutionalisation of Labour Law

Ø  According to Deakin there is a reason why labour rights cannot fall in the category of universal rights:

a)    The challenge to seeing labour rights as human rights is that they do not seem as compelling as other rights e.g. liberty, security, etc. Indeed because labour rights are socio-economic rights, these kinds of rights have traditionally been seen as lower in the hierarchy of rights than civil and political rights. In fact, in some Constitutions and legal systems, socio-economic rights are considered only as aspirations or statements of policy rather than enforceable legal rights (the justiciability debate on socio – economic rights).

b)    Labour rights do not seem to be universal in nature. They are only applicable to a particular group of human beings – i.e. those who are in employment or employment like situations

c)     A labour right such as the right to fair or just remuneration depends on what each society can afford at any given time. In other words, what is fair and just with respect to remuneration is RELATIVE. However, some other universal rights for example the right to dignity cannot be negotiated. There is no RELATIVISM when it comes to universal rights

d)    Universal human rights are timeless and this means that they do not change over time. They are not dynamic. This is unlike labour rights which seem to be dynamic. They change over time depending on various factors e.g. the systems of production, the forms of work, the division of labour, etc

Thus the major distinctions between universal human rights and labour rights can be summarized as:

1. The moral weight of their claims
2. Their universal applicability
3. The strictness of their standards
4. Their variability over time.

Therefore it may be argued, that instead of viewing labour rights as universal human rights they can be viewed as fundamental rights derived from the theory of justice. This is a Rawlsian Theory.

John Rawls (1972) asked the following question:

“What are the MINIMUM conditions in terms of rules and political institutions that a reasonable person, who is ignorant of what goals and preferences he or she may have and how successful in achieving them he or she will prove to be (a condition known as the veil of ignorance), would set before agreeing to become a member of a society that had the power of coercion over its citizens?”

These basic minimums are not owed to individuals by virtue of them being human but by virtue of them consenting to be members of a society. Fundamental rights (or equal basic liberties) are there to provide essential guarantees for the individual against misuse of power by the State.

Question for consideration – Are Labour Rights Human Rights?

FUNCTIONS OF LABOUR LAW

Introduction:

Ø  The organization of socio – economic conditions of a society will determine the nature of work that is done in that society. This will subsequently determine the kind of labor laws that will govern the work relations in that society. In other words, labor laws have been shaped and moulded by the exigencies and circumstances that are peculiar to the socio – economic era within which they operate. The function of labor law depends on the socio- economic conditions in which it operates.

Ø  See the stages of human development

a)    The hunter – gatherer era – very few in terms of population. Groups were 20 to 50 in number. They were nomadic in nature. There were no storage mechanisms for food so they hunted and gathered at the time that they needed to eat. There was little possibility of accumulation of wealth. There was no incentive to work except for the mere purpose of survival. Therefore, the only labor law that was needed was that which separated roles. The labor was divided depending on gender. The men hunted and the women gathered.

b)    The agricultural era – hunters and gatherers became more skilled and advanced. They required tools and weapons for their activities. Population increased and they began competing for the existing resources i.e. land as hunting ground. There was still scarcity of meat from hunting and therefore man turned to the domestication of animals for meat and the cultivating of crops as an alternative to meat.

The direct result of the emergence of agriculture was the concept of land ownership. Permanent housing structures began to be erected. Demarcations of ownership began to be made on land. The nomadic lifestyle decreased.

There was incentive to work – it was now not merely working for survival but working to store assets for future use.

Skills for hunting were replaced by specific skills which were dependent on someone else’s skill to do something else. E.g. farmers and herders specialized in food (crops and meat). Potters specialized in the containers that stored the food. Metal smiths and carpenters specialized in the making of weapons and tools for cultivation. Priests prayed for the rain and good harvest.

The fact that assets could be acquired meant that there was an incentive to acquire through violence or theft. It also meant the beginning of barter or trade.

There was the concept of “a closed” village – the households of closed villages joined together to operate like a large family where all the economic transactions of the village were controlled by the local landlord or his agents. The village as a whole would contract with the landlord usually for payment in kind, usually a proportion of their crop. When they needed any crop for survival they would provide cheap labor to the landlord. Hence the master – servant concept of labor started. There was a proprietal relationship of master and servant during the agricultural era.

c)     The Industrial Era

Ø  Most conventional historians place the industrial revolution at the middle of the 18^th century (around 1750).

Ø  Mechanical inventions – causing mass production of products – requirement for large numbers of unskilled workers to work in the industries.

Ø  The height of the industrial era has been referred to as Fordism – this term is used to describe the industrial strategy of the US and other countries in the period after the Second World War. The strategy is that there is mass production of a particular product which is complemented by a mass market to consume the goods produced. Henry Ford explained the logic behind the strategy. Employ a worker and pay him highly. This worker will at the end of the day be the same consumer of the goods that have been produced. In other words, highly paid unskilled workers use their income to sustain high consumption of mass-produced products.

Ø  Under fordism, workers were arranged in a hierarchical order. There was clear demarcation of job – descriptions. There was strict control of employees and centralized management structures.

Ø  The legal conception of work and work relationships was transformed. The relationship changed from that of master and servant to the contractual relationship of employer and employee.

Ø  Work became seen as a means of acquiring property and therefore began to individuate workers in society. The worker was now seen as a free man (a person- independent, free, engaging with others through intention and free will and choice) and not a servant (property).

Ø  Work was also seen as a way of getting full acceptance into the community (citizenship)

Ø  Work relationships became premised on Contract. Without a contract of employment, there was no employee – employer relationship

Ø  The industrial era also created the factory worker who was able to join with others to make demands on the employer hence the rise of collective action, trade unions.

Ø  Labor law therefore existed and was functional to the extent that it sought to formalize the status quo. To formalize the relationship between the employer and the employee and to formalize the creation and participation of workers in collective action (trade unions).

d)    The Information Era (Post Fordism) – Gateism

Ø  Technology has changed the manner in which the economy operates and this has changed the nature of work

Ø  The economy based on information is faster, more varied and there is easier communication. This has changed the quality and content of jobs, the skills and competencies required, the content and duration of contracts, the pay structures, etc

Ø  This age is the age of specialization rather than mass production

Ø  Companies and employers have had to restructure and decentralize their operations in order to be more competitive for survival and to meet consumer demands (characteristics of companies – smaller enterprises, smaller teams of workers, more skilled workers, more flexible tools, outsourcing)

Ø  As a result of this, more workers are being locked out of employment due to lack of specialized skills.

Ø  The role of trade unions is being compromised because there are fewer workers (high rate of unemployment). There is less emphasis on the role of the trade union.

Ø  A new approach to labor law is needed in the information era. See the words of D’Adamo (1998) in “The Eat Right Diet” what is required is “a labor law that is no longer identified with the nation state (as political actor, normative power, or national community) and therefore realizes a complex ‘decentralization’; that no longer has as its exclusive centre of gravity the labor relations of stable, full time workers, and might, therefore be defined as “post – occupational”; and that does not merely look after the material needs of a standardized worker, conceived abstractly as the weaker party to the contract who is subject to the risks in face of the employer’s hierarchical organization, but increasingly stresses the worker in flesh and bone, as a person bearing his or her own identity, comprised not only of equality, but also of differences that call for respect and that for this reason might be termed ‘post material.’”

1.      Ordering Function – based on the philosophical view of labor law

Ø  This function assumes that labor relations are power relations. The power struggle is between the employees and the employers. There is an inequality in the power equation. The inequality is both ACTUAL and LEGAL in nature. Actual inequality means that the bargaining power of employees in the negotiation of working conditions is less than that of their employers. Legal inequality means that there is legal dependence. This means that the employee is subordinate to the authority of the employer by virtue of the contract of service freely entered into.

Ø  The function of labor law in such a scenario is to serve as a balancer or a stabilizer. It orders the outcome that would develop otherwise from the functioning of the free market. It does this by providing a countervailing power to off – set the power position of the employer. See the words of Kahn – Freud (1972): “The main object of labor law has always been, and I venture to say will always be, to be a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship.” LABOUR LAW IS THUS SEEN TO HAVE A PROTECTIVE FUNCTION.

Ø  An example of the ordering function – allowing collective labor law – allowing workers to associate themselves in order to increase their power position in relation to their employers.

Ø  Another way the ordering function operates is to balance out all the possible interests in labor relations. A balance needs to be struck between the interests of the employer and the employee. It is possible sometimes that the employer is the one who is a weaker bargaining position. In such a scenario, the law would also seek to protect the employer. The ordering function here would seek to establish a cooperative relationship between workers and employers.

2.      The Well Being Function

Ø  What is meant by well being in this context is “the ability to do valuable acts or to reach valuable states of being.” It is about the quality of one’s work and one’s life. It is the degree to which basic needs as well as aspirations and desires are being met. What is envisioned is not only that minimal living or health standards are being met, but also one’s personal integrity in terms of self – development, protection of family and private life, is being preserved.

Ø  This function of labor law is seen from the “capabilities” approach of Amartya Sen – according to Sen, individual well – being needs to be connected with someone’s capabilities in order to be able to live as a person in dignity. Labor law is thus seen, not as merely protective in nature, but is seen as providing possibilities for people. It is seen as enabling people with regard to work or in the labor market. Labor law is seen as facilitating human capabilities and human capital. The capability approach encompasses careers and professional lives including combinations of work with personal/private lives.

3.      The integrative function

Ø  This function recognizes the fact that an individual belongs to a wider society. Labor is not merely an individual activity but affects many others.

Ø  The integrative function allows for the concept of social inclusion – the inclusion of not just the employee, but also of other stakeholders in labor law decision making. What is also known as the democratic function of labor law by Guy Davidov (2004).

Ø  The integrative function facilitates rules on inclusion, work life balance, involvement of employees in management, etc

Ø  This function reconciles the individual and the collective responsibility that this person has – it refers to the notion of ‘social citizenship’. This implies rights – obligations relationship meaning that social rights also suppose social (economic) obligations. See John Stuart Mill’s observations that everyone who enjoys the protection of the society is at the same time supposed to make an effort in return to take into account the interests of other people.

e)    The intermediary function of law

Ø  This requires that labor law be connected with its environment and context.

Ø  Labor law needs to mediate between reality, policy and aspirations

Ø  Labor laws definition and function cannot be derived from itself. It is not just a set of rules which have no context. It is not a pure idea. It goes hand in hand with the changes and dynamics of social reality.

Ø  The intermediary function of labor law sees labor law as a responsive law – it responds to the social needs. It must therefore be open towards implicit values and policy choices that influence the law.

Ø  It fulfills a gate keeping function where it mediates between the foundations of labor law and new developments and insights.

Ø  Seeing labor law in its intermediary function enables the law to capture developments which are not specifically in the domain of labor law but which are important in the development of labor law. E.g. human rights and constitutional discourses.

4.    Another view of the function of labor law is brought out by Hugh Collins in his article “Regulating the Employment Relation for Competitiveness” (2001) Industrial Law Journal, Vol 30, page 17

Collins suggests that one of the dominant themes of labor law is the enhancement of the competitiveness of business. At the core of the competitiveness of business is the facilitation and stabilization of employment relations.

Some scholars argue that the best way of achieving competitiveness is by way of deregulation as this will increase efficiency while others argue that it is by way of government intervention. Collins argues that neither deregulation nor mandatory rules enable this competitiveness in business. It will require new techniques of regulating employment relations.

The theme of regulating employment relations for competitiveness came about in the 1990’s. The objective is to improve the competitiveness of businesses so that they can compete in a global economy. The question is how can labor law assist in the achievement of this objective?

Collins argues that the best way of attaining this objective is by way of creating “flexibility” and that labor law should facilitate and reinforce this flexibility in work contracts.

Modern work conditions require flexibility because the nature of a lot of work mutates so rapidly causing the distinct possibility that the job will disappear and another job will emerge. The modern form of business organization has embraced technology more and more. And therefore labor relations should embrace these new developments in the job market via the mechanism of FLEXIBILITY. Flexibility thus enhances competitiveness and this promotes development of the economy. Labor law should be seen as promoting this flexibility in work contracts and conditions.

