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ELRCPartially AllowedCause No 2209 of 2015· [2018] KEELRC 924 (KLR)

Daniel Thuo Kabi & 8 others v General Motors East Africa Limited [2018] KEELRC 924 (KLR)

Employment and Labour Relations Court
12 October 2018
OMONESMUS N. MAKAU
1,505 words in judgment
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The bottom line

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The Employment Court struck out employees' retirement claims because a union-negotiated agreement binding them set retirement at 55, not 60.

What this practically means

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Executive summary

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The Respondent moved by Notice of Motion dated 22 December 2017 to strike out the Claimants' Memorandum of Claim dated 11 December 2015, contending that the suit disclosed no reasonable cause of action, that the issue of retirement age had been determined by a court of concurrent jurisdiction as 55 years under the 2013 Collective Bargaining Agreement, and that continued prosecution would embarrass the court and amount to an abuse of process. The Claimants opposed, arguing they were not privy to the CBA, that their contracts of service signed about 30 years earlier were governed by the Retirement Benefits Scheme Handbook fixing retirement at 60 years, that the 2013 CBA could not apply retrospectively, and that the issue was still pending trial in ELRC Cause No. 1174 of 2015. Makau J framed four issues, chiefly whether the suit disclosed a reasonable cause of action. The court found it undisputed that a 2013 CBA existed between the union and the respondent fixing retirement at 55 years and that the Claimants were union members. Holding that union members are deemed to have surrendered the right to negotiate directly with their employer and that the registered CBA becomes their contract of service until another is concluded, the court held the Claimants' privity and retrospectivity contentions fallacious and the suit devoid of any reasonable cause of action, following Amalgamated Union of Kenya Metal Workers v General Motors East Africa Ltd. The motion was allowed with each party bearing their own costs of the suit.

Key legal issues

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01

Whether the suit disclosed a reasonable cause of action given the 2013 Collective Bargaining Agreement

Holding

It did not; the CBA binding on the union members set the retirement age at 55 years, so the claim that the Claimants were prematurely retired disclosed nothing to try.

Reasoning

The court found as undisputed that a 2013 CBA existed between the union and the employer, that the Claimants were union members, and that the CBA fixed retirement at 55 years instead of the earlier handbook's 60. Union members are deemed to have surrendered direct negotiation rights, so the CBA is their contract of service. Any pension-amount grievance has an alternative remedy under the Retirement Benefits Act.

p. 3
02

Whether the 2013 CBA could bind employees whose contracts predated it

Holding

Yes; the court rejected the privity and retrospectivity arguments as fallacious, following Abuodha J. in Amalgamated Union of Kenya Metal Workers v General Motors East Africa Ltd.

Reasoning

The court agreed with the defence that the Claimants were bound by terms negotiated by their trade union under the 2013 CBA. Following the cited precedent, the current CBA sets the operating terms, including retirement age, until a new one is signed. The court did not find it necessary to decide the remaining issues once the reasonable cause of action issue was resolved against the Claimants.

p. 3

Legal principles established

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  • Employees who are members of a trade union are bound by a Collective Bargaining Agreement negotiated by that union and cannot disown it on the ground that they were not privy to it.
  • A registered Collective Bargaining Agreement becomes the employees' contract of service until another one is negotiated and concluded.

Court orders

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  1. 1.The respondent's Notice of Motion dated 22.12.2017 seeking striking out of the Claimant's Memorandum of Claim dated 11.12.2015 is allowed.
  2. 2.Each party shall bear his or her own costs of the suit.

Authorities

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Legislation

  • Labour Relations ActSection 9
  • Retirement Benefits Actnot specified

Cases cited (1)

  • Amalgamated Union of Kenya Metal Workers –vs- General Motors East Africa Ltd. [2016] eKLR
    [2016] eKLR
Jurisdiction invoked
Article 162(2)(a) jurisdiction of the Employment and Labour Relations Court (implied from the dispute concerning employment and retirement age; not expressly cited in the extract)

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, "Daniel Thuo Kabi & 8 others v General Motors East Africa Limited [2018] KEELRC 924 (KLR)", Case Analysis (2018). Cause No 2209 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/924/eng@2018-10-12

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