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ELRCDismissedCause number not stated in the judgment (referred to only as 'this Cause')· [2020] KEELRC 559 (KLR)

Amalgamated Union of Kenya Metal Workers v Associated Motors Limited [2020] KEELRC 559 (KLR)

Employment and Labour Relations Court of Kenya
7 August 2020
RSRadido Stephen
912 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~4 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to excuse a company from agreed wage increases, telling it to negotiate with the union instead of returning to court.

What this practically means

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Executive summary

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By a judgment delivered on 24 April 2020, the Court (Radido J) directed the Union and Associated Motors Ltd to execute a collective agreement incorporating an 11% wage increment spread over two years, a 5.5% house allowance increase, and a leave travelling allowance of Kshs 6,150/-. On 15 June 2020 the Respondent filed a Motion seeking review and setting aside of that judgment on the grounds of new and important matters: the COVID-19 pandemic had depressed vehicle sales and labour costs, its financial performance had been poor since 2016, and job losses were likely. It also relied on a tripartite Memorandum of Understanding between the Ministry of Labour and Social Protection, COTU and FKE aimed at preserving jobs and cushioning businesses. The Union filed a Replying Memorandum, asserting the collective agreement related to 2016/2017-2017/2018 and that other motor industry companies had agreed wage increments for the period. The Court held that the Respondent's financial position was not new evidence, since its own affidavit deposed that the downturn began in 2016 and it had made no counter-offers during negotiations. On COVID-19, the Court accepted its impact could not have been foreseen at the hearing but held that judicial intervention should not replace social dialogue, which the Respondent had never attempted; collective agreement terms, once incorporated into individual contracts, require consultation under section 10(5) of the Employment Act. The Court declined to review the judgment, dismissed the motion, and made no order on costs owing to the anticipated and ongoing social partnership between the parties.

Key legal issues

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01

Whether the Respondent's financial difficulties constituted new and important matters of fact justifying review

Holding

No - the downturn dated from 2016 and was within the Respondent's knowledge; it could not qualify as new evidence discovered with diligence

Reasoning

The supporting affidavit itself deposed that the financial downturn started in 2016, well before the judgment. The Court had noted in the original judgment that the Respondent never made counter-offers to the Union's proposals based on its financial performance. A matter already known to and within the applicant's own knowledge cannot be 'new and important evidence' that could not be discovered by the exercise of diligence.

p. 2
02

Whether COVID-19 and the tripartite Memorandum of Understanding justified review of the judgment setting collective agreement terms

Holding

No - the proper course is social dialogue with the Union, which the Respondent never attempted, not judicial intervention

Reasoning

While COVID-19's impact could not have been foreseen when the judgment was delivered, the Memorandum of Understanding between the Ministry of Labour, COTU and FKE itself recognised social dialogue as the mechanism for varying terms. The collective agreement terms had been incorporated into individual contracts, requiring consultation under section 10(5) of the Employment Act. The Respondent had not remotely suggested it sought dialogue with the Union, so the Court declined to intervene.

p. 2

Legal principles established

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  • Terms and conditions of service set in a collective agreement become incorporated into individual employment contracts, and their variation requires consultation with the employees or their union under section 10(5) of the Employment Act, 2007
  • Court intervention in employment/organised labour matters should only be sought after an attempt at social dialogue, and should not replace it

Court orders

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  1. 1.The review application (Motion) seeking to review and set aside the judgment of 24 April 2020 is dismissed
  2. 2.No order on costs due to the anticipated and ongoing social partnership between the Union and the Respondent

Authorities

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Legislation

  • Employment Actsection 10(5)
Jurisdiction invoked
Inherent review jurisdiction of the Employment and Labour Relations Court over its own judgment (motion under review jurisdiction; no specific provision cited)

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, "Amalgamated Union of Kenya Metal Workers v Associated Motors Limited [2020] KEELRC 559 (KLR)", Case Analysis (2020). Cause number not stated in the judgment (referred to only as 'this Cause'). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/559/eng@2020-08-07

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