The function of labor laws depends on the socio – economic conditions in which those laws operate at any given time.

The organization of the socio – economic conditions of a society will determine the nature of work and subsequently the kind of labor laws that will govern that society. Labor laws have been shaped and moulded by the exigencies and circumstances peculiar to the socio – economic era in which they operate. Labor law should then reflect and adapt to such circumstances.

Guy Davidov in his article “Articulating Labour Law’s Goals: Why and How” asks some very pertinent questions with respect to the functions and goals of labour law

Ø  Should there be a presumption in favour of the free market?

Ø  Should labour law be considered as a whole body of law and thus consider its functions and goals as such? Or should each aspect of labour law be considered separately? – do we talk of labour law or labour laws?

Ø  Should there be a consideration of the main goals alone or also the ancillary ones?

Ø  Can the functions of labour law be considered from a multidisciplinary approach?

An essential component of all democratic societies is the free market. Laws such as contract, property and corporations law articulate free market rules. They are seen to structure and protect the free market.

e.g. Contract law – gives force to agreements without considering or inquiring into the power disparities between the parties

e.g. property law – it gives employers full ownership and control of the workplace, equipment and the produce of the workplace. The interests of workers are largely ignored

e.g. company law – limits the liability of employers who are companies. The employers thus enjoy the rewards while shifting risks to others, including employees

Labour law is thus seen as an intervention to the rules of the free market. It is seen as performing a redistributive function and enforcing equality e.g. thought collective bargaining, etc

The weakness however of seeing labour law as constantly an interventionist mechanism is that it fails to consider possible evolutions in socio – economic situations where the worker’s position could be stronger than that of the employer

According to Del Punta (2013): “The problem is that in a liberal and democratic society, sooner or later all paternalism should come to an end, since the life choices ought to be entrusted to the individuals’ sovereignty. A protective guardianship which excludes any other perspective is hard to justify in the long period.”

Philosophies driving these functions:

·         The Protective Philosophy – this philosophy starts from the premise that there is an inherent imbalance of power between the employer – employee relationship. Bargaining power is in favor of the employer and thus the employee is considered to be at a disadvantage vis - a  - vis the employer in terms of resources and bargaining skills. The employee is at the mercy of the whims of the employer. The function of labor law under this philosophical view is to assist in redressing this imbalance of power so that equity and fairness will prevail. It serves a protective function. This philosophy is based on a pluralist approach to employment relations. This approach argues that an organization or institution comprises of individuals and groups who have conflicting interests and goals. Despite this conflict, they are interdependent on each other. These conflicts need to be managed so as to avoid destructive  and counterproductive effects. The conflict is managed and controlled by collective bargaining. The employees acting jointly through trade unions can ensure that their interests are taken into account. Labor law should therefore grant the right to form the trade unions/organizations as well as give power to those trade unions to effectively advocate for and enforce the interests of their members and finally to allow the workers the right to strike. In other words, the aim is to protect employees by creating a system which is conducive to meaningful collective bargaining.

 

See the words of Otto Khan – Freund (2000) – Khan Freund was of the view that the employee had very little bargaining power. So he said that “The main object of labor law has always been and we venture to say will always be, to be a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship.”

 

In other words, the function of labor law is t regulate, to support and to restrain the power of management and the power of organized labor.

the main argument behind the pluralist approach is that these relationships cannot survive when one party constantly gains at the expense of the other.

·         The market philosophy

This philosophy is based on the premise that market forces are preferable to state/government intervention in the attainment of economic growth and development. It argues that the operation of market forces is more conducive to the attainment of the efficient allocation of resources than state intervention. It further argues that state intervention (e.g. in the form of legislation) results in inefficiencies and consequently economic decline as a result of creating artificial distortions in the market.

The function of labor law should therefore be not to interfere with market forces but rather to work with them in order to ensure the well – being of the economy and in turn the well – being of its employers and employees.

The market view of economic growth and development gained support in the early 1970’s (see the approaches of Thatcher and Reagan)

SOURCES OF LABOR LAW

A.     The Constitutional Provisions

·         The Constitution is the supreme law of the land – Article 2 of the Constitution.

·         Constitutional protection of labor rights is contained in the Bill of Rights in Chapter 4 of the Constitution

·         Article 28 – every person has inherent dignity and the right to have that dignity respected and protected. (see the discussion on the foundations and theories of labor law – the theory of dignity)

·         Article 27 – equality before the law, no discrimination by the State or any person against another person either directly or indirectly on any ground including race, sex, pregnancy, marital status, health status, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, dress, language or birth; affirmative action provisions; no more than two thirds of the same gender  in elective and appointive bodies

·         Article 30 – no person shall be held in slavery or servitude and no one shall be required to perform forced labor

·         Article 32(3) – no person shall be denied access to any institution, employment or facility or the enjoyment of any right because of the person’s belief or religion. 32(4) – a person shall not be compelled to act, or engage in any act, that is contrary to the person’s belief or religion.

·         Article 36 – protects the freedom of association which includes the right to form, join or participate in the activities of an association of any kind.

·         Article 37 – protects the right to peaceable and unarmed assembly, demonstration, picketing and the presentation of petitions to public authorities.

·         Article 41 – the main constitutional provision concerning labor relations. This provision protects:

For every worker:

Ø  The right to fair labor practices

Ø  The right to Fair remuneration

Ø  The right to Reasonable working conditions

Ø  The right to form, join or participate in the activities and programmes of a trade union

Ø  The right to go on strike

For every employer:

Ø  The right to form and join in an employers’ organization and to participate in the activities of that organization

For every trade union and every employers’ organization:

Ø  The right to determine its own administration, programmes and activities

Ø  To organize and form and join a federation

Ø  The right to engage in collective bargaining.

 

·         Article 43(e) – protects the right to social security

·         See also Article 232 – values and principles of public service – applicable to employees in public service

·         Chapter 6 of the Constitution – the leadership and integrity of state officers.

 

B.    The law of Contract – a contract is a legal device that facilitates the exchange of both goods and services between individuals and groups (in our case we are referring to a contract of service). It is a legally binding and enforceable agreement between two parties whereby each party undertakes specific obligations or enjoys specific rights conferred by that agreement. Contracts can either be in writing or be oral although there are specific contracts that must be in writing for them to be enforceable. With respect to contracts of employment, the Employment Act of 2007 gives further guidance as to whether and which contracts should be written.  Section 8 of the Act suggests that both written and oral contracts of employment are recognized but the following (under section 9(1)) have to be in writing:

 

·         A contract of service for a period of three months or more

·         A contract of service for the performance of any specified work which could not be reasonably expected to be completed within three months.

 

C.    Common Law – this is what is derived from judicial decisions. These are the legal principles that under the doctrine of stare decisis judges develop to form the common law

 

D.    Labor Legislation (the main ones)

·         The Employment Act 2007 – the purpose of this Act is to declare and define the fundamental rights of employees, to provide basic conditions of employment of employees, to regulate employment of children and to provide for other matters related to these issues.

·         The Work Injury Act 2007 – this provides for the compensation to employees for work related injuries and diseases contracted in the course of their employment. This Act repeals the Workman’s Compensation Act (Cap 236, Laws of Kenya)

·         The Labor Relations Act 2007 – this provides for the consolidation of the law relating to trade unions and trade disputes. It also provides for the registration, regulation, management and democratization of trade unions and employers’ organizations or federations, to promote sound labor relations through the protection and promotion of freedom of association, to promote the encouragement of effective collective bargaining and promotion of orderly and expeditious dispute settlement, conducive to social justice and economic development.

·         Labor Institutions Act 2007 – to provide regulation to establish labor institutions, to provide for their functions, powers and duties.

·         The Occupational Health and Safety and Health Act 2007 – the purpose of this Act is to provide for the safety, health and welfare of workers and all persons lawfully present at workplaces and to provide for the establishment of the National Council of Occupational Safety and Health.

·         Retirement Benefits Act 1997 (together with amendments) – establishes the retirement benefits authority for the regulation and supervision of retirement benefits schemes and for the development of the retirement benefits sector.

·         The National Social Security Fund Act of 2013  – establishes the National Social Security Fund and provides for contributions to and the payment of benefits out of the Fund

·         The National Hospital Insurance Fund Act 1998 (see also the NHIF Amendment Bill of 2016) – establishes the NHIF and provides for contributions to and the payment of benefits out of the Fund as well as to establish the NHIF Management Board

·         The Industrial Training Act (Cap 237, Laws of Kenya) – this Act provides for the regulation of persons engaged in Industry

·         The Employment and Labour Relations Court Act (Cap 234B together with the Procedure Rules of 2016) – provides for the establishment of the Employment and Labour Relations Court as a superior court of record and confers jurisdiction on the Court with respect to employment and labour relations and connected purposes.

·         The Pensions Act Cap 189 Laws of Kenya – provides for the grant and regulating pensions, gratuities and other allowances in respect of public service or officers under the Government of Kenya

·         the Bankruptcy Act (Cap 53, Laws of Kenya) – see especially section 38 and 39

·         the HIV and AIDS Prevention and Control Act of 2006 – sections 7, 13, 31

·         the Persons With Disabilities Act No 14 of 2003 – see sections 12 – 17

 

 

 

 

 

 

 

 

 

 

 

 

THE CONTRACT OF EMPLOYMENT AND THE EMPLOYMENT RELATIONSHIP

Introduction

The employment relationship is as dynamic as the society in which it is negotiated and formulated. Regulation thus should regulate both the employment contract and the employment relationship.

The traditional view of the employment relationship and the boundaries of the employment relationship are determined by the existence of a contract of employment. That is, if there is a contract of employment, an employment relationship exists and vice versa.  However according to Honeyball and Pearce (2006) this view of the employment relationship is too simplistic. Employment relationship and contract are not always contemporaneous. Employment relationship may cover a wider period that is covered by the contract of employment.

Consider these two scenarios:

A.    An employer terminates an employee’s contract of employment but the employee is still bound by some restrictive covenants contained in his contract long after his contract has ended. An employer may preserve an employee’s employment status even when the former employee works for a new employer.

B.    An employer and employee enter into a contract but work is to begin at a later date. Employment may be assumed to begin on that later date even though there is a contractual relationship between the parties prior to that date.

When is one deemed to be employed? The answer to this question is important as it will determine whether certain rights and duties will accrue. The answer to this question is especially pertinent given the dynamic/changing work patterns in modern society. E.g. self employed, shift work, employment agencies, outsourced employees (see: Wrigley Company (EA) Ltd v The AG & 2others and another (Petition No. 22 of 2012; Abbysinia Iron & Steel Limited v Kenya Engineering Workers Union (Civil Appeal No. 67 of 2015, Court of Appeal at Kisumu).

 

Question: how can the contract of employment create rights and duties which operate outside the period of employment?

 

Question: how can an employee remain bound to observe restrictive covenants even when the contract of employment has ended?

One argument that has been propounded is that the contract of employment has two phases. The pre – employment stage and the post employment stage.

 

In the pre-employment stage a contract has been signed but the employee is to take up employment at a later date. The employment relationship is thought not to exist even when the elements of a contract are all in place (contractual rights and obligations are applicable). BUT DOES IT EXIST??

 

SEE: Sarkar v South Tees Acute Hospital NHS Trust [1997] 1 CR 673

 

Facts:

·         Ms Sarkar was offered a job with the respondents as an ultrasound manager. She accepted the offer on 22^nd August 1995

·         She was to commence work on 1 October 1995

·         However the respondents changed their mind and on 11^th September 1995, they wrote to Ms S withdrawing their offer of employment

·         S claimed for unfair and wrongful dismissal

·         The Tribunal dismissed her claim for wrongful dismissal on the basis that it did not arise out of termination of the employee’s employment and as such the Tribunal did not have jurisdiction. In other words, there was no employment relationship

·         The Employment had never began

·         S appealed to the EAT which was not convinced by the 2 contract approach (the argument for the respondent)

·         The EAT held that there was only one contract which governed the pre – work and post work phases.

·         According to the Sarkar case therefore, the employee is employed once the contract is made even though he may begin work several months later. It means that the employee can enjoy much wider rights in the pre – work stage than that which is actually envisaged.

