Amalgamated Union of Kenya Metal Workers v Associated Motors Limited [2020] KEELRC 1265 (KLR)
The bottom line
#A Kenyan court ordered Associated Motors to pay workers 6% and 5% wage raises, rejecting the union's 15% demand and confirming courts can't set minimum wages.
What this practically means
#Executive summary
#Key legal issues
#Whether the Court can set basic/minimum wages
It cannot; that is the Cabinet Secretary's statutory role
The Court held that minimum wage determination is reserved by statute to the Cabinet Secretary for Labour acting on the advice of Wages Councils. The Court noted the Central Planning and Monitoring Unit established that existing wages paid by the Respondent were already above the prescribed minimum wages, so no interference was needed.
General wage increment for 2016/2017 and 2017/2018
6% first year and 5% second year, per the Central Planning and Monitoring Unit recommendation
The Union sought 15% per year but the Unit, weighing inflation, comparability, employer financial capacity and related variables, recommended 6% and 5%. The Respondent made no counteroffer and did not demonstrate inability to absorb the recommended increase, so the Court adopted the recommendation as neither arbitrary nor unreasonable.
Housing/house allowance
5.5% increase on the deconsolidated wage over the two-year tenure
Section 31 of the Employment Act obliges the employer to provide housing or pay an allowance. The Union demanded 15% per year with no counteroffer; the Unit recommended a 5.5% increase of the deconsolidated wage over the Collective Agreement's tenure, which the Court adopted.
Leave travelling allowance
Increased to Kshs 6,150/- per the Unit's recommendation
The lapsed agreement provided Kshs 5,830/-. The Union proposed Kshs 6,704/- and Kshs 7,096/- respectively; the Respondent made no counteroffer. The Unit analysed the real value of the existing rate and recommended Kshs 6,150/-, which the Court adopted.
Items on which no recommendation was made
Maintained as provided for in the lapsed collective agreement
The Unit made no recommendations on redundancy, baggage allowance, funeral grant, medical expenses, acting allowance, heavy-duty allowance, disturbance allowance and commuter allowance. The Court ordered these be maintained as provided in the lapsed agreement between the Union and the Employers Association of which the Respondent was formerly a member.
Effective date and duration of the Collective Agreement
1 July 2016 to 30 June 2018
Following the lapse of the last agreement on 30 June 2016 and in keeping with practice and custom, the new agreement should run from 1 July 2016 to 30 June 2018, with arrears payable within 60 days failing which interest at Court rates accrues.
Legal principles established
#- Determination of basic or minimum wages is the statutory duty of the Cabinet Secretary for Labour acting on the advice of Wages Councils; the Court cannot set minimum wages.
- In determining a general wage increment the Court considers cost of living/inflation, comparability, historical factors, financial performance of the employer, productivity and previous Court awards.
- Under section 31 of the Employment Act, 2007 the primary obligation of an employer is to provide housing accommodation and in default to pay a house allowance.
Court orders
#- 1.The parties to execute a Collective Agreement forthwith incorporating a general wage increment of 6% for 2016/2017 and 5% for 2017/2018
- 2.A housing (house allowance) increment of 5.5% for 2016/2018
- 3.Leave travelling allowance of Kshs 6,150/- for 2016/2018
- 4.Other terms to remain as provided for in the Collective Agreement which expired on 30 June 2016
- 5.The Collective Agreement to be effective 1 July 2016 to 30 June 2018; arrears to be paid within 60 days, failing which they attract interest at Court rates from lapse of the 60 days
- 6.No order on costs
- Jurisdiction invoked
- Trade dispute referred to the Court under the Labour Relations Act following a Certificate of Unresolved Dispute issued by the Conciliator
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Amalgamated Union of Kenya Metal Workers v Associated Motors Limited [2020] KEELRC 1265 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1265/eng@2020-04-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.