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ELRCPartially AllowedCause 1323 of 2011· [2013] KEELRC 461 (KLR)

KENYA UNION OF COMMECIAL, FOOD AND ALLIED WORKERS v TRU FOODS LIMITED [2013] KEELRC 461 (KLR)

Industrial Court of Kenya
21 March 2013
JRJames Rika
238 words in judgment
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The bottom line

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A Kenyan employment court upheld an employer's Kshs.40,000 redundancy ex-gratia offer, rejecting a union's demand for Kshs.800,000 as unreasonable.

What this practically means

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Executive summary

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This was a redundancy dispute referred to the Industrial Court of Kenya by the Kenya Union of Commercial, Food and Allied Workers against Tru Foods Limited. Following conciliation, the parties agreed on all issues except the quantum of ex-gratia payment to be made to employees exiting employment through redundancy. The employer offered Kshs.40,000 per employee, while the Union demanded Kshs.800,000 per employee. Rika J noted that the ex-gratia payment was over and above other redundancy payments already proposed pursuant to the parties' Collective Bargaining Agreement. The Court considered three factors in rejecting the Union's demand: the demand of Kshs.800,000 per employee was not reasonable; the employer had left open the possibility of re-engaging the employees on new contracts as and when opportunities arose; and there had been an earlier agreement in respect of some of the affected employees for payment of Kshs.40,000 ex-gratia. The Court held that the offer of Kshs.40,000 was fair and adequate in the circumstances and upheld it. The dispute was marked as settled on those terms and the file was closed. The judgment was dated and delivered at Nairobi on 21st March 2013. Mr. Nyumba appeared for the Claimant and Mr. H. Okeche, instructed by the Federation of Kenya Employers, appeared for the Respondent.

Key legal issues

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01

Quantum of ex-gratia payment to employees exiting employment through redundancy

Holding

The employer's offer of Kshs.40,000 per employee, over and above other redundancy payments under the CBA, was upheld as fair and adequate; the Union's demand of Kshs.800,000 was rejected as unreasonable

Reasoning

The ex-gratia payment was over and above redundancy payments already agreed under the parties' CBA. The employer had left open the possibility of re-engaging the employees on new contracts as opportunities arose. An earlier agreement existed for payment of Kshs.40,000 ex-gratia in respect of some of the affected employees. In those circumstances the Union's demand of Kshs.800,000 per employee was not reasonable, and the employer's offer was fair and adequate.

p. 2

Legal principles established

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  • Where parties have conciliated and agreed on all issues except one, the Court may determine the residual issue on the fairness of the offer, taking into account prior agreements between the parties and the possibility of re-engagement

Court orders

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  1. 1.The Court upholds the offer of Kshs.40,000 in ex gratia made by the employer to the employees, over and above the other redundancy payments pursuant to the parties' CBA
  2. 2.The dispute is marked as settled and the file closed upon these terms
Jurisdiction invoked
Jurisdiction over the referred dispute (issue in dispute: redundancy); no specific constitutional or statutory provision cited in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "KENYA UNION OF COMMECIAL, FOOD AND ALLIED WORKERS v TRU FOODS LIMITED [2013] KEELRC 461 (KLR)", Case Analysis (2013). Cause 1323 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/461/eng@2013-03-21

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