Collective Bargaining Agreement (Kenya)

A Collective Bargaining Agreement in Kenya governs the relationship between the parties by fixing what each must do.

The Labour Relations Act No. 14 of 2007 is the primary statute governing collective bargaining in Kenya. Section 59 of the Act defines a CBA as a written agreement concerning the terms of employment or any other matter of mutual interest concluded between one or more registered trade unions and one or more employers or registered employers' organisations. Section 62 imposes a duty on every employer and every registered trade union to bargain collectively in good faith, disclose relevant information, and attempt to reach agreement. A failure to bargain in good faith constitutes an unfair labour practice under Section 5 of the Labour Relations Act.

For a CBA to be legally effective in Kenya, it must be registered with the Employment and Labour Relations Court (ELRC), established under Article 162(2)(a) of the Constitution of Kenya 2010 and the Employment and Labour Relations Court Act No. 20 of 2011. Section 63 of the Labour Relations Act requires parties to submit the CBA to the ELRC within 14 days of conclusion for registration. A registered CBA becomes binding on the employer, the trade union, and all employees covered by the bargaining unit from the date of registration, and may also bind new employees hired after registration. An unregistered CBA has effect as an ordinary contract between the parties but does not bind third parties.

The Employment Act No. 11 of 2007 sets the minimum floor of rights — including minimum wages, leave entitlements, and termination protections — below which a CBA cannot descend. A CBA may provide more generous terms than the Employment Act minimum but cannot reduce statutory entitlements. The Regulation of Wages and Conditions of Employment Act (Cap. 229) and sector-specific wage orders issued by the Cabinet Secretary for Labour also establish minimum terms in certain industries — the CBA must at minimum comply with the applicable wage order for the relevant sector.

The Central Organisation of Trade Unions (COTU-K) is the umbrella body representing most registered trade unions in Kenya, while the Federation of Kenya Employers (FKE) represents employers in collective bargaining. Both bodies provide support to their members in negotiating, drafting, and registering CBAs. The ELRC has jurisdiction to interpret, enforce, and vary registered CBAs. Where a CBA expires and new terms are being negotiated, the existing CBA continues to apply until a new agreement is registered, preventing a vacuum in workers' protections during negotiations.

Sector-specific CBAs exist in Kenya's major industries — banking (under the Banking Insurance Finance and Allied Workers Union, BIFAWU), manufacturing, tea, coffee, hospitality, and healthcare. Each sector CBA reflects the specific working conditions, occupational hazards, and wage levels of that industry, as documented by the Kenya National Bureau of Statistics (KNBS) and the Ministry of Labour and Social Protection.

A Kenya Collective Bargaining Agreement is required whenever an employer negotiates terms of employment with a recognised trade union and needs to record the agreed terms in a binding, ELRC-registered instrument.

A CBA is required when a registered trade union — recognised under Section 54 of the Labour Relations Act No. 14 of 2007 — presents an employer with a formal notice of its intention to bargain collectively. Under Section 62 of the Labour Relations Act, the employer must respond within 30 days and is legally obliged to bargain in good faith. Failure to respond or to engage in good-faith bargaining constitutes an unfair labour practice, exposing the employer to ELRC sanctions.

A CBA is needed when an employer in the manufacturing, hospitality, healthcare, banking, or agricultural sector employs a workforce that is predominantly unionised, and wishes to establish clear, documented terms of employment that apply uniformly to all covered employees and reduce the risk of individual disputes before the ELRC.

A CBA is required when an existing CBA has expired and new terms need to be negotiated. Under Section 67 of the Labour Relations Act No. 14 of 2007, a CBA continues to apply for 12 months after its expiry date or until a new CBA is registered, whichever is earlier. Beginning renegotiation before the expiry date and documenting the new agreed terms protects both employer and employees during the transition.

A CBA is needed in the tea, coffee, or sugar agri-business sector, where workers are employed under sector-specific wage orders issued by the Cabinet Secretary for Labour under the Regulation of Wages and Conditions of Employment Act (Cap. 229). The CBA supplements these wage orders by addressing matters not covered by the gazette notice, such as housing, medical cover, education bursaries for employees' children, and productivity bonuses.