The Post employment stage

When a contract of employment is terminated is the whole contract dead or just the performance of the contract? Can the performance be ended for some purposes and not for others? The question is especially pertinent when there are terms restricting the activities of the employee once the employment has come to an end. E.g. restrictive covenants. See the case of LG Electronics Africa Logistics Fze v Charles Kimari (HCCC No. 346 of 2012) – dealing with the Constitutionality of restrictive covenants.

DEFINITION OF EMPLOYER AND EMPLOYEE

Definition of employer

 

·         According to Simon Deakin (2001) – a purely contractual analysis of the employee/employer relationship provides employers with strong incentives to avoid the application of protective legislation.

·         The thrust of Deakin’s argument is that there are situations in which, simply considering who an employer or employee is from a purely contractual point of view may cause a substantive injustice, especially when the “employer” is seeking to evade liability or legal responsibility. He asks the question: “How far is the law prepared to go in upsetting, after the event, the contractual allocation of risks which the parties have made?” in other words, should the law intervene or interfere with the freedom of contract where injustice may take place? Where the bargaining power of the employee is at stake? Are there any justifications for overriding the contractual allocation of risks?

·         This question is especially pertinent due to the nature of modern work arrangements e.g. the presence of an intermediary personal service company. See: Abbey Life Assurance Co Ltd v Tansell [2000] IRLR 387:

In this case, the complainant had set up his own personal service company for the supply of his services as a complete consultant (intelligents). He had contracted with an employment agency (MHC) to supply his services to the end user (Abbey Life). 5 months into the agreement Abbey Life terminated the services of Tansell shortly after he had been diagnosed with diabetes. He brought a claim against MHC and Abbey Life for disability discrimination. The Court of Appeal held that it was Abbey Life and not MHC that was liable. The legislation concerned (the Disability Discrimination Act) imposes equal treatment obligation on a “Principal” to whom the labour of a contract worker is supplied under the terms of a contract entered into between the Principal and another person.

·         According to Deakin, the test for “employer” is three fold:

 

a)    The coordination test – the employer is the one who exercises the powers of centralized management (managerial control). The firm (as an employer) is a space within which managerial control is exercised.

 

b)    The risk test – the focus on the employment relationship was as the conduit through which payments are channeled and risks are pooled (risks of unemployment, interruption to income and work related injury and disease). How are these risks taken care of? For example through Income taxation and National insurance contribution. Relationships which fall outside the employment contract are subject to different tax and social insurance regimes. The traditional labour conception was that the coordination and risk functions were united. The law granted the employer wide managerial powers in return for the imposition of social obligations of risk pooling. But note that the modern fragmentation of the concept of the employer means that the supply of labour through intermediaries implies that the coordination and risk functions are with different entities. The coordination functions rests with the end user of the labour but the risk function rests with the agency (or intermediary) or the individual worker

c)     The equity test – this is where the enterprise is treated as a space in which equal rights are protected. This entails treating all workers the same

Who is an employee?

Introduction

It is fundamental to understanding the relationship between an employee and employer, to ascertain whether there is a contract of employment or a contract of service between the two parties.

In order to also to ascertain whether the parties are bound by that contract, it is essential to determine whether there is an employer and an employee. The definitions are important because if there is an employment relationship in existence, then automatic duties/obligations and rights are created by the law.

Who is an employee?

 

This question is important because many people work for others but are not employed and therefore cannot enforce any contract of employment. An employee is not an employee simply because he receives and obeys orders or is paid for his work.

Example 1

If one engages a building contractor to paint the house or to build a structure, the contractor will come under strict supervision, will receive orders and will have to obey them and will also receive payment for his work, but he cannot be termed as an employee.

Example 2

If one engages a taxi driver to take him to a particular place. The taxi driver may come under strict instructions and will have to obey the instructions, and will also be paid for their services, but cannot be termed as an employee of the customer.

In other words, from these two examples, it is clear that giving orders and receiving payments are not by themselves proof of employment.

An employee is different from an independent contractor.

See the dicta of Denning LJ as he then was in Stevenson Jordan & Harrison v McDonnell & Evans (1952) 69 RPC 10 (Court of Appeal) where he stated that:

 "It is often easy to recognize a contract of service when you see it, but difficult to say where the difference lies. A ship's master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service; but a ship's pilot, a taxi-man, and a newspaper contributor are employed under a contract for services. One feature which seems to run through the instances is that, under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it."

What are the tests of employment?

1. The Control Test

See: Yewens v Noakes (1880) L.R. 6 QBD 530, CA

 

This is sometimes called the “what to do and how to do it” test. In other words, a person can tell another not only what job to do but how to do the job, when to do the job, where to do the job then there is the element of control. The more control that A exercises over B’s work, the more likely it is that B is an employee of A. it is then a question of the extent of power over the other person.

The criticism to this test is that it is not a sufficient test when the worker was taken on because they possess a certain skill or is expected to have discretion in their work. See: Walker v Crystal Palace FC [1910] 1 KB 87 – Does the employer control the background arrangements for the work to be done?

2. the integration test

Under this test, what is being considered is whether the person concerned is fully integrated into the supposed employer’s organization or institution. If a person is employed, his work is done as an integral part of the business of the organization but if one has simply been hired for a purpose, then his work is not integral to the business of the organization but is only an accessory. In other words, is the person part and parcel of the organization or institution?

A criticism of this test is that it does not consider modern work arrangements such as flexible employment arrangements or mixed contracts where one does work under both a contract of service and a contract for services?

See: Stevenson Jordan and Harrison v McDonald & Evans (1952) 69 RPC 10, CA

A management engineer purported to assign to publishers the copyright in a book which was based mainly on information acquired while he had been a servant and later an executive officer in the plaintiff company. Part of that information was the text of lectures delivered publicly by the author while working for the company and part was material acquired while on a particular assignment for an individual client of the company. Held, (1) the author had not betrayed any mystery of the plaintiff's business so as unlawfully to disclose some particular trade secret, but had merely put together the "know-how" of his profession; (2) the author's contract with the company had been a mixed contract, that is, partly a contract of service and partly a contract for services outside the contract, and the work done by him was severable; (3) the material based on public lectures was not made under the contract of service and so was not covered by s. 5(1)(b) of the Copyright Act, 1911; (4) the material acquired while working for an individual client of the company on a particular assignment was made under a contract of service, and fell within the terms of s. 5(1)(b); (5) the material in (4) being severable from the rest of the book, the publishers should be restrained from publishing that section; consequently the appeal would be allowed in part.

3. The economic reality and the multiple test

This test takes an American approach at looking at multiple factors in order to determine whether a contract of employment exists.

a)         Independence – if the worker owns his or her own tools of work, then there is a high chance that they are not employees but are independent contractors.

b)         Is the person being paid wages and sick pay or are they being paid a lump sum? If they are being paid a lump sum, it usually indicates that they are not employed but being hired for a particular purpose.

c)          Tax – deduction of tax and National Social Security contributions point to the element of employment but are not conclusive factors.

d)         Self – description – in some cases, the parties may describe themselves as to what they really are and the nature of their relationship. However, even if the parties describe their relationship that is not conclusive because the courts still have to look at the SUBSTANCE of their relationship and not simply the form of the relationship.

See: Investigations v Minister of Social Security (1969) 2 QB 173 per Cooke, J:

• Is the employee providing his own tools/equipment or is he using that which has been provided by the “employer”
• Is he providing his own helpers/staff or is he using those provided by the employer?
• What is the degree of financial risk that this person takes?
• What is the degree of direct profit from the work?

See also: Ready Mixed Concrete v Minister of Pensions and National Insurance (1968) 1 All ER 433 per MacKenna, J:

• For one to be considered an employee, that person undertakes to provide his or her own work/skill to the employer in return for a wage or other payment
• The employee agrees to be subject to the employer’s control to a sufficient degree to make the other the master
• The other provisions in the contract are consistent with it being a contract of service.

An employee according to the Employment Act 2007 is “a person employed for wages or a salary and includes an apprentice and indentured learner.”

An employer is “any person, public body, firm, corporation or company who or which has entered into a contract of service to employ any individual and includes the agent, foreman, manager or factor of such persons, public body, firm, corporation or company.”

The Courts in Kenya, are increasingly taking the position that the traditional tests are no longer to be exclusively used as determinants of whether an employment relationship exists or not. They will examine the facts and circumstances of each case.

See: Christine Adot Lopeiyo v Wycliffe Mwathi Pere (Cause No. 1688 of 2012) per Mbaru J

See: Charles Ojwang’ v Nyando County Council (Civil Appeal No 68 of 2013)

See: County Assembly of Kisumu & Others v Kisumu County Assembly Board & 6 others (KSM Court of Appeal Civil Appeal Nos 17 and 18 of 2015)

See: Maurice Oduor Okech v The Chequered Flag Ltd (Cause No. 12 of 2011) – see dicta at paras 12 to 15

Regulation of the Individual Contract of Service

Hugh Collins in his article “Legal Responses to the Standard Form Contract” [2007] Industrial Law Journal states that there are two particular regulatory techniques that have been employed to respond to the “standard form contract” which in practice is a UNILATERAL determination of the obligations of the parties by the employer. Standard form contracts (even in the area of consumer protection) tend to limit the employer’s liability or at least limit the employee’s rights. One may argue that these “unfair” standard form contracts can be dealt with by market forces i.e. competition amongst employers that would cause them to offer better terms in order to attract and maintain employees. The disadvantage of taking such an approach is that some of the “benefits” may  be contained in documents which are not readily available to the employee at the time of contracting e.g. some benefits and allowances.

Question: do the statutory requirements remedy this situation?

Thus Collins argues that there are two particular regulatory techniques that have been employed to remedy the unequal bargaining power that employees have and the unfairness of the standard form contract. These are:

• Terms implied by law into contracts of employment – these implied terms play a gap filling role. Any gaps in the agreement can be filled by implying the intentions of the parties or by reference to customs of the trade or the workplace or terms implied by law. Collins sets out two main functions of implied terms: - firstly they assist in the interpretation of express terms and secondly they assist in the control of the content of express terms.
• Statutorily conferred powers for the invalidation of unfair terms in contracts.

The Contractual Basis of the employment relationship

The employment relationship is based on a contract OF services and not a contract FOR services.

Under the Employment Act 2007, a contract of service means “an agreement, whether oral or in writing, and whether expressed or implied, to employ of to serve as an employee for a period of time, and includes a contract of apprenticeship and indentured learning but does not include a foreign contract.”

FORMATION OF THE CONTRACT OF SERVICE

• Just like any contract, the basic ingredients of a valid contract have to be contained in the contract of employment. These are a valid offer and acceptance; intention to enter into legal relations; consideration passing between the parties; capacity to enter into contractual relations; consent of the parties; legality of the subject matter and the objects of the contract. In general, there are no special formalities that have to be entered into to form a contract of employment. That means that they can be either oral or in writing. However under the Employment Act 2007 section 9(1)(a) and (b) any contract of service for a period of three months or more or a contract of service which provides that a certain job or task needs to be performed which cannot be reasonably expected to be completed within three months, MUST be in writing.

See the case of Miguna Miguna v Attorney General (Industrial Cause Number 473 of 2011)

• The employer shall be responsible for drawing up the contract of service and setting out the particulars of employment (section 9(2)). If the employee consents to the contract, then he/she shall sign their name on the contract or imprint an impression of his thumb or one of his fingers in the presence of a person other than the employer (section 9(3)).

If the employee is illiterate or cannot understand the language in which the contract is written, then the employer has a duty to explain the contract to the employee in the language that he understands. – section 9(4)

Terms in a contract of service

a)         Express terms

the Employment Act has made provision for those things which must be expressly stated in the contract. These things that must be expressly in the contract are known as particulars of employment. In section 10 of the Employment Act these particulars of employment can be given in installments but no later than 2 months after the beginning of the employment.

