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ELRCPartially AllowedNot stated in the excerpt· [2013] KEELRC 761 (KLR)

Kenya Union of Commercial, Food and Allied Workers v Kamacharia Farmers Cooperative Society Limited [2013] KEELRC 761 (KLR)

Industrial Court of Kenya
18 September 2013
JAJ. N. Abuodha
1,755 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court ruled that expired collective bargaining agreements with month-to-month clauses keep binding employers until a new agreement is signed.

What this practically means

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Executive summary

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The claimant union referred a dispute to the Industrial Court at Nyeri after a conciliator appointed by the Minister for Labour under section 63 of the Labour Relations Act failed to broker agreement with the respondent, a coffee society, on review of the 2008-2010 CBA. The dispute concerned three items: medical allowance, safari and subsistence allowance, and percentage salary increment. The respondent conceded most averments but pleaded inability to pay, citing low coffee prices, redundancy of 27 employees in 2002 and arrears of benefits still being cleared. On the safari and subsistence allowance, both parties agreed to retain the 2006-2008 CBA position. On the medical allowance, the claimant sought an increase from Kshs.400 to Kshs.1,000 while the respondent offered Kshs.600. On the increment, the respondent urged adoption of the statutory minimum wage as the basic entry point, which the claimant resisted. The court held that under section 15(5) of the Industrial Court Act it is bound by national wage guidelines, but these are only a bare minimum and cannot override superior terms in a valid CBA. Since the 2006-2008 CBA provided for month-to-month continuation, its terms persist until a new CBA is concluded. Relying on the CPMU report recommending a 20.2% increment per year, and considering the respondent's financial position, the court awarded a 20% annual increment for the 2008-2010 period, spread over four years, left the medical allowance as per the 2006-2008 CBA subject to future review, and directed the parties to negotiate a new CBA forthwith.

Key legal issues

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01

Effect of an expired CBA with a month-to-month continuation clause

Holding

The CBA continues to bind the parties until a new one is concluded

Reasoning

The 2006-2008 CBA expressly provided it would remain in force from month to month until a new one was concluded. Because the parties entered it voluntarily, the court found its terms continue to apply, and declined to release the respondent from its obligations or substitute the statutory wage guidelines.

p. 3
02

Application of national wage guidelines to wage awards

Holding

Section 15(5) of the Industrial Court Act binds the court to wage guidelines, but they are a floor; superior CBA terms cannot be watered down

Reasoning

Under section 15(5) of the Industrial Court Act the court is bound by national wage guidelines, including Guideline No. 2(b) on productivity and Guideline No. 7 on ability to pay. However, these form the bare minimum, and where a valid CBA provides superior terms, the court cannot reduce them by strict application of the statute.

p. 2
03

Quantum of salary increment for 2008-2010

Holding

An annual increment of 20% per year awarded, spread over four years, based on the CPMU cost of living index analysis

Reasoning

The CPMU report, applying the cost of living index per the wage guidelines, recommended 20.2% increments for each year of the 2008-2010 period. The respondent's offer was critically low and suggested financial dire straits, while the claimant's demand was slightly below the CPMU recommendation. The court awarded 20% per year, spread over four years given the respondent's financial position.

p. 3

Legal principles established

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  • Where a valid CBA was voluntarily entered into and provides for continuation from month to month, its terms continue to apply until a new CBA is concluded, and the court will not release a party from its obligations and substitute the wage guidelines
  • The national wage guidelines under section 15(5) of the Industrial Court Act form only the bare minimum below which the court cannot go where there is a valid CBA with more superior terms

Court orders

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  1. 1.Respondent's unionisable employees to have an annual increment of 20% per year for the period between 1st October 2008 to 30th September 2010
  2. 2.The increment to be spread over four years and payable alongside the ruling wage payable to the respondent's employees
  3. 3.Medical allowance to remain as per the 2006-2008 CBA subject to review upwards during negotiations for the current CBA
  4. 4.The claimant and the respondent to embark forthwith on negotiations for a new CBA covering the current period

Authorities

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Legislation

  • Labour Relations Actsection 63
  • Industrial Court Actsection 15(5)
  • Wage Guidelines issued by the Minister for Finance on 23rd November, 2005Guideline No. 2(b); Guideline No. 7
Jurisdiction invoked
Reference of a labour dispute to the Industrial Court by a conciliator under section 63 of the Labour Relations Act

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 and Allied Workers v Kamacharia Farmers Cooperative Society Limited [2013] KEELRC 761 (KLR)", Case Analysis (2013). Not stated in the excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/761/eng@2013-09-18

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