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ELRCDismissedCause No 203 of 2014· [2015] KEELRC 1577 (KLR)

Kenya Union of Commercial Food & Allied Workers v Tusker Mattresses Ltd [2015] KEELRC 1577 (KLR)

Employment and Labour Relations Court
17 April 2015
1,105 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that an employer applied a CBA wage increase correctly by calculating it on existing wages, not stacking it on the statutory minimum wage.

What this practically means

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Executive summary

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The Claimant union, party to a Recognition Agreement of 19th October 2013 and a first CBA effective 1st March 2013 (registered as RCA No. 273 of 2013), alleged that the Respondent employer wrongfully implemented Clause 1(B) of the CBA. The CBA provided a 10% wage increase for the first year and a further 11% for the second year for confirmed unionisable employees. Clause 1(A) further guaranteed a basic minimum wage always Ksh.180.00 above the Gazetted Minimum Wage. During negotiations the Government announced a 14% General Wage Increase effective 1st May 2013 under the Regulation of Wages (General) (Amendment) Order, 2013. The Claimant contended the 10% increase should be loaded onto the CBA-agreed basic minimum wages, an approach adopted by a Conciliator whose recommendations the Claimant accepted but the Respondent rejected. The Respondent maintained it correctly applied the 10% to wages as at 28th February 2013 and later adjusted wages to the statutory minimum from 1st May 2013. The court agreed with the Respondent, holding that because the CBA's effective date preceded that of the General Wages Order, the statutory increase could not be applied retroactively, and employees below the new statutory minimum were duly adjusted subsequently. The claim was dismissed with costs to the Respondent.

Key legal issues

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01

Interaction between CBA wage increase (effective 1st March 2013) and statutory General Wages Order 2013 (effective 1st May 2013)

Holding

The CBA increase was properly computed on wages as at 28th February 2013; employees below the statutory minimum were subsequently adjusted upward when the Order took effect on 1st May 2013

Reasoning

The court held that since the effective date of the CBA preceded the effective date of the General Wages Order 2013, the employer could not retroactively apply the statutory increase to the CBA computation. Employees whose wages fell below the new statutory minimum were entitled to adjustment from 1st May 2013, which the Respondent duly effected, making its implementation proper and lawful.

p. 3
02

Correctness of the Conciliator's recommendations

Holding

The Conciliator's interpretation, adopted by the Claimant, was erroneous and contrary to the CBA and the General Wages Order 2013

Reasoning

The court found that both the Claimant and the Conciliator misread the CBA by requiring the 10% increase to be loaded onto the CBA-agreed basic minimum wages rather than on wages obtaining as at 28th February 2013. The court agreed instead with the Respondent's implementation, which followed the contractual and statutory scheme in sequence.

p. 3

Legal principles established

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  • A CBA increase effective from an earlier date need not take into account a statutory minimum wages order that only became effective later

Court orders

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  1. 1.The suit by the Claimant is dismissed
  2. 2.Costs of the suit awarded to the Respondent

Authorities

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Legislation

  • Regulation of Wages (General) (Amendment) Order, 2013General Wage Order effective 1st May 2013 (Legal Notice No. 197)
  • Regulation of Wages (General) (Amendment) Order, 2012Legal Notice No. 71 of 1st May 2012
Jurisdiction invoked
Jurisdiction over a registered Collective Bargaining Agreement dispute (RCA No. 273 of 2013), the court being the registering court

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 Commercial Food & Allied Workers v Tusker Mattresses Ltd [2015] KEELRC 1577 (KLR)", Case Analysis (2015). Cause No 203 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1577/eng@2015-04-17

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