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ELRCPartially AllowedCause No. 68 of 2018 (Formerly Cause No. 1997 of 2016 (Nairobi))· [2019] KEELRC 1734 (KLR)

Kenya Plantation & Agricultural Workers Union v Kerio Valley Development Authority & another [2019] KEELRC 1734 (KLR)

Employment and Labour Relations Court of Kenya at Nakuru
14 March 2019
4,246 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Employment Court confirmed a union CBA binds a state corporation, but wage increases for public workers must go through the Salaries and Remuneration Commission first.

What this practically means

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Executive summary

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The Kenya Plantation & Agricultural Workers Union claimed against Kerio Valley Development Authority, a state corporation, for a 25% general wage increase for 2014 and a further 25% for 2015, housing or a Ksh.15,000 monthly house allowance, and leave travelling allowance of Ksh.10,000, being the three unresolved items in the 2014/2015 CBA negotiations. A consent of 7th June 2018 had regulated a voluntary early retirement of 314 employees and required the SRC to file a report to form the basis of a new CBA for employees who declined the retirement. The SRC's report instead challenged the validity of the parties' 2012 CBA, contending it was executed after the SRC guidelines of 4th July 2012 without the Commission's advice. The court held that the 2012/2013 CBA was valid and enforceable, the parties being bound by its terms under Article 41(5) of the Constitution and section 59 of the Labour Relations Act, and that the respondent's failure to follow the SRC guidelines could not be visited upon the claimant. Signing a CBA and later renouncing it was an unfair labour practice. However, as a state corporation the respondent fell under the SRC's mandate under Article 230, so the 2014/2015 CBA had to be submitted to the SRC for analysis, verification and advice within sixty days, guided by the 2012/2013 CBAs and the December 2017 salary structure. Housing or a 15% of basic wage allowance (whichever is higher than the prevailing Ksh.5,000) was ordered; the Ksh.4,000 leave travelling allowance was found reasonable; each party was to bear its own costs.

Key legal issues

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01

Validity and enforceability of the 2012/2013 CBA

Holding

The 2012/2013 CBA is valid and enforceable; the parties are bound by its agreed terms under Article 41(5) of the Constitution read with section 59 of the Labour Relations Act, 2007, and cannot go behind what was agreed

Reasoning

The court held that although the SRC guidelines postdate the CBA, the CBA took effect for 2012-2013, a period outside the circular of 4th July 2012, and was not the subject of the suit. The right to collective bargaining is constitutionally secured and cannot be negated by subsidiary legislation. The employer's failure to follow the guidelines in executing the CBA cannot be used against the claimant union.

p. 5
02

Role of the SRC in the unresolved 2014/2015 CBA terms

Holding

As a state corporation the respondent is subject to SRC advice; the 2014/2015 CBA must be submitted to the SRC for analysis, verification and advice within 60 days, with the completed job evaluation and the 6th December 2017 salary structure applying to unionisable employees

Reasoning

Article 230(4)(b) empowers the SRC to advise on remuneration of all public officers, and the respondent falls under that mandate. The SRC, having been invited by consent to file a report forming the basis of a new CBA, exceeded its mandate by challenging the 2012 CBA rather than addressing the three items in dispute. The court referred the dispute to the SRC under section 20(4) of the ELRC Act for targeted advice.

p. 6
03

Housing or house allowance

Holding

Section 31 of the Employment Act, 2007 obliges the employer to provide housing or an appropriate allowance; the Wage Orders' 15% of basic wage applies where housing is not provided, whichever is higher than the prevailing Ksh.5,000 provision

Reasoning

The court found the statutory right under section 31 of the Employment Act entitles employees to housing or an allowance in lieu. The applicable Wage Orders provide for a 15% allowance based on the basic wage. In computing the due allowance the respondent must take the higher of the 15% of basic wage and the prevailing Ksh.5,000 provision.

p. 6
04

Leave travelling allowance

Holding

The existing Ksh.4,000 leave travelling allowance was found reasonable and remains in force until future negotiations

Reasoning

While the right to leave with full pay is secured under section 28 of the Employment Act, 2007, the parties had already made provision for Ksh.4,000 travelling allowance per employee. The court found this reasonable and declined the claimant's demand for Ksh.10,000, leaving the figure open to future CBA negotiations.

p. 6
05

Unfair labour practice and accountability for public funds

Holding

Signing a CBA aware of applicable guidelines and later renouncing it is an unfair labour practice contrary to Article 41; officers who waste public funds are personally accountable under Article 226(5)

Reasoning

The court invoked Article 226(5) of the Constitution to underline that an accounting officer who directs or approves use of public funds contrary to law is personally liable. Negotiating and executing a CBA in the knowledge of the SRC guidelines and then denouncing the commitments constituted an unfair labour practice outlawed by Article 41, for which the court can redress at the instance of the injured party.

p. 5

Legal principles established

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  • The constitutional right to collective bargaining cannot be negated by subsidiary legislation
  • A state corporation that negotiates and signs a CBA aware of applicable SRC guidelines, then renounces its commitments, engages in unfair labour practice
  • Failure by the employer to abide by SRC guidelines cannot be visited upon the trade union
  • A constitutional officer called upon to assist the court must honour the call and not take a partisan position
  • An accounting officer who directs or approves use of public funds contrary to law is personally liable to make good the loss

Court orders

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  1. 1.Declaration that there is a valid Recognition Agreement between the parties and previous CBAs, the last covering 2012/2013, which shall guide future negotiations
  2. 2.The respondent shall submit the CBA for the period 2014 and 2015 (and the current period) to the SRC for analysis, verification and advice on the payable general wage within sixty (60) days
  3. 3.A mention date shall be secured for court confirmation once the SRC process is positively addressed
  4. 4.If the respondent fails to comply, the claimant may move the court under Rules 36 and 37 of the Employment and Labour Relations Court (Procedure) Rules, 2016
  5. 5.Housing shall remain as provided or an allowance paid at prevailing rates or 15% of the basic wage, whichever is higher
  6. 6.Parties are at liberty to negotiate the leave travelling allowance in future CBA negotiations
  7. 7.Each party to bear own costs
Jurisdiction invoked
Article 41(5) and Article 230 of the Constitution, 2010; section 20(4) of the Employment and Labour Relations Court Act, 2011

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 Plantation & Agricultural Workers Union v Kerio Valley Development Authority & another [2019] KEELRC 1734 (KLR)", Case Analysis (2019). Cause No. 68 of 2018 (Formerly Cause No. 1997 of 2016 (Nairobi)). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1734/eng@2019-03-14

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