Banking, Insurance & Finance Union (Kenya) V Telepost Co-Operative Savings & Credit Society Limited [2012] KEELRC 66 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Golden handshake on retrenchment/voluntary early retirement
The claim for increase to Kshs 500,000/- was declined; the figure of Kshs 110,000/- under the expired CBA was retained
Neither party addressed the court on the purpose of a golden handshake, whether it is paid on top of severance pay or service gratuity, or whether it is the same as severance pay. BIFU annexed only select parts of the expired CBA. Without such foundational evidence the court could not pluck a figure from the extremes advocated by the parties, unlike wage claims which can be assessed against the wage guidelines criteria.
Salary and wage increase
A wage increase of 25% spread over two years, i.e. 12.5% per year, was awarded for the period under review
The CPMU report confirmed a 30% change in the Consumer Price Index and improved net surplus, but also declining membership. The court performed a delicate balancing act, weighing the respondent's financial state and the economy against the need to cushion employees against the rise in cost of living, and awarded less than the 30% claimed but more than the respondent's nil offer, guided by the report's recommendation of 15% per year.
Pension scheme contributions
The respondent's proposal of 12.5% employer and 7.5% employee contribution was adopted
The court found the respondent's proposal reasonable. Having awarded a wage increase, the amounts contributed by both employees and the employer in real terms toward the scheme would also rise. The respondent also pointed out that BIFU had demanded only 15% during negotiations, not the 22.5% pleaded.
Commuter allowance
The commuter allowance was set at Kshs 2,000/- per month for the period under review
The CPMU data relied on related to the period ending 30 June 2008, while the determination was made in 2012, nearly four years later. The court took into account changes which must have occurred in the intervening period and the respondent's financial status as reflected in the report, and set the allowance between the parties' positions.
Legal principles established
#- In determining a wage increase where parties have failed to agree, the court must balance the employer's financial state and the economy against the need to cushion employees against rises in the cost of living
- The court will not impose a figure drawn from the parties' extreme positions where the parties have not adduced evidence on the basis for the claim
Court orders
#- 1.The Claim to increase the golden handshake from Kshs 110,000/- to Kshs 500,000/- is declined
- 2.The transport allowance for retrenched employees or employees taking voluntary early retirement is allowed and set at Kshs 45,000/-
- 3.The Claim to increase the outpatient medical cover to Kshs 60,000/- is declined
- 4.The increase in salaries and wages is allowed and set at 25% spread over 2 years at 12.5% per year for the period under review
- 5.Contributions to the pension scheme/provident fund are set at 12.5% (employer) and 7.5% (employee) of gross pay
- 6.The commuter allowance is allowed and set at Kshs 2,000/- per month for the period under review
- 7.No order as to costs
- Jurisdiction invoked
- Trade dispute referred under Section 69(a) of the Labour Relations Act following failed conciliation before the Minister for Labour
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Banking, Insurance & Finance Union (Kenya) V Telepost Co-Operative Savings & Credit Society Limited [2012] KEELRC 66 (KLR)", Case Analysis (2012). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/66/eng@2012-10-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.