What must be contained expressly? See section 10(2) and (3)

• Name, age, permanent address and sex of the employee
• The name of the employer
• The job description of the employment
• The date of the start of the employment
• The duration and the form of the contract
• The place of work
• The hours of work
• The remuneration or scale or rate of remuneration, the method of calculating the remuneration and the details of any other benefits.
• Intervals at which the remuneration is to be paid
• Particulars of entitlement to annual leave including public holidays and holiday pay
• Terms and conditions with respect to incapacity to work due to sickness or injury, including any provision for sick pay
• Pensions and pension schemes
• Length of notice which the employee is entitled to give and to receive to terminate his contract of employment
• If the employment is for a fixed term, the date on which the employment is to end
• The place of work or where the employee is permitted to work at various places
• Any collective agreements which directly affect the terms and the conditions of employment ( see the definition of a collective agreement in section 2 of the Employment Act 2007)
• The specific disciplinary rules applicable to the employee or refer the employee to the provisions of a document which is reasonably accessible to the employee which specifies the rules Note section 12 (3) – this provision does not apply where as at the date of starting work the employer has employed less than 50 employees.
• The person to whom the employee should apply if dissatisfied with any disciplinary decisions of the employer and to get redress of any grievance relating to his employment and the manner in which the application shall be made.
• Section 10(5) – revision of the contract terms
• Section 10(6) – the employer is required to keep the written particulars prescribed for a period of 5 years after the termination of the employment.

Implied Terms

How can terms become implied into the contract?

a)    The officious bystander test – this test is explained by MacKinnon LJ in Shirlaw v Southern Foundries (1926) [1940] 2 All ER 445, HL “Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily suppress him with a common ‘Oh of course!’”

These are terms which are so obvious that there is no need of expressly stating tem. However see the case of Liverpool CC v Irwin [1976] 2 All ER 39:

In this case, Liverpool CC owned a block of flats in which Irwin was a tenant. The common part of the flats had fallen into disrepair (the lifts, the staircases, rubbish chutes, etc). the council sought to evict the defendant for non – payment of rent with no mention of the obligations of the landlord. The defendant asked the court to imply a term that the council had an obligation to repair the common parts of the block of flats. Per Lord Wilberforce – in some instances, to construct the whole of complete contract, it would require implications (the supplying of what is not expressed). The test is that for any term to be implied it must be a matter of NECESSITY. It should be no more than the nature of the contract requires. An absolute obligation to imply terms would be unreasonable.

See also: Courtlands Northern Spinning Ltd v Sibson & Ano (1988) IRLR 305, CA per Slade, Glidewell and Russell, LJJ

In this case, the employee was a driver who had left his trade union after a dispute causing a bad feeling among the other employees who were all  members of the same trade union. To avoid trouble his employer suggested that he move him to another depot a mile away. The employee argued that this was a breach of contract as there was no mobility clause in his contract. The CA held that there must have been some term about place of work in the contract and if there was no express term, one would have to be implied because of the nature of the relationship in order to complete the contract and give it business efficacy. If reasonable, the parties would probably have agreed to a term that the employer should have power to direct the employee to work at a place within reasonable daily reach of the employee’s home.

Note: it has been argued that while the courts are reluctant to imply terms into a contract, they are more prepared to imply terms in order to control the employer’s express powers, under the contract (Implied terms as a control mechanism).

See also: United Bank v Akhtar (1989) IRLR 507- The Bank in the contract of employment had included an express mobility clause giving it the right to move employees to any branch in the UK and discretion as to whether or not it would give relocation allowances. The applicant was a bank clerk in the lowest grade, was given less than a week notice to move permanently from the Leeds branch to the Birmingham branch. His request for a 3 months’ notice in order to facilitate his moving (i.e. selling his house and taking care of his sick wife) were rejected. The Tribunal held that although an implied term could not contradict an express term that implied term could control its exercise. There was an implied term that the bank would give reasonable notice so that it would not be impossible for the employee to perform his contractual obligation.

b)    Business Efficacy – these are terms which are necessary in the business sense to give efficacy to the contract. These are default rules that are normal in business contracts. For example duties by the employer of care and fidelity, duty of confidentiality.

c)     Custom and practice – what exactly does this mean? Whose custom and practice? Is it a connotation of managerial prerogative so that worker acquiescence means that they are bound or is it or is it that workers do things their way without objection? To be a legally recognized by the courts as an implied term by custom, the custom must be reasonable, certain and notorious. Also policies of the organization which have been brought to the attention of the employees and which has been followed without exception for a substantial period of time. For a custom to be considered part of the contract it must pass the test similar to customary law i.e. that it must be reasonable, it must be well known and it must have existed for a long time.

The potential for the custom and practice test to be one sided in favour of the employee was recognized in the case of Duke v Reliance Systems (1982) IRLR 347 where Browne – Wilkinson, J stated that: “A policy adopted by management unilaterally cannot become a term of the employee’s contract on the grounds that it is an established custom and practice unless it is at least shown that the policy had been drawn to the attention of the employee or has been followed without exception for a substantial period.”

Other implied terms:

a)    Cooperation and mutual trust and confidence – see: Ruth Gathoni Ngotho – Kariuki v Presbyterian Church of Kenya & Presbyterian Foundation (Industrial Cause No. 509 of 2010)

See also: Malik v BCCI [1997] 3 All ER 1 – Per Lord Steyn “…the employer shall not without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.”

This implied term is especially relevant for professionals. They may be required to do more than the contract requires.

b)    There is an implied term of care and safety in the workplace

c)     An implied term that the employee will be competent to perform his duties

d)    An implied term of obedience to instructions – see the classic modern statement of the duty of obedience to instructions as stated by Lord Evershed, MR in Laws v London Chronicle (1959):

“Willful disobedience of a lawful and reasonable order shows a disregard – a complete disregard – of a condition essential to the contract of service, namely the condition that the servant must obey the proper orders of the master and that unless he does so the relationship is so to speak, struck at fundamentally.”

            This does not mean unquestioning obedience to every instruction e.g. when instructed to do something unlawful. Disputes usually arise around whether a duty is within an employee’s  job description. Does an employee always have to work within the strict confines of the contract?

e)    duty of fidelity – this means a duty to give good and faithful service. What does this entail?

                      i.        Secret profits – an employee is under an obligation not to make secret profits from the employment relationship

                     ii.        Disclosure of misconduct – an employee is not under a duty to disclose his or her wrongdoing to the employer. It is a term imposing a duty of good faith and not a contract of utmost good faith (uberrimae fidei). It is a duty to disclose the misconduct of others especially if one is in a senior position.

                    iii.        Competition – in the absence of an express agreement, competition per se is not objectionable. However, if by doing it, it is damaging to the employers business then it is considered a breach of fidelity.

                    iv.        Confidential information

                     v.        Restrictive covenants – see: Lg Electronics Africa Logistics Fze v Charles Kimari (HCCC No. 346 of 2012)

f)     An implied term as to remuneration – see Article 41(2)(a) of the Constitution

g)    There can be an implied term to provide work (on the part of the employer) – does the employer simply have a duty to pay wages or is there a corresponding duty to provide the employee with work? Is there an implied term that the employer must give the employee work?

The classic view is that there is no duty to provide work. See the dicta of Asquith, J in Collier v Sunday Referee [1940] 2 KB 647 – “Provided I pay my cook her wages regularly, she cannot complain if I choose to take any or all my meals out.”

However there are two exceptions to this classical rule:

• Where the wages depend on commission for work actually done or if the worker is paid per piece
• Where refusal to work denies the employee an opportunity to enhance their reputation or build their career e.g. journalists, actors, etc.

LEGAL PROTECTION OF EMPLOYEE RIGHTS

The labour laws seem to have taken a protectionist approach towards employees. The protection that is given to employees is on various levels

General Principles to be observed in Labour Law

Contained in Part II of the Employment Act 2007

a)    Prohibition against forced labour – section 4

Section 2 of the Act defines forced or compulsory labour as any work or service which is extracted from any person under the threat of any penalty including the threat of a loss of rights or privileges which is not offered voluntarily by the person doing the work or performing the service.

This derives from Article 28 of the Constitution (right to have dignity respected and protected); Article 30(2) (no person shall be required to perform forced labour). With respect to children – Article 53(1)) d)

b)    Prohibition of discrimination and promotion of equality opportunity in employment – section 5; see also Articles 27, 28, 41(2) (a); 54 of the Constitution.

c)     Prohibition on Sexual Harassment – see section 6; and Article 28 of the Constitution

d)    Prohibition of the worst forms of child labour – section 53 of the Employment Act

1. Protection of Wages – Part IV

The main reason that people in society work is to get an income to support themselves and their families. When people are able to provide for themselves and their families, there is a sense of socio – economic development that takes place. Therefore, it is important that labour laws provide for the payment of employees of their wages.

A wage is an amount of money paid periodically for work or service done. See the definition of remuneration on section 2 of the EA 2007 – means the total value of all payments in money or in kind, made or owing to an employee arising from the employment of that employee.

The Constitutional Provisions – Article 41 – right to fair remuneration

It is worth considering the meaning of what fair remuneration is. In Australia, a landmark ruling known as the Harvester case ( Ex Parte H.V. McKay) gave some insights that had significant implications on the meaning of this concept. Higgins, J stated that the employee was entitled to wages that “met the normal needs of an average employee, regarded as a human being in a civilized society.” It must be enough to support the wage earner in reasonable and frugal comfort.

ILO Convention (1951) 100 on Equal Remuneration for Work of Equal Value –

Defines the term “equal remuneration for men and women workers for work of equal value refers to rates remuneration established without discrimination based on sex.”

The Convention states that Member states may apply the principle of equal pay for work of equal value using nations laws or regulations, legally established machinery for wage determination, collective agreements between employers and workers or even a combination of all these methods.

The Convention goes on to provide that objective appraisal of the jobs performed should be done in order to determine rates.

Note: The legislation that regulated the minimum wages and working hours was The Regulation of Wages and Conditions of Employment Act Cap 229 of the Laws of Kenya. However, this was repealed by virtue of section 63(1) of the Labour Institutions Act 2007. But Note Section 63(2) of the LIA 2007, which provides that any regulations or instruments made or issued under the Regulation of Wages and Condititons of Employment Act shall continue to have effect as if such regulation or other instrument were made or issued under the LIA 2007.

Note: on every labour day holiday, the President has given a directive to increase the minimum wage of workers in Kenya. The last such directive was given on 1^st May 2013. President Uhuru Kenyatta directed a 14 per cent pay rise for workers to be implemented with immediate effect. The lowest paid worker in the agricultural sector had their salary move from Kshs. 4,258/= to Kshs. 4,854/=. Domestic workers were to move to Kshs. 9,780.95 (in Nairobi, Mombasa and Kisumu) -  See the Regulations of Wages Order 2013

The Employment Act contains provisions (see s. 17) that protect the employee’s right to receive wages. The employer has a duty to pay the ENTIRE amount that he owes the employee, in cash or into a bank account designated by the employee, or by cheque, postal order or money order in favour of the employee, or if the employee is absent, the employer should pay another person who has been given authority by the employee to receive the payment on his behalf. Note, the authority to receive payment on behalf of the employee must be in writing.

The employer must make payment on a working day and during working hours, at the place of employment or near the place of employment or at any other place that is agreed upon between the parties

The employer is not permitted to pay the wages at a place where intoxicating liquor is sold or readily available for supply except where the work or employment of the employee is in such a place

The Act also protects people from being given money or a promise of payment so that they or their dependants can enter into employment.

The Act also provides for the payment of allowances IN KIND to the employee, but the allowance can only be paid if it is for the personal use and benefit of the employee and it does not consist of or include any intoxicating spirit or noxious drug.

There is further protection for the employees especially when the employer has been sued and a decree has been made for the attachment of his property. Section 17(6) (with the exception of an employer undergoing insolvency under Part VIII). After payment of the employee under section 17(6), if there is any balance due to him, then he is still allowed to recover using the due process of the law.

An employer who fails to make the payment of the wages in accordance of the law shall be liable to an offence and will be fined Kshs. 100,000 or imprisonment for two years or both.

When the wages or salary is due – when the employee has been given a task or a piece of work to be done, then the employer may pay, if the task is not completed, at the end of the day in proportion to the amount of the task which has been done, or at the completion of the task (section 18). In the case of a piece of work, the employee is entitled to be paid by his employer at the end of each month in proportion to the amount of work which he has performed during the month or on the completion of the work, whichever is earlier.

