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ELRCPartially AllowedCause No. 10 of 2001· [2003] KEELRC 9 (KLR)

KENYA UNION OF COMMERCIAL, FOOD & ALLIED WORKERS v AVERY KENYA LTD [2003] KEELRC 9 (KLR)

Industrial Court of Kenya
26 March 2003
2,609 words in judgment
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The bottom line

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What this practically means

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Executive summary

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This Industrial Court award (Cause No. 10 of 2001) determined a collective bargaining dispute between the Kenya Union of Commercial, Food & Allied Workers and Avery Kenya Ltd, a weighing equipment and ink jet coding company. Four issues in dispute remained after conciliation settled the other two: general wage increase, house allowance, mechanic's expenditure, and out of pocket expenses. The Union demanded a 20% wage increase per year (40% over two years); the Company offered 5% per year, citing declining profits, static turnover and increased competition. Guided by the Economic Planning Division's analysis of consumer price indices and the principle that ability to pay is the primary objective in wage disputes, the Court awarded 6.5% per year (13% for two years), slightly above the Company's offer. On house allowance, the Court invoked Section 9 of the Employment Act and its own precedents on the scarcity of affordable urban accommodation, and raised the Company's 2.5% offer to 5% per year (10% over two years). Mechanic's expenditure was awarded at a 10% overall increase with revised daily rates, and the Court recommended harmonising the mechanical and electronic technicians' allowances. The new demand for out of pocket expenses was rejected as duplicative. The Court withheld retrospective application of the award, except on the general wage increase, citing potential financial disruption to the Company.

Key legal issues

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01

General wage increase

Holding

Awarded 6.5% per year, or 13% for the two years, slightly above the Company's 5% offer but well below the Union's 20% demand, guided by ability to pay and consumer price indices

Reasoning

The EPD established entitlement based on consumer price indices of 7.37% per year (full compensation) or 5.53% per year (three-quarters of the cost-of-living rise). Balancing the Union's 20% demand against the Company's 5% offer, its moderate business performance and falling profits, the Court hiked the offer by 1.5% per year.

p. 3
02

House allowance

Holding

Company's offer of 2.5% per year held too low; house allowance raised to 5% per year, or 10% for the two years

Reasoning

The Court noted the historical entitlement of 20% of basic wages, the scarcity and cost of reasonable accommodation in urban areas, and Section 9 of the Employment Act obliging employers to provide reasonable housing or sufficient rent. Guided by the Wage Guidelines and the legal position, it improved the Company's offer by a further 2.5% per year.

p. 4
03

Mechanic's expenditure

Holding

Company's overall offer of 6.7% increased to 10%, with revised daily rates for breakfast, lunch, dinner and accommodation; harmonisation of the two technicians' expenditure recommended

Reasoning

Considering the parties' submissions and the EPD figures showing mechanics' expenditure of Kshs.794,804 in 1997 and Kshs.1.0 million in 1999 and electronic technicians' expenditure of Kshs.1.2 million and Kshs.1.7 million respectively, the Court hiked the Company's offer to an overall 10% and set new daily rates, while recommending harmonisation of the two categories.

p. 4
04

Out of pocket expenses

Holding

New demand rejected

Reasoning

The Court found the demand duplicative of the mechanics' expenditure allowance, particularly in light of its recommendation that expenditure for mechanical and electronic technicians be harmonised, and therefore rejected it.

p. 5

Legal principles established

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  • The primary objective in deciding industrial disputes on wage increase is the ability of the company to pay and the restoration of peace and harmony in the industry
  • Employees should not demand more than the business can afford
  • Retrospective application of awards may be refused where financially disruptive to the employer

Court orders

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  1. 1.General wage increase of 6.5% each year, or 13% for the two years' period (improving the Company's offer of 5% per year by 1.5%)
  2. 2.House allowance increased to 5% each year, or 10% for the two years' period (improving the Company's offer of 2.5% per year by a further 2.5%)
  3. 3.Mechanic's expenditure awarded at an overall increase of 10%: Breakfast Shs.68.75, Lunch Shs.79.75, Dinner Kshs.115.50, Accommodation Kshs.275.00
  4. 4.Recommendation that the expenditure for mechanical and electronic technicians be harmonised to eliminate disparity
  5. 5.Out of pocket expenses demand rejected
  6. 6.Award, except on general wage increase, not to apply retrospectively

Authorities

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Legislation

  • Trade Disputes Act, Cap. 234, Laws of KenyaSections 4, 6(2)(a), 14(7) and 14(9)(e)
  • Employment Act, Cap. 226, Laws of KenyaSection 9
  • Wage GuidelinesGuidelines (ii) and (iv)

Cases cited (3)

  • Kenya Union of Commercial, Food & Allied Workers v. Queensways Properties Ltd.
    Cause No. 96 of 2000
  • Tailors & Textiles Workers’ Union v. Garment Manufacturers Mass Production Group
    Cause No. 38 of 1997
  • Kenya Shoe & Leather Workers’ Union v. Leather Industries of Kenya Ltd.
    Cause No. 96 of 1998
Jurisdiction invoked
Trade Disputes Act, Cap. 234, Section 14(7) and (9)(e) - Notification of Dispute with statutory certificate of the Labour Commissioner

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "KENYA UNION OF COMMERCIAL, FOOD & ALLIED WORKERS v AVERY KENYA LTD [2003] KEELRC 9 (KLR)", Case Analysis (2003). Cause No. 10 of 2001. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2003/9/eng@2003-03-26

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.