Kenya Chemical and Allied Workers Union v Leather Life EPZ Limited [2014] KEELRC 622 (KLR)
The bottom line
#Kenya's Industrial Court awarded workers 18% and 21% wage rises, confirming employers can never pay below the statutory minimum wage.
What this practically means
#Executive summary
#Key legal issues
#Determination of a fair wage increment in an economic dispute
The Court awarded 18% in the first year and 21% in the second year, below the Claimant's 25% demand but above the Respondent's 16% total offer, after adjusting wages to the statutory minimum wage floor
The Court applied the major compensable factors: rise in the cost of living, measured by the CPI for the Nairobi Lower Income Group at 16.4% over the two years, and improved labour productivity, evidenced by the Respondent's healthy net profits over 2009-2011. It balanced these against the Respondent's business challenges to avoid forcing the cost of labour above the market benchmark and risking collapse of the business and job losses.
Statutory minimum wage as an inviolable wage floor
Parties cannot contract below the wage floor, and any wages paid below the prevailing Wage Orders must be made up
Under Section 48 of the Labour Institutions Act, minimum rates in Wages Orders are statutory terms of employment that cannot be varied by agreement. The Respondent's suggestion that minimal disparity with the minimum wage was acceptable was rejected; the Court held there should be no disparity at all, and ordered payment of the difference for workers paid below the statutory floor during the CBA period.
Legal principles established
#- Minimum wages established under Wages Orders constitute terms of employment that may not be varied by agreement and cannot be contracted below
- Where a contract provides less favourable terms than a Wages Regulation Order, the statutory terms are substituted into the contract
- Wage Orders fix the wage floor; collective bargaining aims at fixing the cost of labour above that benchmark, guided by compensable factors and economic indicators
Court orders
#- 1.The Respondent shall in the first instance, pay the Claimant's Members who may have received wages below the minimum wage, any difference in wages, between what was actually paid to the Workers and what was prescribed in the prevailing Wage Orders for the period 1st April 2011 to 31st March 2013
- 2.Having adjusted the wages to meet the requirement of the statutory minimum wage, the Respondent shall pay the Claimant's Members wage increment based on adjusted figures in [a], at the rate of 18% in the first year, and 21% in the second year, effective from 1st April 2011 to 31st March 2013
- Jurisdiction invoked
- Labour Relations Act and Labour Institutions Act - trade dispute referred under Section 69 of the Labour Relations Act after failed conciliation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Chemical and Allied Workers Union v Leather Life EPZ Limited [2014] KEELRC 622 (KLR)", Case Analysis (2014). Cause Number 816 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/622/eng@2014-02-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.