Kenya Plantation & Agricultural Workers Union v Kenya Tea Growers Association [KTGA] (Cause 1997 of 2014) (Employment and Labour) [2016] KEELRC 559 (KLR)
The bottom line
#Kenya's Employment Court awarded tea plantation workers a 15% pay rise, confirming employers claiming they can't afford increases must prove it with financial records.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction of the ELRC over wage disputes and imposition of CBA terms
The Court has jurisdiction under Article 162(2)(a), section 12 of the ELRC Act and sections 62-73 of the Labour Relations Act to arbitrate unresolved CBA items including wages; KTGA's jurisdictional challenge lacked merit
The right to collective bargaining is entrenched in Article 41(5) of the Constitution. Parties followed the conciliation route under sections 62-73 of the Labour Relations Act and received a Certificate of Disagreement, giving the Court original jurisdiction. A CBA is not an ordinary commercial contract; where parties fail to agree, the Court must arbitrate guided by fair labour practice and the Wage Guidelines.
Rate of pay for the 2014/2015 CBA
An award of 15%:15% across the board was appropriate given the CPI and wage determination factors
The Court applied the Wage Guidelines, computing the correct CPI for outside Nairobi as 8.89. KTGA's experts failed to produce audited financial statements to demonstrate inability to pay despite the duty resting on the employer. Statutory benefits cannot be offset against wages. The Union's 25%:25% demand was tempered by the applicable CPI and KTGA's 2%:2% offer was unsustainable.
Burden of demonstrating inability to pay
The employer bears the duty to submit financial statements to establish inability to pay or non-sustainability
In CBA negotiations an employer alleging inability to afford wage increases must demonstrate trends from current financial statements for the past 3-5 years, showing wage bill, number of employees and profit margins. The KTGA experts shielded the employer by relying on comparatives and unit costs without producing income, expense or balance sheet data, leaving the Court unable to verify claims of loss.
Retirement age
Retirement at 60 years with option for voluntary retirement at 55 years
Relying on the approach in David Mwangi Gioko, the Court held that rigid employer positions on retirement age are not best practice; the public sector norm of 60 years may be adopted while allowing voluntary retirement at 55 to serve both parties.
Day of worship
Day of worship is a constitutional right under Article 32 and must be secured as a right in the CBA
Article 32 of the Constitution governs the day of worship while section 27 of the Employment Act governs rest days; they are distinct. A blanket employer policy that does not accommodate individual circumstances and exceptions is unreasonable where constitutional rights are engaged; the Constitution prevails over conflicting workplace policy.
Gratuity versus NSSF Act contributions
Gratuity remains a negotiable CBA item and may coexist with NSSF contributions; the rate remains at 22 days
The NSSF Act is statutory and non-negotiable but does not forbid parties from agreeing on gratuity. The 6% deduction under the NSSF Act, 2013 had not come into force. The two provide distinct benefits and may run concurrently, so KTGA's duplication argument failed.
Legal principles established
#- A CBA or contract of service under the Labour Relations Act or Employment Act cannot be equated to an ordinary commercial contract for sale of goods; disputes from collective agreements must go to the ELRC
- The ELRC has jurisdiction to arbitrate unresolved CBA negotiation items, including wage increases, guided by affordability, comparability, ability to pay and cost of living
- An employer alleging inability to pay bears the duty to submit financial records to prove it
- Where an employer's workplace policy conflicts with the Constitution, the Constitution must prevail
- Statutory benefits under the Employment Act (housing, water, food, medical attention) cannot be applied to justify non-negotiation of a CBA or to renegotiate terms downwards
Court orders
#- 1.The CBA for the period 2014/2015 shall be reviewed with rate of pay (basic wage/salary) awarded at 15%:15% for the 2014/2015 CBA across the board
- 2.Retirement shall be at 60 years with the option to voluntarily retire at 55 years
- 3.On hours of work there shall be 1 rest day with pay in every working week
- 4.Annual leave travelling allowance awarded at 6%
- 5.Medical treatment and sick allowance awarded at Kshs.30,000.00
- 6.Baggage allowance awarded at Kshs.30,000.00 upon termination of employment
- 7.Parties shall review the CBA 2014/2015 and any antecedent policy to accommodate the Union member's right to observe their day of worship within reasonable limitations
- 8.Annual leave shall remain as under the CBA 2012/2013
- 9.Gratuity shall remain as under the CBA 2012/2013
- Jurisdiction invoked
- Article 162(2)(a) of the Constitution; section 12 of the Employment and Labour Relations Court Act; sections 57, 60 to 73 of the Labour Relations 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.
Cite this brief
#Cite this brief
Caselaw, "Kenya Plantation & Agricultural Workers Union v Kenya Tea Growers Association [KTGA] (Cause 1997 of 2014) (Employment and Labour) [2016] KEELRC 559 (KLR)", Case Analysis (2016). Cause No. 1997 of 2014, consolidated with Cause No. 15 of 2015 (Kericho). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/559/eng@2016-06-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.