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ELRCAllowedNot stated in the judgment· [2020] KEELRC 176 (KLR)

Musyoka & 7 others v CMC Motors Group Ltd (Cause 1953 of 2016) [2020] KEELRC 176 (KLR)

Employment and Labour Relations Court
27 November 2020
OMONESMUS N MAKAU
2,422 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 ruled an employer must hand over the CBA governing severance pay for retrenched managers who claim unequal redundancy payouts.

What this practically means

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Executive summary

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This is a ruling on a Notice of Motion dated 17 March 2020 filed by claimants who were management staff laid off in a redundancy on or around 20 January 2016. They allege discrimination in severance computation: they were paid 15 days' pay per year of service under section 40(1)(g) of the Employment Act while unionisable staff were paid 21 days per year under a Collective Bargaining Agreement, contrary to section 40(1)(d) and Clause 7 of the respondent's HR Manual. By the motion they sought an order compelling the respondent to produce the CBA in force at the time of retrenchment before judgment. The respondent opposed, denying the CBA applied to management staff, asserting the claimants accepted terminal dues in full and final settlement, and dismissing the application as a fishing expedition. After considering pleadings, affidavits and submissions, the court examined Clause 7(f) of the respondent's HR Policy & Procedures Manual, 2014, which provides that severance pay for non-unionisable staff is based on the same number of days as payable to unionisable employees. The court held that the CBA provisions formed part of the claimants' contracts of service and would be enforceable in determining their severance pay, and that under sections 74 and 10(7) of the Employment Act the employer bears the legal burden to produce employment records. Invoking Rule 25(7) of the ELRC Procedure Rules, 2016 and section 22 of the Civil Procedure Act, the court found merit in the application and ordered the respondent to file the CBA in force at the time of retrenchment within 14 days, serve a copy on the claimants, and meet the costs of the application.

Key legal issues

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Whether the court should compel the respondent to produce the CBA applicable at the time of the claimants' retrenchment

Holding

Application allowed; the CBA is relevant and the respondent is its custodian.

Reasoning

The court noted Clause 7(f) of the respondent's HR Manual providing that severance pay for non-unionisable staff is based on the same number of days as payable to unionisable employees, meaning CBA provisions formed part of the claimants' contracts. Since the employer is custodian of employment records under sections 74 and 10(7) of the Employment Act, and discovery is available under section 22 of the Civil Procedure Act, the claimants made out a good case for the order sought.

p. 3

Legal principles established

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  • Where an employer's HR policy incorporates CBA severance terms for non-unionisable staff, the CBA stipulations form part of their contract of service and are enforceable in computing severance pay.
  • The employer is the custodian of employment records and bears the legal burden to produce them in court.

Court orders

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  1. 1.The Respondent to produce, by filing in court within 14 days, the Collective Bargaining Agreement in force between it and its unionisable employees as at the time the claimants were retrenched/declared redundant
  2. 2.The Respondent to serve the claimants with a copy of the CBA immediately after filing in court to pave the way for trial of the main suit on a priority basis
  3. 3.The Respondent shall meet the costs of the Application

Authorities

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Legislation

  • Employment ActSection 40(1)
  • Employment ActSection 40(1)(d)
  • Employment ActSection 40(1)(g)
  • Employment ActSection 74
  • Employment ActSection 10(7)
  • Civil Procedure ActSection 22
  • Civil Procedure ActSections 1A and 1B
  • Constitution of KenyaArticle 159
  • ELRC Procedure RulesRule 25(7)
  • ELRC Procedure RulesRule 28(3)

Cases cited (4)

  • Oracle Productions Ltd vs Decapture Limited & 3 others
    [2014] eKLR
  • Charles Kambo Wamai -vs- Bamburi Cement Ltd
    [2013] eKLR
  • Fredrick Ngari Muchira, Howard Kipkoech Korir & 98 Others -vs- Pyrethrum Board of Kenya
    [2013] eKLR
  • Coastal Bottlers Ltd -vs- Kimathi Mithika
    [2018] eKLR
Jurisdiction invoked
Section 22 of the Civil Procedure Act and Rule 25(7) of the ELRC Procedure Rules, 2016

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, "Musyoka & 7 others v CMC Motors Group Ltd (Cause 1953 of 2016) [2020] KEELRC 176 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/176/eng@2020-11-27

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