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ELRCPartially AllowedCause No 1985 of 2015· [2016] KEELRC 1475 (KLR)

Kenya Hotels and Allied Workers Union v Nairobi Gymkhana Sports Club [2016] KEELRC 1475 (KLR)

Employment and Labour Relations Court
1 April 2016
LNLINNET NDOLO
482 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court split the difference on wages and benefits for Nairobi Gymkhana workers, rejecting bonus demands that the union failed to justify.

What this practically means

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Executive summary

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This is an award of the Employment and Labour Relations Court at Nairobi in an economic dispute referred to the court after conciliation failed between the Kenya Hotels and Allied Workers Union (claimant) and Nairobi Gymkhana Sports Club (respondent). The dispute concerned seven outstanding items for a new collective bargaining agreement: leave traveling allowance, bonus, staff food, funeral assistance, general wage increment, house allowance and service charge. The union demanded higher figures on each item; the employer offered lower or no offers, including a purely discretionary bonus. The court stated that in economic disputes it must consider the macroeconomic environment as well as the specific employer's productivity and profitability. It noted the upward trend in CPI and inflation rates (2013-2015) from Kenya National Bureau of Statistics and the respondent's fairly healthy financial position, though surpluses were said to be applied to capital development. Balancing employee needs against the employer's sustainability and growth, the court awarded: leave traveling allowance of Kshs.6,000 (the employer's offer); wholesome employer-provided food for employees working between 11.00 am and 11.00 pm; funeral assistance of Kshs.100,000 (the union's full demand); general wage increments of 12.5% and 15%; house allowance of Kshs.7,000 and Kshs.7,500 (compromise figures); and service charge to be effected per industry practice. No award was made on bonus for lack of a basis. The parties were directed to conclude the CBA within 30 days, with each party bearing its own costs.

Key legal issues

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01

Approach to awarding terms in an unresolved economic dispute referred to the ELRC

Holding

The Court balances employee needs against the employer's sustainability and growth, guided by macroeconomic indicators (CPI and inflation data) and the employer's financial statements, and arrives at a compromise award.

Reasoning

The court noted that both overall CPI and inflation rates (2013-2015) published by the Kenya National Bureau of Statistics had been on an upward trend, and that the respondent's financial statements reflected a fairly healthy position, though surpluses were applied to capital development. Balancing these considerations, it made a split award between the parties' positions on each item.

p. 2
02

Bonus

Holding

No award made on bonus for want of a basis for a general provision.

Reasoning

The union demanded a bonus of Kshs.6,000 while the employer offered only a discretionary bonus. The court found no justification laid before it for a general, non-discretionary bonus provision and declined to make any award on the item.

p. 2

Legal principles established

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  • In determining economic disputes, the Court considers the macroeconomic environment in which the parties operate as well as the specific employer's productivity and profitability levels
  • A party seeking an award on a particular item must lay a basis for it; in default, no award is made

Court orders

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  1. 1.Leave traveling allowance awarded at Kshs.6,000
  2. 2.The employer to provide wholesome food to employees working between 11.00 am and 11.00 pm
  3. 3.Funeral assistance awarded at Kshs.100,000
  4. 4.General wage increment of 12.5% in the first year and 15% in the second year
  5. 5.House allowance of Kshs.7,000 in the first year and Kshs.7,500 in the second year
  6. 6.Service charge to be effected in accordance with industry practice
  7. 7.No award made on bonus
  8. 8.Parties directed to conclude the pending collective bargaining agreement within 30 days of the award
  9. 9.Each party to bear their own costs

Authorities

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Legislation

  • Kenya National Bureau of Statistics publicationsConsumer Price Indices (CPI) and inflation rates (2013-2015)
Jurisdiction invoked
Reference of an unresolved economic dispute to the Employment and Labour Relations Court for determination after conciliation failed

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 Hotels and Allied Workers Union v Nairobi Gymkhana Sports Club [2016] KEELRC 1475 (KLR)", Case Analysis (2016). Cause No 1985 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1475/eng@2016-04-01

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