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ELRCPartially AllowedNot stated· [2019] KEELRC 2448 (KLR)

Kenya Chemical and Allied Workers Union v Spectre International Limited [2019] KEELRC 2448 (KLR)

Employment and Labour Relations Court
24 January 2019
MNMathews N. Nduma
737 words in judgment
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The bottom line

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Kenya's Employment and Labour Relations Court awarded workers an 8% yearly wage rise for two years, balancing union demands against the company's demonstrated financial distress.

What this practically means

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Executive summary

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This first-instance judgment of the Employment and Labour Relations Court by Mathews N. Nduma, Judge, delivered on 24th January 2019, determines a dispute over the conclusion of a Collective Bargaining Agreement succeeding the one that ran from 1st December 2011 to 30th November 2013. The union claimed a general wage increment of 18% per year for two years (36% total) and sought that subsequent CBAs cover periods up to 30th November 2019. It gave three months' notice to negotiate, and after the Respondent failed to respond, reported the dispute to the Ministry of Labour in December 2015. A conciliator, Mr. L. K. Bii, was appointed; parties failed to agree, and the conciliator recommended 5% per year for two years, which the workers rejected. The Respondent opposed the claim, citing the factory's closure from October 2016 due to shortage of molasses, withdrawal of overseas support, salary arrears of ten months amounting to Kshs.16 million, statutory arrears exceeding Kshs.90 million, and unremitted employee loan deductions. It supported a 10% increment for both years effective from signing, arguing it lacked capacity to pay arrears. The CPMU economic report of July 2018 confirmed the factory was not operational, with declining contracted worker numbers. Weighing the conciliator's recommendation, the CPMU report and the parties' submissions, the court entered judgment for the Claimant, awarding a general wage increment of 8% for the first year and 8% for the second year (16% total), with the CBA effective January 2017 to December 2018.

Key legal issues

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01

Quantum of general wage increment payable under the successor CBA

Holding

An increment of 8% per year for two years (16% total) awarded, below the union's demand of 18% per year but above the conciliator's recommended 5%

Reasoning

The court weighed the conciliator's recommendation of 5% per year, the CPMU report showing the factory closed since October 2016, salary arrears of 10 months amounting to Kshs.16 million and statutory arrears exceeding Kshs.90 million, against the union's claim of 18% per year and the Respondent's offer of 10%. Balancing the company's financial constraints with workers' need for compensation against inflation, it settled on 8% per year for two years effective January 2017 to December 2018.

p. 2

Legal principles established

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  • In wage disputes, the court may rely on the conciliator's recommendations and the CPMU economic report together with the parties' submissions to fix a wage increment within the company's capacity to pay

Court orders

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  1. 1.Judgment entered in favour of the Claimant against the Respondent
  2. 2.General wage increment awarded at 8% for the first year and 8% for the second year, totalling 16%
  3. 3.The effective date of the Collective Bargaining Agreement fixed as January 2017 to December 2018
Jurisdiction invoked
Employment and labour relations dispute referred after conciliation under the Ministry of Labour

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 Chemical and Allied Workers Union v Spectre International Limited [2019] KEELRC 2448 (KLR)", Case Analysis (2019). Not stated. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2448/eng@2019-01-24

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