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ELRCPartially AllowedCause No. 206 of 2016· [2018] KEELRC 2079 (KLR)

Kenya Union of Sugar Plantation and Allied Workers v Kibos Sugar and Allied Industries Limited [2018] KEELRC 2079 (KLR)

Employment and Labour Relations Court
3 May 2018
MOMaureen OnyangoMNMathews Nderi Nduma
1,563 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The claimant union and the respondent employer had a valid Recognition Agreement and were negotiating their first collective bargaining agreement when they reached a deadlock on the grading structure and basic minimum rates of pay. Prayers (a) and (c) of the statement of claim were dispensed with through interlocutory agreement, leaving only prayer (b) and costs for determination. The CBA negotiated by the parties was registered by the court on 4th April 2017 but without a grading structure annexed. Each party filed its own proposal: both proposed 11 grades (UG11 lowest to UG1 highest), differing in the clustering of jobs and minimum wages attached. The claimant, whose proposal was filed on 2nd March 2017, contended that its structure reflected the actual positions and pay slips of employees and objected that the respondent's structure lowered salaries without union input. The respondent, whose proposal was filed on 14th March 2017, contended it conformed to clause 39(1) of the CBA, which reserves the company's right to use the Government General Wages Order, covered all cadres and departments including Agriculture, Paper Mill and Distillery, and reflected the difficult operating climate in the sugar industry. The court found the respondent's structure better structured and aligned with the Regulation of Wages (General) Order, while the union's proposal was fragmented, mixing attendants, operators and general workers. The court ordered adoption of the respondent's structure with three modifications concerning watchmen, the effective dates of wage rates consistent with clause 39, and the application of minimum rates to new and lower-paid employees only. Prayers (a), (b) and (c) were marked settled and each party bears its own costs.

Key legal issues

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01

Whether the claimant's or the respondent's grading structure should be annexed to the registered CBA

Holding

The court adopted the respondent's grading structure with three modifications, finding it better structured and conforming to the Regulation of Wages (General) Order

Reasoning

The court compared both proposals. The respondent's structure mirrored the Government General Wages Order benchmark reserved under clause 39(1) of the CBA and made provision for all cadres and departments, including the Agricultural Department, Paper Mill and Distillery. The union's proposal was fragmented, mixing attendants, operators, drivers and general workers in single grades (UG10, UG9, UG7 and UG6) and omitting some departments, which would leave those employees outside the CBA.

p. 2
02

The effective dates of the minimum wage rates attached to the grades

Holding

The court aligned the wage rates with clause 39 of the CBA: 2015 rates retained for that year, 2016 rates effective 1st August 2016, and 2017 rates effective 1st August 2017, with fresh negotiations for the year beginning 1st August 2018

Reasoning

The court sought consistency with clause 39 of the CBA which reserved the right to use the Government General Wages Order in determining the wage structure. It applied the registered CBA's wage progression columns and directed the parties to negotiate new wages for the year beginning 1st August 2018, preserving the negotiated framework rather than imposing new rates.

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03

Application of the minimum rates to existing employees

Holding

The minimum rates apply only to new employees and employees currently earning below the minimum; employees earning above the minimum retain their wages but are entitled to wage increases under clause 39(c) of the CBA

Reasoning

The court avoided reducing any employee's existing salary, consistent with the principle that salaries cannot be reduced without negotiation. Only those below the minimum rates are lifted to the minimum, while those above retain their wages and receive negotiated increments under clause 39(c).

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Legal principles established

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  • An employee's salary cannot be reduced in the absence of negotiations between the employer and the employees or as may be agreed between the employer and the union
  • In determining wages, a court must balance reasonable wages for employees against the sustainability of the enterprise and sector

Court orders

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  1. 1.The parties to adopt the grading structure proposed by the respondent with modifications
  2. 2.The position of Night Watchman to be slotted under UG9 while the position of Day Watchman be in UG10
  3. 3.The rates in column 3 (wages for 1st August 2015) to be retained for that year; the 4th column to be rates effective 1st August 2016; the 5th column effective from 1st August 2017, consistent with clause 39 of the CBA; the parties thereafter to negotiate new wages for the year beginning 1st August 2018
  4. 4.The basic minimum rates of pay to be applicable to new employees and employees whose wages are currently below the minimum rates as at the date of the award; employees whose wages are above the minimum rates to retain their wages but be entitled to a wage increase in accordance with clause 39 (c) of the CBA
  5. 5.For the record, prayers (a), (b) and (c) in the statement of claim marked as settled
  6. 6.Each party to bear its costs

Authorities

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Legislation

  • Regulation of Wages (General) OrderGeneral Wages Order structure
Jurisdiction invoked
Article 162(2) of the Constitution as read with the Employment and Labour Relations Court Act (court's jurisdiction over employment and labour relations disputes and registration of CBAs under the Labour Relations Act)

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 Sugar Plantation and Allied Workers v Kibos Sugar and Allied Industries Limited [2018] KEELRC 2079 (KLR)", Case Analysis (2018). Cause No. 206 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2079/eng@2018-05-03

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