In the case of casual workers, the payment is deemed to be due at the end of the day, in the case of an employee employed for a period of more than a day but less than a month, then at the end of that period. In the case of an employee who is employed for a period of more than a month, then the person shall be paid at the end of each month. In the case of an employee employed for an indefinite period or who is on a journey, then payment shall be made at the end of each month or that period whichever is earlier and on the completion of the journey.

It should be noted that if the employer and the employee enter into an agreement of if the court makes an order that has more favourable terms to the employee than what the law provides, then the law shall not interfere.

Even where the employee has been summarily dismissed or the contract of service has been terminated, the employee still has a right to be paid all the money that is due to him up to the date of dismissal. See section 18(4 and (5)

Under section 18(6) no wages are payable during the time when the employee is detained in custody or in prison.

Deduction of wages – section 19 – despite the provisions of section 17(1) which provides for the payment of the entire amount due, some legitimate deductions can be made.

• The amount due as contribution to any provident fund or superannuation scheme or any other scheme approved by the Commissioner for Labour to which the employee has agreed to contribute
• A reasonable amount for damage done to or loss to any property caused by the willful default of the employee
• If the employee absents himself from work without leave or other lawful cause, the employer can deduct the day’s wages for each day that the employee absents himself
• If the employee has a contract of service that specifically entrusts him with the receipt, custody and payment of money, then if there is loss of money through negligence or dishonesty, the amount equal to the shortage can be deducted.
• Amount of money paid to the employee in error as wages in excess of the amount due to him
• Any deduction authorized by law or a collective agreement or a court order or arbitration award
• The employee has requested in writing that the employer makes a deduction and the employer has no direct or indirect beneficial interest in the deduction
• Repayment or part repayment of a loan of money – the deduction should not exceed 50% of the wages payable to that employee.

See the penalties for breaching these provisions as to deduction of wages – section 19(4),(5) and (6).

In as much as the employer has a right to make deductions of wages in certain situations, no deduction shall be made in consideration of or as a reward of employment of that employee.

Under section 20 and 21 the employee has a right to receive a written statement of salary or wages from the employer. The statement must contain the following details:

• Gross amount of wages or salary of the employee
• Any statutory deductions that are made
• Where the different parts of the net amount are paid, the amount of payment and the method of payment

However, casual employees are not entitled to receive pay slips or statements of their wages.

The employees rights are also protected in the case of foreign employers – the employer may be required by the Minister to pay a bond assessed at the equivalent of one month’s wages for all employees who have been employed or who are to be employed by the employer – see section 23

What happens when the employee dies? – section 24

The employer has a duty to notify the labour officer or if there is no labor officer, the district officer of the death of the employee.  The legal representative of the employee shall be paid the wages and any other remuneration and property due to the employee as at the date of death within 30 days of proving that one is the legal representative.

Once the payment is made to the legal representative, the employer is under a duty within 7 days to show proof of such payment to the labour officer or the district officer.

Also where an employee is killed during the course of his employment or is incapacitated by an injury during the course of his employment for a period of more than three days, then the employer must make a report to the labour officer or the district officer – section 24(4)

 

An employer who wrongfully deducts the salary of the employee shall be liable to a fine of not more than Kshs. 100,000 or to imprisonment of not more than 2 years or to both, and also shall be entitled to pay the amount of money that has wrongfully been deducted from the employee. The employee who feels that their wages or salaries have been wrongfully deducted shall file a complaint to a labour officer not later than three years after the unlawful deduction has been made – section 25

There are other rights and duties that are set out in the Labour regulatory framework.

Note: Section 26 (1) of the EA 2007 provides that the provisions in Part V constitute the basic minimum terms and conditions of a contract of service. One cannot contract below these terms and conditions…but one can have BETTER terms and conditions. See section 26(2) which gives validity to this.

2. Hours of work – Note: an employer has the power to regulate work hours but an employee shall be entitled to at least one rest day in every period of seven days – section 27

There are regulations regarding the maximum number of working hours. The regulations that were made under the Regulation of Wages and Conditions of Employment Act still continue to have effect. The main subsidiary legislation that was made to regulate work hours was the Regulations of Wages (General) Order. It should be noted that this Order does not cover workers in the agricultural sector who are regulated under a different subsidiary legislation. Rule 5 of the Order regulates the hours of work and Rule 6 regulates the manner in which overtime is calculated.

Under section 11 of the Repealed Act, the Minister was empowered to receive proposals from various sectors of work on the remuneration and conditions of work for that particular sector. There are therefore a number of subsidiary legislations covering for instance, knitting mill workers, indentured learners and apprentices, baking and confectionary and biscuit making industry, catering and hotel workers, security guards, constructions workers, etc.

Case Law to show how the courts have dealt with working hours:

Ø  Joseph Okindo & Ronald Barasa v Vapor Sports Ministries (Industrial Cause No 2018 of 2012) -  With respect to working hours for security guards

Ø  Esther Wanjiku Nderitu v African Quest Safaris Ltd ( Industrial Cause No 1569 of 2011) – this case also sets out how far the parties have autonomy to make their own agreement with respect to work hours and overtime

Ø  Julius Gicheru Gachahi & George Thiongo Ndirangu v The Board of Governors Maragi Secondary School ( Indsutrial Cause No 1118 of 2010)

Ø  Fredrick Adika  Mugita v Appollo Onyango Signa T/A Mwandu En Kinda Investments (Industrial Cause No 491 of 2012) – Calculation of overtime

3. annual leave – an employee shall be entitled to annual leave of not less than 21 working days with full pay – section 28
4. Maternity leave – a female employee shall be entitled to three months maternity leave with full pay. Once the three  months are over, the female employee has the right to return to the job which she held immediately prior to her maternity leave or to a reasonably suitable job on the terms and conditions that are not less favourable than those which applied to her before she went on maternity leave.

Note: Constitutional Provisions and EA 2007 provisions with respect to non-discrimination based on pregnancy.

See the case of Jane Wairimu Macharia v Mugo Waweru Associates (Industrial Cause No 621 of 2012) – where the peititoners contract of service was terminated when she applied for maternity leave.

The only condition to maternity leave is that the female employee gives not less than seven days notice in advance of the leave in writing and also to produce a certificate as to her medical condition from a qualified medical doctor or midwife. A male employee shall be entitled to two weeks paternity leave with full pay – see section 29

5. Sick leave – if an employee has worked for his employer for two consecutive months, he shall be entitled to sick leave of not less than 7 days with full pay and thereafter to sick leave of 7 days with half pay, subject to the production of a valid medical certificate to that effect. – section 30

See the case of Banking Insurance and Finance Union of Kenya v Barclays Bank of Kenya Ltd (Industrial Cause No 1560 of 2013) – it was established in this case that if the employee does not take steps to notify the employer as to his or her illness, then the employer has justifiable cause summarily dismiss the employee on grounds of absconding or absenteeism.

6. housing and house allowance – the employer has a duty at his own expense to provide reasonable housing accommodation for each employee either at or near to the place of employment or shall pay the employee an amount of money sufficient to the rent that the employee would pay to obtain reasonable accommodation section 31
7. provision of water – the employer has a duty to provide a sufficient supply of wholesome water for the use of the employees at the place of employment and within a reasonable distance of any housing accommodation provided for the employees by the employer – section 32
8. Provision of food – where provision of food has been expressly agreed to in or at the time of entering into the contract of service, the employer shall ensure that the employee is property fed and supplied with enough and proper cooking utensils and means of cooking, where the contract of service has a term and condition on the provision of food – see section 33
9. Medical attention – the employer has a duty to ensure the provision of sufficient and proper medicine for the employees’  illness and if possible medical attendance during serious illness. The employer shall take all reasonable steps to ensure that he is notified of the illness of an employee as soon as is reasonably practicable after the illness has occurred the first time – section 34

See: Kenya Plantation and Agricultural Workers Union v James Finlay (K) Ltd (Industrial Cause No 24 of 2013)

Legal protection of the interests of employees under other legislations

Under the Labour Relations Act 2007

1. Every employee has a right to participate in the forming of a trade union of join a trade union or leave a trade union. A trade union is an association of employees whose principal purpose is to regulate relations between employers and employees including any employer’s organization. Once the employee has joined the trade union, they have a right, subject to its constitution, to participate in its lawful activities, in the election of officials and representatives, stand for election to be an officer or official of the trade union and to seek appointment as a trade union representative
2. No person shall discriminate against an employee or any person seeking employment for exercising his right to join or be part of a trade union.
3. Employers shall not require employees of persons seeking employment not to be or become a member of a trade union or to give up membership of a trade union, they shall also not dismiss employees or in any other way prejudice employees because they are members of trade unions, or have been past members of trade unions.

Under the Work Injury Benefits Act, 2007

1. every employer has to obtain and maintain an insurance policy with an insurer approved by the Minister, in respect of any liability that the employer may incur to the employees under this law
2. an employee who is involved in an accident which results in the employee’s disablement or death is entitled to the benefits that are provided for under this particular law
3. The employer is liable to pay compensation to the employee who has been injured while at work. But if the accident or the death has been caused by the deliberate and willful misconduct of the employee, then the employer is not liable to pay the compensation

The question that arises is what does course of employment mean? See section 10(4) of the Act.

4. Where an employee is out of the Kenya and is injured in accident in the course of his employment, he shall be compensated by his employer.
5. Compensation under this Act for the death of an employee shall not form part of his estate.

Under the Occupational Safety and Health Act , 2007

This Act not only applies to employers, but to all OCCUPIERS. The law defines an occupier as a person in actual occupation of a place whether they are the owner of that place or not and also includes employers.

1. the employer has a duty to provide and maintain plants and systems and procedures of work that are safe and without risks to health
2. the employer has a duty to plan for the safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances
3. the employer has to provide information, instruction, training and supervision that is necessary to ensure the safety and health at work of every employee
4. the employer has to maintain the workplace in a condition that is safe and poses no health risks
5. the employer has to provide facilities that are safe for the workers
6. The employer has to inform the employees of any risks from new technologies and any imminent danger.
7. if an employee makes a complaint about a matter which the employee considers is not safe or is a risk to his health, the employer shall not discriminate against that employee

 

MORE ON THE LEGAL PROTECTION OF EMPLOYEE INTERESTS

Under the Employment Act, the employer is under a duty to keep employment records of all the employees who are employed by him and with whom he has entered into a contract of service. See section 74(1) of the Act

Any employer who makes or causes to be made false entries about the employee in the register commits an offence and shall on conviction of the offence be liable to a fine not exceeding Kshs. 100,000/= or to imprisonment for a term not exceeding six months or both.

Protection of Children – Part VII of the Employment Act 2007

The Employment Act does not per se make it illegal to employ a child except in certain situations.

A child is defined as a person who has not attained the age of eighteen years.

Employment of a child means where a child provides labour as an assistant to another person and his labour is deemed to be the labour of that person for the purposes of payment, or where the child’s labour is used for gain by any person or institution, and where there is in existence a contract for service where the party providing the service is a child whether the person using the services does so directly or by an agent.

The Employment Act prohibits anyone from employing a child into any activity which constitutes the worst form of child labour. The term “worst form of child labour” means employing children or using children in all forms of slavery or practices that are similar to slavery for example the sale and trafficking of children, debt bondage, forced or compulsory recruitment of children for use in armed conflict, use or procuring the services of a child for prostitution or for the production of pornography and pornographic performances, using a child for illegal activities especially the trafficking of drugs and using the child to do activities which are likely to harm the health, safety or morals of the child.

Any person who suspects or considers that a child is being employed in the worst form of child labour may make a report or complaint to the labour officer or a police officer of the rank of an inspector and above. Once the complaint has been received, the labour officer or the police officer shall within 7 days of receiving the complaint, carry out the investigations and submit a report to the person who made the complaint and also to the Minister for Labour. On the other hand, if the labour officer or the police officer does not consider it advantageous or suitable to investigate then he shall in writing inform the person who made the complaint and also the Minister, the reasons for not carrying out the investigations.

