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ELRCPartially AllowedMemorandum of Claim dated 23rd October 2020 (ELRC, Nairobi)· [2021] KEELRC 158 (KLR)

Bakery Confectionery Food Manufacturing and Allied Workers Union (K) v Kenafric Industries Limited [2021] KEELRC 158 (KLR)

Employment and Labour Relations Court
10 December 2021
MOMaureen Onyango
5,157 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~21 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled an employer cannot cut workers' pay for joining a union and must repay all docked salaries with interest of costs.

What this practically means

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Executive summary

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The Claimant, a trade union registered under the Labour Relations Act, 2007, claimed that after seven of its members (the grievants) joined it in October 2017, the Respondent, a food manufacturing company, unilaterally reduced their basic salaries and house allowances to the CBA basic minimum rates and withdrew their communication allowance. The Claimant sought declarations that the actions were unlawful and unconstitutional under Articles 27(5) and 41(2)(c), reinstatement of the increments, computation and payment of arrears, compensation, and costs. The Respondent justified the changes as harmonization required by the CBA's preamble and Appendix A, arguing that failure to align the grievants' pay would discriminate against other unionized employees, and that the communication allowance was discretionary. The Court framed three issues: whether the scaling down breached individual contracts, the CBA and existing law; whether it violated Articles 27(5) and 41(2); and whether the reliefs were payable. Interpreting clause 21 of the CBA, the Court held the agreement contemplated that employees earning above the basic minimum rates would have increments loaded on actual earnings, and did not envisage reduction to minimum rates. Section 10(5) of the Employment Act required consultation before varying contractual terms, and the Respondent admittedly did not consult. The Court found an unfair labour practice and discrimination for union membership, violating Article 41. Declarations issued accordingly, with reinstatement of increments and payment of arrears from October 2017; the compensation claim was denied as payment of the varied salaries suffices. Costs were awarded to the Claimant.

Key legal issues

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01

Whether harmonization of grievants' salaries to CBA minimum rates was lawful

Holding

Unlawful: the CBA provided that employees earning above the basic minimum rates as at 31 December 2016 were to have wage increments based on what they were earning; reduction to minimum rates was not contemplated

Reasoning

Clause 21(c) of the CBA contemplated two scenarios - employees below and above the minimum rates. For those above, increments were to be loaded on actual earnings. The CBA did not envisage reduction to minimum rates. Additionally, Section 10(5) of the Employment Act required consultation before varying contractual terms, which the Respondent admittedly did not do, rendering the reduction unilateral, unfair and unjustified.

p. 6
02

Whether the impugned actions violated Articles 27(5) and 41(2) of the Constitution

Holding

Yes - the reduction without consultation violated the right to fair labour practices and fair remuneration, and the grievants were discriminated against for joining the union

Reasoning

Having found the reduction unjustified and an unfair labour practice, the Court held it violated Article 41 on fair labour practices and fair remuneration. The grievants were discriminated against on account of joining the Claimant union, contrary to Article 27(5) and Section 5(2)(c) of the Labour Relations Act which prohibit prejudice due to trade union membership.

p. 7

Legal principles established

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  • An employer may not unilaterally reduce an employee's salary without consultation; unilateral variation amounts to an unfair labour practice
  • Under Section 10(5) of the Employment Act, a change to contractual terms requires consultation with the employee and written notice
  • A CBA does not envisage reducing employees earning above the basic minimum rates to those minimum rates; increments for such employees are loaded on actual earnings

Court orders

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  1. 1.Declaration that the Respondent's scaling down of the grievants' terms and conditions of service on account of joining the Claimant union violates the Collective Agreement and existing law and is unlawful, illegal, null and void
  2. 2.Declaration that the Respondent's actions violate the grievants' constitutional rights under Article 27(5) and Article 41(2)(c) of the Constitution and are unconstitutional, null and void
  3. 3.Immediate reinstatement of the grievants' salary increments on basic salary, house allowance and communication allowance, without loss of negotiated increments, for grievants still in employment
  4. 4.Mandatory order compelling the Respondent to compute and immediately pay the grievants in full the unlawfully varied salaries from October 2017 to date or to the last day of employment for grievants no longer working for the Respondent
  5. 5.Costs awarded to the Claimant

Authorities

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Legislation

  • Labour Relations ActSections 5(2)(c), 59(1), 59(3), 62
  • Employment ActSections 10(5), 10(1)
  • Constitution of Kenya, 2010Articles 27(4), 27(5), 41(1), 41(2), 159(2)(d), 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (6)

  • Kenya Union of Commercial Food & Allied Workers Union (K) v Tusker Mattresses
    (2020) eKLR
  • Kenya County Government Workers Union v County Government of Wajir
  • James Mutisya Nzokila & 8 others v Kenya Nut Company Limited
    [2019] eKLR
  • Said Ndege v Steel Makers Ltd
    [2014] eKLR
  • David Mathu Kimingi v SMEC International PTY Limited
    [2021] eKLR
  • Maxwell Miyawa & 7 Others v JSC
    (2017) eKLR (Nakuru ELRC Petition No. 29/2016)
Jurisdiction invoked
Labour Relations Act, 2007 and Employment Act, 2007 (trade dispute arising from Section 62 conciliation)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Bakery Confectionery Food Manufacturing and Allied Workers Union (K) v Kenafric Industries Limited [2021] KEELRC 158 (KLR)", Case Analysis (2021). Memorandum of Claim dated 23rd October 2020 (ELRC, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/158/eng@2021-12-10

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