Kenya Shoe & Leather Workers Union V Macquin Shoe Limited [2013] KEELRC 514 (KLR)
The bottom line
#Kenya's Industrial Court refused a wage increase because the employer was nearly broke, but raised the housing allowance slightly.
What this practically means
#Executive summary
#Key legal issues
#General wage increase
Wage increase declined; wages to remain at current rates
The Union proposed 17% over two years citing inflation of 16-17%. The Central Planning and Monitoring Unit report showed cost of living rose about 18% between 2009 and 2011 but no improved productivity, and the Respondent had incurred net losses, including Kshs 2,324,722/- in 2011, and was tottering on the verge of shutting shop. Balancing the interests of both sides, the Court declined the increase.
House allowance
Increased from Kshs 2,400/- to Kshs 3,000/- per month, backdated to 1 May 2011
Section 31 of the Employment Act obliges the employer to provide reasonable housing or pay a sum enabling the employee to obtain it. A survey showed one-bedroomed houses cost about Kshs 3,000/- per month. The Court balanced the employees' right to reasonable housing against the employer's financial survival, noting the general wage claim had been declined, and set the allowance at Kshs 3,000/- per month.
Medical treatment
Extension of cover to spouses and four children under 18 declined
The Respondent already covered employees' medical expenses and the employees were NHIF contributors whose dependents enjoyed certain benefits under the Fund. The Union gave no evidence of the implications of extending cover, so the Court did not accept the invitation to extend the medical cover.
Termination of employment (service pay)
Maintained at 16 days pay per completed year of service
The Union sought an increase from 16 to 30 days per year of service but laid no valid foundation for the increase and produced no data or comparable industry information. The Respondent relied on the adequacy of 17 days against sections 35 and 36 of the Employment Act. The claim failed for want of evidential foundation.
Redundancy
Redundancy pay maintained at 17 days for each year of service
The Union invoked section 40 of the Employment Act seeking an increase to 30 days per year, but the parties placed no information before the Court on market or economic trends on redundancy benefits. The Court found maintaining 17 days per year fair in the circumstances, observing that redundancy declaration is a painful experience for employees.
Retirement benefits
Maintained at 21 days for each year of service; baggage allowance not determined
The Union sought an increase from 21 to 30 days per year of service plus a baggage allowance of Kshs 20,000/-. The parties did not address the factors used to peg the number of days. Considering the Respondent's financial position as captured in the report and audited accounts, the Court maintained the current level and declined to determine the baggage allowance as an afterthought.
Legal principles established
#- Under section 31 of the Employment Act, the primary responsibility for employee housing lies on the employer, who must either provide reasonable housing at its own expense or pay a sum enabling the employee to obtain reasonable housing
- In wage disputes the Court must balance the employer's financial ability (Wage Guideline No. 7) against the employees' right to a decent living wage, considering cost of living and labour productivity
- Parties should lay sufficient material before the Court to enable it make a fair determination on collective bargaining items
Court orders
#- 1.The Claim for general wage increase is declined and wages remain at current rates
- 2.Housing allowance increased from Kshs 2,400/- to Kshs 3,000/- per month, backdated to 1 May 2011
- 3.The Claim for extension of medical benefits to spouses and 4 dependent children under 18 years is declined and the current benefit maintained
- 4.Service pay on termination maintained at 16 days pay for each completed year of service
- 5.Redundancy pay maintained at 17 days pay for each completed year of service
- 6.Retirement benefits maintained at 21 days for each completed year of service
- 7.No order as to costs
- Jurisdiction invoked
- Original jurisdiction to interpret and determine collective bargaining disputes; report ordered by the Court under its powers (Industrial Court), with reference to Wage Guideline No. 7 and the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kenya Plantation and Agricultural Workers’ Union v Kakuzi Limited [2017] KEELRC 825[2017] KEELRC 825 (KLR)21 Apr 2017
Cite this brief
#Cite this brief
Caselaw, "Kenya Shoe & Leather Workers Union V Macquin Shoe Limited [2013] KEELRC 514 (KLR)", Case Analysis (2013). Cause No 119 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/514/eng@2013-02-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.