Another way child employees are protected is that the labour officer may terminate any contract of service regarding a child on the grounds that, in the opinion of the labour officer, the employer is an undesirable person, or that the nature of the employment constitutes worst forms of child labour or for any other cause which is allowed by law. The labour officer may also give a notice preventing any employer from employing a child in any class or description of employment that is specified in the notice.

Any employer who is aggrieved by the notice or the decision of the labour officer may within 30 days after the date of the service of the notice appeal in writing against that notice to the INDUSTRIAL COURT. The court may confirm or set aside the notice. The decision of the Court shall be FINAL.

No person is allowed to employ a child who has not yet attained the age of 13 years whether gainfully or not.

A child between 13 and 16 years of age may be employed to perform LIGHT work which is not likely to be harmful to their health or development and which will not prejudice the child’s attendance at school or his participation in vocational orientation or training programmes that have been approved by the Minister or his capacity to benefit from the instructions received.

The contract between an employer and a child, who is between the age of 13 and 16 years, shall be ORAL. (Except contracts of apprenticeship or indentured leadership under the Industrial Training Act). Any person who makes a written contract or causes the child to be employed under a written contract shall be liable to a fine not exceeding Kshs. 100,000 of to imprisonment for a term not exceeding 6 months or both.

 

Children between the ages of 13 and 16 shall not be allowed to be employed in an industry to attend to machinery (except for contracts under the Industrial Training Act for contracts of apprenticeship and indentured learning).

No person shall employ a child in an industrial undertaking between the hours of 6.30 pm and 6.30 am. The Minister in cases of a serious emergency and when the public interest allows it, may by notice allow a child to be employed between those hours. A person may employ a male young person (a person who has attained the age of 16 years but has not attained the age of 18 years) in cases of emergencies which could not have been controlled or foreseen and which interfere with the normal working of the industrial undertaking and which are not of a periodical nature.

The employer who employs the child shall keep and maintain a register containing the details of the child with respect to the age and date of birth of the child, the date of entry and leaving the employment and any other particulars which may be required by law.

A labour officer or an employment officer of a medical officer may require that a child in employment to be medically examined at any time during the period of the child’s employment.

When there is an issue about the age of the child, the court after hearing the evidence, shall determine the age of the child and that decision shall be final.

The penalty for employing a child outside the provisions of the law – see section 64

What if a child is killed dies or is injured as a result of the employer contravening the provisions of the Act? The employer, in addition to any other penalty by law, shall be liable to a fine not exceeding Kshs. 500,000 or to imprisonment for a term not exceeding twelve months or both and the whole or part of the fine may be applied for the benefit of the injured child or his family.

LEGAL PROTECTION OF EMPLOYER INTERESTS

As mentioned earlier, the current Employment legislation seems to be more protective of employee interests than it is of employer interests.

However there are some provisions which may be seen as being protective of employer interests.

• Under the wages provisions, an employer in certain situations is empowered by law to make deductions from the salary of the employee
• Other rights and legal protections of the employers are contained in the termination and dismissal section of the course which we shall examine later.

As a student, you need to consider the provisions which can be construed to provide protection for the interests of employers.

Regulation of the Individual Contract of Service

Hugh Collins in his article “Legal Responses to the Standard Form Contract” [2007] Industrial Law Journal states that there are two particular regulatory techniques that have been employed to respond to the “standard form contract” which in practice is a UNILATERAL determination of the obligations of the parties by the employer. Standard form contracts (even in the area of consumer protection) tend to limit the employer’s liability or at least limit the employee’s rights. One may argue that these “unfair” standard form contracts can be dealt with by market forces i.e. competition amongst employers that would cause them to offer better terms in order to attract and maintain employees. The disadvantage of taking such an approach is that some of the “benefits” may  be contained in documents which are not readily available to the employee at the time of contracting e.g. some benefits and allowances.

Question: do the statutory requirements remedy this situation?

Thus Collins argues that there are two particular regulatory techniques that have been employed to remedy the unequal bargaining power that employees have and the unfairness of the standard form contract. These are:

• Terms implied by law into contracts of employment – these implied terms play a gap filling role. Any gaps in the agreement can be filled by implying the intentions of the parties or by reference to customs of the trade or the workplace or terms implied by law. Collins sets out two main functions of implied terms: - firstly they assist in the interpretation of express terms and secondly they assist in the control of the content of express terms.
• Statutorily conferred powers for the invalidation of unfair terms in contracts.

The Contractual Basis of the employment relationship

The employment relationship is based on a contract OF services and not a contract FOR services.

 

Under the Employment Act 2007, a contract of service means “an agreement, whether oral or in writing, and whether expressed or implied, to employ of to serve as an employee for a period of time, and includes a contract of apprenticeship and indentured learning but does not include a foreign contract.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TERMINATION OF CONTRACT OF SERVICE AND DISMISSAL FROM EMPLOYMENT – Part VI of the Employment Act 2007

See Article 47 of the Constitution – the right to fair administrative action – that is expeditious, efficient, lawful, reasonable and procedurally fair and a right to be given reasons for the action.

Introduction

The contract of service or employment is a contract like any other and the ways that other normal contracts are terminated, ideally should be the way that a contract of employment should be terminated. However, the common law rules that were used in terminating employment contracts, favoured the employers more than the employees. The Employment Act 2007 contains statutory provisions that govern the termination of the contract of employment and the dismissal of employees from employment (statutory protection of employee rights????)

The common law situations where a contract could be terminated were:

1. Where the contract is terminated by giving notice – if there was no provision, custom or agreement as to the amount of notice that should be given, then the notice to be given should be reasonable. What is reasonable is then a question of fact depending on the various surrounding circumstances, for example, the employee’s position, the seniority of the employee, the length of service, the rate of pay and the frequency of the pay.
2. Where the contract is frustrated – this is where the original nature of the contract has gone through a fundamental change. The original form of the contract becomes impossible to perform. For example, if the employee becomes ill or is imprisoned, etc.
3. In situations concerning partnership and company employees – in partnerships, when a partner retires and the business is subsequently transferred to the other partners, the contract of employment of the partnership employee will come to an end automatically. Similarly, in companies, if a receiver is appointed, then the contract of employment of the employees comes to an end. Also when the company is under compulsory winding up, then this amounts to automatic dismissal of the existing employees.
4. Where the employee is claiming wrongful dismissal. Here the employer has breached the contract by not giving the required period of notice.

 

The Employment Act 2007, still has some echoes of the common law, but has provided for rules of termination and dismissal which are strict and which seek to protect the interests of the employee.

Where the contract is not one to perform a specific work or to undertake a journey, then if the contract is to be performed in Kenya, the following rules as to termination shall be used (note: the rules depend on the type of contract)

• A contract where wages are paid daily – the contract can be terminated by either party at the close of any day without giving notice
• A contract to pay wages periodically at intervals of less than one month – the contract can be terminated by either party at the end of the period next following the giving of notice in writing – for example: if A has been employed by B and is paid at the end of every two weeks, then either A or B can terminated the contract by giving a two week notice in writing of termination
• A contract to pay wages or salary at intervals of one month or more than one month – the contract can be terminated by either party by giving 28 day notice. However if the contract between the parties requires giving notice of more than 28 days, then it shall still be valid and not against the law. An employee whose contract has been terminated in this way shall be entitled to service pay for every year worked but not if the employee is a member of a registered provident fund scheme under the RBA, or a gratuity or service pay scheme established under a collective agreement, or any other scheme established and operated by the employer whose terms are more favourable than those under the Act or the National Social Security Fund.

The employer must ensure that the employee understands the notice of termination. If the employee does not understand, then the employer shall ensure that the notice is explained orally to the employee in a language that he (the employee) understands.

The Employment Act allows both parties to terminate the contract without notice on the condition that the party terminating will pay the other the remuneration which would have been earned by him or paid by him in respect of the period of notice to be given. It should also be noted that the employer may waive the whole part or a part of the notice. In such a case the employer shall pay the employee remuneration equivalent to the period of notice that is not served by the employee.

 

Protection of casual employees

The Employment Act gives protection to casual employees who work for a continuous period of working days which amount to a month or more. In such cases, the contract of the causal employee is converted to one where wages/salary is paid monthly and shall be treated accordingly. See the case of Harrison Meshack Lusimbo & Gilfrine Noah Masio v Mareba Enterprises Limited (Industrial Cause Number 2007 of 2011).The casual employee shall then be entitled to the same rights as a salaried worker when it comes to rest days within the week and sick leave.

Also another protection of casual employees is that where there is a dispute between the employer and the casual employee, the Industrial Court shall have the power to vary the terms of service of the casual employee and declare the employee to be employed on terms and conditions of service that are consistent with the Employment Act.

Also, if a casual employee is aggrieved by the treatment of his employer he may file a complaint with the labour officer. See section 88 also (penalty for not complying with the law)

Where the period of the contract expires or where there was no express agreement as to the period of the contract and where the employee is on a journey, the employer may, for the purpose of the employee completing the journey, extend the period of service of the notice for a sufficient period which is not more than one month in order to enable the employee to come back from the journey.

Termination on account of redundancy

The term redundancy means – the loss of employment, occupation, job, or career by involuntary means through no fault of an employee, involving the termination of employment at the initiative of the employer, where the services of the employee are superfluous and the practices commonly known as abolition of office, job or occupation and loss of employment.

Basically, redundancy usually occurs where the labour of the employee is no longer necessary.

Where the employer wants to terminate the contract of the employee due to redundancy, he first must comply with certain conditions:

• If the employee is a member of a trade union then the employer must notify the union and the labour officer of the area where the employee is in charge the reasons for and the extent of the intended redundancy not less than a month before the date of the intended termination.
• If the employee is not a member of  a trade union, then the employer will notify the employee personally in writing and also inform the labour officer
• The employer must show that he considered the following factors; the seniority in time, skill, ability and reliability of each employee in the class of employees that are to be affected by the redundancy
• Where there is a collective agreement between an employer and a trade union that sets out the terminal benefits that are payable on redundancy, the employer has not placed the employee at a disadvantage for not being a member of the trade union.
• Where leave is due, the employer has to have paid the leave dues in cash
• The employer must have paid the employee who has been declared redundant, not less than one month’s notice or one month’s wages in lieu of notice
• The employer must pay to the employee who has been declared redundant a severance pay. This pay is calculated at the rate of not less than 15 days for each completed year of service.

Note:   Where the employee services are terminated because the employer’s business has come to an end due to Insolvency of the employer, then the redundancy provisions do not apply to the employer and the employee, but they are governed by different provisions of the Act.

Termination on grounds of misconduct, poor performance or physical disability

Misconduct is the most common ground that employers use to terminate the contract of employment. Misconduct implies a situation whereby there is a code of conduct or rules that the employee is supposed to follow but has failed to do so. Earlier we saw that where one of the provisions of the contract of service should be a statement containing the disciplinary rules that are applicable to the employee and the person to whom the employee should apply if they are not satisfied with any disciplinary decision relating to them. If the disciplinary panel decides that the employee is guilty of misconduct, then the employer has a right to terminate their contract on that ground.

If the employer wishes to terminate the contract of an employee on the grounds of misconduct, poor performance or physical incapacity, he must first explain to the employee in a language that the employee understands the reasons why the employer is considering terminating the contract. The employee is entitled to have another employee or a shop floor union representative of his choice during this explanation. Before the employer terminates the contract, the employer shall listen to any representations which the employee may make on the grounds of misconduct or poor performance and also any representations that the person who is accompanying the employee may make.

Probationary contracts

Definition – this is a contract of employment which is of duration of not more than 12 months or part of that period and is in writing and specifically states that it is a probationary contract.

A probationary contract shall not be for more than 6 months, but the probationary contract can be extended for a further period of not more than 6 months with the agreement of the employee. An employer cannot employ an employee on a probationary period for more than a year.

If any of the parties (that is the employer or the employee) wishes to terminate the probationary contract, then they may terminate by giving not less than 7 days notice of termination of the contract, or by paying the equivalent of seven day’s wages instead of the notice.

