Kenya Union of Sugar Plantation & Allied Workers v Butali Sugar Mills Limited [2021] KEELRC 2022 (KLR)
The bottom line
#Kenyan employers must pay house allowance to piece-rate workers unless they obtain a special exemption under section 31(3) of the Employment Act.
What this practically means
#Executive summary
#Key legal issues
#Entitlement of piece-rate employees to housing or house allowance
The mill cane tractor drivers are entitled to housing or an allowance to cover rent because their contracts are not consolidated, the CBA did not agree on housing, no Wages Order deemed their piece rates to include house allowance, and no section 31(3) exclusion order existed
Section 31 of the Employment Act, 2007 places a primary statutory burden on employers to provide housing or pay rent allowance. The only exceptions are consolidation in the contract, agreement in a CBA, a Wages Order deeming daily/hourly rates to include house allowance, or a Cabinet Secretary exclusion order under section 31(3). None applied: the drivers were on piece rates, not daily or hourly rates, and the Respondent did not demonstrate any exclusion order existed.
Departure from earlier authorities holding piece-rate pay to be consolidated or inclusive of house allowance
The Court departed from Mboo Wambua v Export Trading Co Ltd and Wilfred K. Onyango v DHL Excel Supply Chain Kenya Ltd and other cases cited by the Respondent
Those authorities conflicted with the Court's reading of section 31 of the Employment Act and the definition of piece work under section 2. The Court found piece work cannot entail daily or hourly payment, and the statutory scheme allows employers relief only through section 31(3), so the earlier holdings were not followed.
Discrimination in the collective bargaining agreement
The omission of house allowance for mill cane tractor drivers from the mutually negotiated CBA was not discriminatory
The CBA was mutually negotiated and the parties simply failed to agree on the housing element for the drivers during negotiations. A negotiated omission does not constitute discrimination, so the Union's discrimination claim failed.
Legal principles established
#- The statutory obligation to provide housing or pay house allowance under section 31 of the Employment Act applies to all employees, including piece-rate employees, unless a consolidation or collective bargaining exception, a Wages Order deeming rates to include house allowance, or a Cabinet Secretary exclusion order under section 31(3) applies
- Piece-rate wages are not daily or hourly rates deemed to include house allowance under the Regulation of Wages Orders
- An employer who places employees on piece rate must secure an exclusion order from the Cabinet Secretary through the National Labour Board under section 31(3) to be relieved of the housing obligation
Court orders
#- 1.A declaration that the action of the Respondent not to pay house allowance to mill cane tractor drivers offends section 31(1), (2) & (3) of the Employment Act, 2007
- 2.An order commanding the Respondent to start paying the mill cane tractor drivers house allowance from March 2021
- 3.Each party to bear their own costs
- Jurisdiction invoked
- First-instance jurisdiction over a trade dispute referred to the Employment and Labour Relations Court after failed conciliation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Sugar Plantation & Allied Workers v Butali Sugar Mills Limited [2021] KEELRC 2022 (KLR)", Case Analysis (2021). Cause (Issue in Dispute: House allowance for mill tractor drivers), filed 18 February 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2022/eng@2021-03-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.