A CBA is required when an employer is subject to inspection by the Directorate of Occupational Safety and Health Services (DOSHS) under the Occupational Safety and Health Act No. 15 of 2007 (OSHA), and the union has raised health and safety concerns. A CBA health and safety clause establishes the employer's commitments and the union's monitoring role, reducing the risk of DOSHS enforcement action.

A CBA is needed when an employer wishes to introduce new shift patterns, productivity targets, or performance-linked pay that would otherwise require individual negotiation with each affected employee. A CBA binds all employees in the bargaining unit collectively, streamlining the implementation of operational changes while maintaining industrial peace.

A Kenya Collective Bargaining Agreement under the Labour Relations Act No. 14 of 2007 must contain the following essential provisions to be valid, registrable with the Employment and Labour Relations Court (ELRC), and enforceable against all covered employees.

Parties and Bargaining Unit: Full legal names of the employer (including BRS Registration Number and KRA PIN) and the registered trade union (including its registration number under the Labour Relations Act No. 14 of 2007). A precise definition of the bargaining unit — the category or categories of employees covered by the CBA (e.g., all unionisable employees at the employer's Nairobi facility, excluding managerial and supervisory staff). The Federation of Kenya Employers (FKE) and the Central Organisation of Trade Unions (COTU-K) recommend precise bargaining unit definitions to prevent scope disputes.

Duration and Renewal: The commencement and expiry dates of the CBA. Under Section 67 of the Labour Relations Act, a CBA remains in force for 12 months after expiry if no new CBA is registered. Most Kenyan CBAs are for 2 to 3 years, with a salary review clause permitting annual wage adjustment based on the Kenya National Bureau of Statistics (KNBS) Consumer Price Index (CPI).

Wages and Allowances: Basic monthly wages by job grade, house allowance, transport allowance, medical allowance, and any other regular allowances. All wages must meet or exceed the applicable minimum wage under the Regulation of Wages (General) Order, currently approximately KES 15,201.65 per month (2025 rate). Annual increment mechanisms and the procedure for mid-term salary reviews must be specified.

Statutory Deductions: PAYE under the Income Tax Act (Cap. 470), NSSF contributions under the National Social Security Fund Act No. 45 of 2013, SHIF contributions at 2.75% of gross salary under the Social Health Insurance Act No. 16 of 2024, and Housing Levy at 1.5% of gross salary under the Affordable Housing Act — all administered by the Kenya Revenue Authority (KRA).

Leave Entitlements: Annual leave of not less than 21 working days under Section 28 of the Employment Act No. 11 of 2007; sick leave; maternity leave (3 months, Section 29); paternity leave (14 days, Section 29A); and any CBA-specific additional leave entitlements exceeding the statutory minimum.

Grievance and Disciplinary Procedures: A step-by-step grievance procedure beginning at the shop-floor level and escalating to senior management, then to a joint employer-union committee, and finally to the ELRC if unresolved. The disciplinary procedure must comply with Sections 41 to 45 of the Employment Act — show-cause letter, hearing, employee representation by a union official, and written decision with right of appeal.

Health and Safety: The employer's obligations under the Occupational Safety and Health Act No. 15 of 2007 (OSHA), the Work Injury Benefits Act No. 13 of 2007 (WIBA), and the establishment of a joint health and safety committee under Section 13 of OSHA where the employer has 20 or more employees.

Union Rights and Recognition: The employer's recognition of the trade union as the exclusive bargaining agent for the defined bargaining unit; check-off arrangements for union subscriptions deducted from payroll and remitted to the union; and the union's right to access the workplace for legitimate trade union activities. The forms-legal.com Collective Bargaining Agreement template covers all elements required for ELRC registration under Section 63 of the Labour Relations Act No. 14 of 2007.

Additional compliance elements for a Collective Bargaining Agreement (Kenya) used in Kenya include: Under the Employment Act No. 11 of 2007, the Employment and Labour Relations Court (ELRC) adjudicates workplace disputes in Kenya. Section 35 of the Employment Act 2007 governs termination of employment. The National Social Security Fund Act No. 45 of 2013 mandates employer contributions to NSSF. The Social Health Insurance Fund (SHIF) replaced NHIF in 2024. The Kenya Revenue Authority (KRA) administers PAYE under the Income Tax Act (Cap. 470). Forms-legal.com provides this template as a starting point for Kenya-compliant documentation.