Summary Dismissal

Summary dismissal takes place when the employer terminates the employment of the employee without notice or with less notice than the employee is entitled to under the employment Act or the contract. An employee may be summarily dismissed from employment if he has committed a gross misconduct that indicates that he has fundamentally breached his duties and obligations under the contract for service.

What actions amount to gross misconduct?

• When the employee absents himself from the place he has been appointed to work without leave or any other lawful excuse
• When an employee becomes unwilling or incapable of performing his work properly during working hours due to intoxication
• When the employee neglects to do the work which he was under a duty to perform OR if he carelessly and improperly performs any work which by its nature, he was under a duty to perform carefully and properly.
• Where an employee uses abusive or insulting language or behaves in a manner that is insulting to his employer or a person placed in authority over him by his employer
• Where an employee knowingly fails or refuses to obey a lawful and proper command that was within his duty to obey which has been issued by his employer or by someone who has been placed in authority over him by his employer
• Where an employee is arrested for a cognizable offence that is punishable by imprisonment and is not within 14 days either released on bail or on bond or otherwise lawfully set at liberty (a cognizable offence is an offence which a police officer may arrest without a warrant; a non – cognizable offence is where the police officer may arrest with a warrant)
• Where the employee has committed or is reasonably suspected to have committed a criminal offence against the employer or the property of the employer.

When an employee is summarily dismissed, the employee has a right to dispute whether the action he committed constitutes lawful and justifiable grounds for summary dismissal.

Unfair termination of employment

The general rule is that no employer shall terminate the employment of his employee unfairly.

What amounts to unfairness?

• If the employer fails to give reasons for termination of the employment of the employee, it shall be deemed to be unfair
• If the employer fails to prove that the reason for termination is valid
• If the employer fails to prove that the reason is a fair reason that is related to the employee’s conduct, capacity, or compatibility or based on the operational requirements of the employer
• If the employer fails to prove that the employment was terminated according to fair procedure
• If the employer did not act according to justice and equity in terminating the employment of the employee

 

Question: what is justice and equity? The Act states that in order to determine whether an employer has acted in justice and equity in terminating the employment of the employee, there are certain factors that it shall consider.

• The procedure that the employer used in reaching the decision to dismiss the employee, the way the decision was communicated to the employee and any appeal against that decision
• The conduct and capability of the employee up to the date of termination
• The extent that the employer has complied with the statutory provisions connected with termination
• The practice of the employer in dealing with the type of circumstances which led to the termination
• The existence of any previous warning letters issued to the employee

See the situations under section 46 which do not amount to fair reasons for dismissal or for disciplinary actions.

What can an employee do when summarily dismissed or where the contract has been unfairly terminated?

Within three months of the date of the dismissal, the employee may make a complaint to the labour officer. The labour officer will give an opportunity to all the parties to state their case and will give his opinion as to the best way of settling the matter. At the time of making the complaint before the labour office, the employee is not entitled to have an advocate to represent him but he may be assisted by an official of a trade union or of an employer’s organization even if the official is an advocate. It should be noted that in addition to the making of a complaint to the labour officer, the employee can bring a case against the employer in the Industrial Court. The employee also may have a right under a collective agreement, if there is any. The burden of proving the unfair termination or wrongful dismissal from employment shall rest on the employee and the burden of justifying the grounds shall rest on the employer.

Note: those employees under a probationary contract do not have the right to complain under these provisions of the Act.

Question: What are the (statutory) remedies for wrongful dismissal or unfair termination of employment?

The burden of proving that an unfair termination of employment or wrongful dismissal has occurred rests on the employee. The burden of justifying the grounds for the termination of employment or wrongful dismissal shall rest on the employer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES ON COLLECTIVE BARGAINING AND AGREEMENTS AND TRADE UNIONS

Introduction

As we had discussed earlier, the labour market consists of two main players – the employer and the employee. In every market there must be some bargaining power and in this market, the trend has been that the employer has had higher bargaining power over and above the employee when it comes to terms and conditions of service.

Therefore, the importance of collective bargaining cannot be understated. Collective bargaining is the method of carrying out negotiations between an employer and employees so as to determine and agree upon the conditions of employment. Employees are usually represented in collective bargaining by trade unions or other labour organizations. The result of collective bargaining is a collective agreement.

A collective agreement is defined as – a written agreement concerning any terms and conditions of employment made between a trade union and an employer or group of employers or an organization of employers.

A trade union on the other hand is defined as – an association of employees whose principal purpose is to regulate the relations between employees and employers including any employers’ organization.

History of Trade Unions in Kenya

In most of the developed countries in the west, trade unionism started around the 18^th Century after the industrialization period. However, in Kenya, trade unionism started even before industrialization, in the early 1900’s. The Unions were mainly used as vehicles of protest against working conditions imposed by foreign employers. The trade unions developed as a result of direct confrontation between workers and employers or because of collusion between workers and politicians.

In as much as trade unionism started in the 1900’s, it took almost 50 years before the first real trade union movement became a permanent feature of industrial relations in Kenya. The main reasons being that:

 

• There was strong opposition from the white elite settlers
• The small number of wage earners did not have the technical knowledge on how to form and run trade unions
• The colonial political system was not favourable
• The labour laws were restrictive
• There was high illiteracy among the wage earners in the country

Between 1900 and 1946, some changes took place that contributed to the emergence of trade unions – the two world wars, the enlistment of soldiers from East Africa, their training in various skills such as masonry, carpentry, etc. all these had an effect on workers. Their training and exposure in other countries and their observation of how workers were treated in other countries made them want the same for their fellow workers in this country.

The first trade union law was the Trade Union Registration Ordinance of 1949. This ordinance gave the colonial power strong powers of control over the unions and workers. The colonial government wanted to discourage the development of trade unions and limit their political power, therefore in the early 1950’s the colonial government sponsored the establishment of staff association and work committees among other measures that seemed to suggest that they supported trade unionism, but actually they wanted to control their activities. The benefit to the Kenyan workers was that at least they had some limited freedom of association and the right to organize themselves. But as mentioned these staff association and work committees were weak and easy to manipulate.

In spite of the restrictive labour laws, between 1949 and 1964, 4 trade unions were formed and registered

1. East African Trade Unions Congress – 1949
2. Kenya Federation of Registered Trade Unions – 1952
3. Kenya Federation of Labour – 1955
4. Kenya Africa Workers Congress – 1964

In the 1940’s and 1950’s, there were many strikes and disturbances by workers because of the highly restrictive labour laws which locked out many workers from being members of trade unions. In 1950, many trade union leaders were arrested resulting in a big strike in Nairobi which eventually spread to the whole country. The main demands of the workers were a general increase in the minimum wage and that unions should be granted freedom of association and the right to organize.

The struggle for independence was connected also to the fight for better working conditions. Trade union officials worked closely with freedom fighting politicians. In 1952, the major political party in Kenya, KAU (Kenya African Union) was banned. But trade unions were allowed to continue functioning. Therefore the Kenya Federation of Labour (KFL) was used as a political vessel in the place of KAU.

In 1958, the Federation of Kenya Employers and the KFL entered into a recognition agreement whereby FKE agreed to recognize and bargain with unions and KFL agreed to an industrial basis of organization.

1960 – At an annual conference of KFL the union leaders agreed that the trade union movement must have a right to comment on political issues and to take action in the struggle for independence

1962 – The government, the employers and unions met and drew and Industrial Charter where the Management reaffirmed that it would recognize and bargain with the unions and the unions again agreed to adhere to the established mechanisms of operations.

In the same year, rivalry intensified within KFL. There were those who were opposed to it being affiliated with the International Confederation of Free Trade Unions (ICFTU) which was a pro – west movement. This rivalry led to the formation of the Kenyan African Workers Congress in 1964. The rivalry between the two organizations became too much and the two organizations were finally de registered in 1965. In their place the Government established s single organization COTU (Central Organization of Trade Unions). The basic functions of COTU were to assist service and coordinate the activities of its affiliates and to represent its member’s interests to government and other outside bodies. See the objectives and principles of COTU today. See the website www.cotu-kenya.org

FORMATION AND MEMBERSHIP OF TRADE UNIONS

Introduction

The general principles that underlie the formation and membership of trade unions are the same ones that are mentioned in the Employment Act and that we have already discussed, mainly, the freedom of association. Sections 4 to 11 of the Labour Relations Act, 2007 sets out these principles:

Rights of Employees

• Every employee has a right to participate in the forming of a trade union, to join a trade union and to leave a trade union.
• Once that person has become a member of a trade union, they have a right to participate in its lawful activities, to participate in the election of its officials and representatives and to stand for election and to be appointed an official or officer of the trade union and as a trade union representative. This is subject to the constitution of each trade union.
• No person shall give an advantage or promise to give an advantage to an employee or person seeking employment in exchange for the person not joining or participating in a trade union.

Rights of Employers

• Employers also have the right to participate in the formation of an employer’s organization or a federation of employers’ organization and also to join these organizations or federations, participate in their lawful activities, participated in the elections, stand for election or seek appointment as an office bearer or official.
• No person shall discriminate against an employer for exercising their rights to form and participate and join an employer’s organization.

Rights of Trade Unions, employers’ organizations or federations

• They have a right to determine their own constitution and rules
• They have a right to hold elections and to elect its officers
• Right to plan and organise their administration and lawful activities
• To participate in the formation of a federation of trade unions or federation of employers’ organizations
• Right to join a federation of trade unions or employers organizations and to participate in their lawful activities
• Right to affiliate with and participate in the activities of international organizations

If any contract was made between an employer and an employee that contradicts the rights that have been given by the Act, then the contract shall be invalid, unless the contractual provision has been permitted by the Act.

ESTABLISHMENT AND REGISTRATION OF TRADE UNIONS AND EMPLOYERS ORGANISATIONS

In order to recruit members to form a trade union or an employer’s organization, the person must first obtain a certificate from the Registrar of trade unions. That means that an application must be made and be signed by two persons who are promoting the establishment of the trade union or employers organization, it shall specify the name of the proposed trade union or employers organization and any other information that is required by law.

The Registrar shall issue a certificate within three days unless the application is defective or the name of the proposed trade union is the same as that of an already existing trade union or employers organization or even if not the same, it is sufficiently similar so as to mislead or cause confusion.

The certificate shall contain the following information:

• That the promoters may undertake lawful activities in order to establish a trade union or employers organization
• An application for the registration of the trade union or employers’ organization shall be made to the Registrar within 6 months of the issue of the certificate.

Registration of trade Union

• The trade union must apply for registration according to the Act – the application form is FORM A in the Second Schedule of the Act. Once this form is filled, it is lodged together with the prescribed fee, a certified copy of the constitution of the trade union or employers’ organization, a certified copy of the attendance register and minutes of the meeting at which the union or organization was established. The application must be signed by seven members. Note: the Registrar may call for further information in order to evaluate an application for registration and also may give the applicant an opportunity to rectify the application within a period that he specifies.

If the Registrar is satisfied that a trade union or employers organization has complied with the requirements of the Act, he shall register the trade union, employers organization or federation and shall issued a certificate of registration (see Form B in the Second Schedule), enter the name and details of the union, organization or federation in the appropriate register (see Form C in the Second Schedule). The certificate of registration is CONCLUSIVE EVIDENCE that the union, organization or federation has been duly registered unless it is proved that it was withdrawn or cancelled. If the Registrar is not satisfied that the trade union, organization or federation has complied with the requirements of the Act, he may refuse to register it and give reasons for the refusal (see Form D in the Second Schedule).

• It must have adopted a constitution that complies with the requirements of the Act
• It must have an office and a postal address within Kenya
• There should be no other trade union registered which represents the same interests as the ones that the trade union which is seeking registration has.

Registration of an employer’s organization – the requirements are the same as those of registration of a trade union

Registration of federation of trade unions or federation of employers

• It must have applied for registration according to the provisions of the Act
• It must have adopted a constitution that complies with the requirements of the Act
• It has an office and a postal address in Kenya
• The constitution specifies that its members are registered trade unions only
• It was established at a meeting attended by the representatives of at least three registered unions or employers organizations who had the mandate of their respective executive boards
• They are independent from the control either directly or indirectly of, in the case of trade unions, any employers organization or federation of employers, and in the case of employers organizations, any trade unions or federation of trade unions.

