Is Collective Bargaining Dead in the Public Sector?

Article 2 of the International Labour Organisation (ILO) Convention No. 154 defines collective bargaining as:

 “all negotiation which take place between an employer, a group of employers or one or more employers’ organizations, on the one hand, and one or more workers’ organisations on the other, for:

a) determining working conditions and terms of employment; and/or

b) regulating relations between employers and workers; and/or

c) regulating relations between employers or their organisations and a workers’ organisation or workers’ organisations.”

Simply put, collective bargaining is the joint determination by employees and employers of the problems of the employment relationship.  Article 41 of the Constitution entrenches the right to fair labour practices including that “every trade union, employer’s organization and employer has a right to collective bargaining”. Collective bargaining is therefore a constitutionally guaranteed right which ought to be enjoyed by all Kenyan workers.

Historically, collective bargaining has played a key role in the improvement of the terms of service of employees as it is through the leveraging of their collective strength in numbers that employees are able to effectively negotiate with an otherwise more powerful employer.

Collective bargaining assumes that two parties i.e. employer and employee, will engage in negotiations and eventually agree on a collective bargaining agreement which would be contractually binding between the two parties. It goes without saying, then that no third party should be involved in the collective bargaining process otherwise it would cease to be collective bargaining as envisaged by the law.

The public sector commands a fair share of the labour market in Kenya. According to the Kenya National Bureau of Statistics, approximately 30% of Kenya’s total labour force works in the public sector. Out of this, the only persons expressly excluded from the enjoyment of the rights guaranteed under Article 41 are individuals serving in the Kenya Defence Forces and the National Police Service. The rest of public sector workers are entitled to full enjoyment of the rights under Article 41, including the right to collective bargaining.

Enter the controversy created by the Salaries and Remuneration Commission (SRC);the SRC is established under Article 230 of the Constitution as one of the independent commissions with powers under Article 230 (4) to:-

1. set and regularly review the remuneration and benefits of all State officers; and
2. advise the national and county governments on the remuneration and benefits of all other public officers.

That the SRC is not the employer of public officers is plain, and thus it should have no direct role in collective bargaining. Yet the most important and often controversial item on the negotiating table is that of salary; the proverbial “elephant in the room”. However the role of setting, reviewing and advising on the remuneration of state and public officers is bestowed upon the SRC pursuant to Article 234 (4), and thus the question that arises is what is left of collective bargaining if the most important item is off the table?

In Teachers Service Commission (TSC) v Kenya National Union of Teachers & Others (2015) eKLR the Employment and Labour Relations Court (ELRC), as the court of first instance, found that the SRC had no role to play in collective bargaining between the  teachers’ unions and the employer – TSC and further found that SRC’s advice to TSC on the teachers’ remuneration could not possibly be binding (i.e. leaving room for negotiation of salaries between employer and unions and upholding the ideal of collective bargaining). The Court pronounced itself thus:-

 “Looking at the provisions of Article 230 of the Constitution as well as the provisions of Section 11 of the SRC Act, it is clear that SRC has the mandate of setting and regularly reviewing the remuneration and benefits of all State officers and advising the National and County Government on the remuneration and benefits of all other public officers.

 The Court therefore reiterates that the TSC has the mandate to set and review the remuneration of teachers upon advice by SRC.  The Court further restates that TSC is not bound by the advice of SRC in setting and reviewing remuneration of teachers. A plain and holistic interpretation of Articles 230(4) as read with Article 259(11) of the Constitution supports this finding by the Court.  TSC needs only prepare a budget for allocation of funds by the National Treasury and approval by the National Assembly.  However TSC must take into consideration the advice by SRC without necessarily being bound by it. Acting otherwise would be contrary to the Constitutional order…”

However, on appeal, the Court of Appeal disagreed with the decision of the Employment and Labour Relations Court, and held as follows:-

“I hereby come to the conclusion and finding that the advice given by SRC is binding. The advice is binding because to hold otherwise would render the functions of SRC under Article 230 (5) idle; it would render SRC ineffective and irrelevant; it will introduce a discretionary concept of pick and choose in Kenya’s governance structure. An interpretation that renders a constitutional Article idle and an Independent Commission ineffective does not pass the threshold of constitutionality. SRC is a constitutional organ and the trial judge erred in interpreting the Constitution in a manner that renders SRC’s singular and exclusive mandate in Article 230 (5) (a) idle and ineffective. The trial court misapprehended the doctrine of separation of functions which is keystone in Kenya’s governance structure. In holding that SRC has a non-binding advisory role in the determination remuneration and benefits of public officers, the trial court disregarded the central and exclusive juridical competence of SRC in the determination of fiscal sustainability of the total public compensation bill as per Article 230 (5) (a) of the Constitution.

 The advice given by SRC is binding because the advice is not merely an opinion that is given by a friend, it is advice that has a constitutional underpinning; it is binding because it emanates from a constitutional organ with exclusive constitutional mandate to determine fiscal sustainability of the total public compensation bill; it is binding because the principle of effectiveness require that all provisions of the constitution must be given effect. SRC advice is not an advice in personam, it is an advice in rem as it limits and determines remuneration rights and entitlements of public officers. Being an advice in rem, SRC advice binds all persons, state organs and independent commissions. 

Regrettably, the Court of Appeal did not reconcile the competing and/or conflicting provisions of the Constitution in a manner that advances the right to collective bargaining. The effect of the Court of Appeal’s decision was to give SRC carte blanche to dictate the salaries and remuneration of all workers in the public sector, effectively destroying the right of the said workers to collective bargaining with the employer. There can be no collective bargaining when one side’s position is entrenched or cast in stone.