 

 

 

The Effect of Registration

• It shall be a body corporate
• It shall have perpetual succession and a common seal
• It shall have the capacity to sue and be sued in its own name and to enter into contracts
• It shall have the capacity to hold, purchase, acquire and dispose of moveable and immoveable property.

Cancellation or suspension of registration

The Registrar shall cancel or suspend the registration of a trade union, employers organization or federation if the any of them is dissolved or if the Registrar is satisfied that any of them has ceased to exist, they were registered as a result of fraud, misrepresentation or mistake, is operating against the provisions of the Act, is being used for an unlawful purpose, has failed to concoct their elections according to the requirements of the Act, is not independent. The registrar shall give the union, organization or federation at least two months notice of the intention to suspend or cancel the registration and the registrar shall consider any representations made by the trade union, employers’ organization or federation within that two month period.

If any person is not happy with the decision of the Registrar, they are free to appeal to the Industrial Court within thirty days of the decision of the Registrar.

MEMBERSHIP AND OFFICIALS OF TRADE UNIONS AND EMPLOYERS ORGANISATIONS

Membership of trade unions

The membership is subject to the constitution of each particular constitution

A minor (one who has not attained the age of eighteen) who is an employee but appears to be above 16 years, may be a member of a trade union unless the constitution of that trade union does not allow it, and they shall enjoy all the rights of a member. However the minor cannot be a member of the executive board or a trustee of that trade union.

To be an official of either a trade union or employer’s organization, one must be engaged or employed in the sector for which the union or organization is formed. No person can be an official of more than one union but may be an official of more than one employer’s organization. An official of a trade union may also be an official of a federation of trade unions to which the trade union is affiliated. No person who has been convicted of a criminal offence involving fraud or dishonesty shall be an official of a trade union or employer’s organization.

COLLECTIVE AGREEMENTS AND COLLECTIVE BARGAINING

The first step in establishing the relationship between a trade union and an employer’s organization is to have a recognition agreement. According to the Act, a recognition agreement is an agreement in writing made between a trade union and an employer, a group of employers or an employer’s organization regulating the recognition of the trade union as the representative of the interests of unionisable employees employed by the employer or by the members of an employer’s organization.

The aim of the recognition agreement is to ensure that employers are able to recgonise and negotiate with the trade unions that they have recognized.

To this end, an employer’s organization shall recognize a trade union for the purposes of collective bargaining if the trade union represents a simple majority of unionisable employees employed by the group of employers or the employers who are members of the employers’ organization within a sector. A recognition agreement shall then be made in writing between the employer/employers organization and the trade union. This will show that the employer/employers organization recognizes the trade union. If the two parties want to terminate or revoke the agreement, they must apply to the Trade Board to terminate it. One of the things that the recognition agreement provides for is the reasonable access by authorized trade union representatives or officials to pursue some lawful interests of the trade union for example, recruiting members for the trade union, holding meetings with members of the trade union and other employees after working hours, representing members in dealings with the employer. The employer has the right to impose reasonable conditions on the time and place of the carrying out of these activities and also have the right to request the officials to provide proof of their identity and credentials before being granted access.

Any dispute involving the right of a trade union to be recognized will be treated like a trade dispute and will be dealt with like all the other trade disputes using the method of conciliation (see Part VIII). We shall examine these trade dispute mechanisms later. If conciliation does not work, then the trade union may refer the matter to the Industrial Court. The employers and the trade union can agree using a collective agreement that the conciliation should be conducted by an independent and impartial conciliator or by an independent and impartial arbitrator who are both appointed by agreement by the parties.

The trade union members in a particular workplace shall be entitled to elect trade union representatives who will represent them in grievances and disciplinary hearings in the workplace and will do all other things that are specified in the recognition agreement or the constitution of the trade union.

Collective bargaining can only take place once the recognition agreement has been signed by both parties. The collective bargaining will result in a collective agreement which will set out the terms and conditions of service for all the unionisable employees covered by the agreement. During the negotiations to come up with a collective agreement, the employer is required to disclose to the trade union all the relevant information that will allow the trade union to effectively negotiate on behalf of employees. All the information that is disclosed to the trade union is confidential and no one else is supposed to know that information apart from those in the negotiations. The employer is not entitled to disclose information that is legally privileged, or any information that the court has prohibited, or that will cause substantial harm to the employer or employees, or is private personal information relating to an employee, unless the employee consents.

Once the agreement is concluded, it shall be put in writing and shall be signed by the chief executive officer of any employer or employers organization AND the general secretary of any trade union that is party to the agreement.

Once it has been concluded and signed, it shall be submitted to the Industrial Court for registration within 14 days of its conclusion. The Industrial Court may request the parties to submit any further information that is needed. The court may then register the agreement either in its original form as presented by the parties or together with any amendments or modifications that are agreed upon by the parties.

The collective agreement between the parties is binding between the parties for the period of the agreement, all unionisable employees who are employed by the employers and the employers who are part of the organization that is party to the agreement are party to the agreement. The terms of the collective agreement shall be part of the contract of employment of every employee covered by the collective agreement.

Employees in the Public Sector

The Minister may make regulations determining the terms and conditions of employment for any category of employees in the public sector. Once this happens, it means that these employees cannot engage in collective bargaining (this means that they cannot form and be part of trade unions) BUT the terms and conditions of service shall have the same effect as that of a collective agreement and shall be enforced as though they were a collective agreement.

STRIKES AND LOCK OUTS

Definitions

A strike is defined as the cessation of work by employees acting in combination, or a concerted refusal under a common understanding or employees to continue to work for the purpose of compelling their employer or an employer’s organization of which their employer is a member to accede to any demand in respect of a trade dispute.

Types of strikes

1. Wild – cat strikes – these are strikes which are illegal. All the laid down procedures are ignored and the employees withdraw their labour.
2. Lawful strikes – these are strikes which follow the laid down procedure on how to carry and when to have a strike.

A lock out on the other hand is defined as the closing of a place of employment, the suspension of work, or the refusal by an employer to continue to employ any number of employees for the purpose of compelling any employees of the employer to accept any demand in respect of a trade dispute but not for the purpose of finally terminating employment.

Lawful strikes

The Labour Relations Act, 2007 provides that a person may participate in a lawful strike or lockout if the trade dispute concerns terms and conditions of employment or the recognition of a trade union, the trade dispute has not been resolved after conciliation and seven (7) days notice of the strike or lockout has been given to the other parties and to the Minister by the authorized representative of the trade union and the employers organization.

 

A party to a dispute that has received notice of the strike or lockout may apply to the Industrial Court under a certificate of urgency if the strike or lockout is prohibited under the Act or if the party that has issued the notice has failed to participate in conciliation in good faith in order to resolve the dispute.

Prohibited strikes and lockouts – see section 78(1)

The strikes and lockouts that are not allowed are where:

• any law, or court award, or collective agreement prohibits the strike or lockout in respect of the dispute at hand
• the subject matter of the strike or lockout is regulated by a collective agreement
• the parties have agreed to refer the trade dispute to the Industrial Court or to arbitration
• if the matter concerns a dispute regarding the recognition of a trade union, the matter has been referred to the Industrial Court
• The employer and employees are engaged in an essential service – an essential service is a service which if interrupted would most likely endanger the life of a person or the health of the population or of any part of the population. Examples are contained in the Fourth Schedule. They include: water supply services, hospital services, air traffic control services, civil aviation telecommunications services, fire services of government or public institutions, ports authority and local government authorities, ferry services.
• the strike or lockout is not furthering a trade dispute
• Where the strike or lockout constitutes a sympathetic strike or lockout – this is where the strike or lockout is with the respect to a dispute where the employer or employee concerned is not a party to the dispute or is not represented by an employer’s organization or trade union that is party to the dispute.

If a person participates in a lawful (protected) strike or lockout, they will not be committing a breach of contract. An employer may not dismiss an employee or take disciplinary action against an employee who takes part in a protected strike. But an employer is not under an obligation to remunerate the employee for services that the employee did not provide during the duration of the strike or lockout. Civil proceedings may not be brought against any person for participating in a protected strike or lockout.

However, an employee who takes part in, calls for or instigates or incites others to take part in an unlawful strike shall be taken to have breached the contract of employment, is subject to disciplinary action and is not entitled to any payment or any other benefit under the Employment Act 2007 during the period the employee participates in the strike.

DISPUTE RESOLUTION

Disputes are bound to occur in every work place between employers and employees. It is the easiest thing that can take place and it is important that the proper mechanisms are in place so as to solve trade disputes in order to ensure the continued productivity of all industry players. There should be impartiality and fairness in dealing with trade disputes.

A trade dispute is defined as: a dispute or difference or an apprehended dispute or difference between employers and employees, between employers and trade unions or between an employer organization and employees or trade unions, concerning any employment matter and includes disputes regarding the dismissal, suspension or redundancy of employees, allocation of work or the recognition of a trade union.

Trade disputes can be solved using either machinery within the organization or outside the organization.

Machinery within the organization is where the aggrieved employee uses the already existing mechanisms within the organization to get a solution to his problem. He may first approach his immediate supervisor and then follow any laid out procedure that the organization has provided.

Machinery outside the organization is used when the machinery within the organization has failed to work or has not produced the desired results. This machinery involves conciliation, arbitration and reference to the Industrial court.

When there is a trade dispute it may be reported to the Minister in the prescribed manner by or on behalf of a trade union or employer or employer’s organization that is a party to the dispute or by their authorized representatives. The person reporting the trade dispute must serve the notification of a trade dispute by hand or by registered post on each party to the dispute and any other person who has a direct interest in the dispute. They must satisfy the Minister that the copy of the notice has been served on each party.

If the trade dispute concerns the dismissal or termination or employment of an employee, the dispute shall be reported to the Minister, within 90 days of the dismissal unless the Minister has extended this period for good reasons.

If the trade dispute concerns the redundancy of the employees, then the trade union may report a trade dispute to the Minister at any stage after the employer has given notice of its intention to terminate the employment on grounds of redundancy.

The party to the trade dispute who has been served with a copy of the report that has been referred to the Minister is entitled to make a replying affidavit within 14 days of receiving the copy of the referral. Other interested parties who also have been served with the referral, may file a statement with the Minister within 14 days of receiving the referral.

Once the Minister has received a copy of the report of the trade dispute, he shall, within 21 days of receiving the report, appoint a conciliator who shall attempt to resolve the dispute. The conciliator shall not be appointed if, the conciliation procedures in the collective agreement have not been exhausted or the law or the collective agreement between the parties prohibits negotiation on the dispute in question.

The conciliator or the conciliation committee shall attempt to resolve the dispute within 30 days of their appointment or any extended period agreed to by the parties to the trade dispute.

During the conciliation sessions, the conciliator/committee may mediate between the parties, conduct fact finding activities and make recommendations or proposals to the parties for settling the dispute. The conciliator shall also have the power to summon witnesses to the conciliation session.

Once the conciliation has been concluded, the terms of the agreement shall be put in writing and the parties and the conciliator shall sign.

If the trade dispute is not resolved under the conciliation mechanism, then any party to the dispute may refer the trade dispute to the Industrial Court. The Industrial Court is established by section 4 of the Industrial Court Act 2011. The Industrial Court was established for the purpose of settling employment and industrial relations disputes and the furtherance, securing and maintaining good labour relations and employment conditions in Kenya.

The dispute may only be referred to the Industrial Court by the authorized representative of an employer’s organization or a trade union.

 

SOCIAL SECURITY LAW IN KENYA

Introduction

The concept of social security

This is a social insurance programme that provides social protection or protection against social conditions such as poverty, old age, disability, unemployment. Social security may refer to social insurance, income maintenance or social protection. Social insurance is a government – sponsored programme which is created and established by law, and which serves a defined population. The program is funded through premiums or taxes paid by or on behalf of participants.  Income maintenance is a policy which is usually applied using various programmes. It is designed at providing the population with income at times when they are unable to care for themselves. Social protection refers to a set of benefits available from the state or the market or civil society or through a combination of these agencies, to the individual in order to reduce multi- dimensional deprivation.

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