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ELRCPartially AllowedAppeal against judgment in Kakamega CMELRC No. E035 of 2021· [2023] KEELRC 1354 (KLR)

West Kenya Sugar Company Limited v Lihungu (Employment and Labour Relations Appeal E001 of 2023) [2023] KEELRC 1354 (KLR)

Employment and Labour Relations Court
30 May 2023
5,654 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~23 min to read original · ~4 min brief

The bottom line

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Kenyan employers must tell workers about CBAs affecting their pay, or risk being ordered to pay the difference as discrimination.

What this practically means

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Executive summary

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The Appellant, West Kenya Sugar Company Limited, appealed against the judgment of Hon. J.R. Ndururu (PM) delivered on 23rd June 2022 in Kakamega CMELRC No. E035 of 2021, which awarded the Respondent, Leonard Ngaira Lihungu, a former fixed-term field assistant, underpaid salaries, house allowance, payment in lieu of untaken leave and leave travelling allowance. The Respondent had been engaged on a one-year fixed-term contract at a consolidated salary far below CBA rates for unionised field assistants performing the same work. The Appellant argued freedom of contract and that a non-union member could not claim CBA benefits. Keli J, guided by the Selle principles, reconsidered the evidence. The court held that the trial magistrate rightly found discrimination: paying unequal wages for similar work was arbitrary, and the Appellant's failure to disclose the CBA at contracting, contrary to section 10(3)(e) of the Employment Act, vitiated the Respondent's consent, the motive being cheaper labour through material non-disclosure. However, since the union could only collect dues from members, the Appellant was obliged only to disclose the CBA, not incorporate its terms. The underpayment and house allowance awards were upheld, the latter by construing the ambiguous consolidated-salary clause against the employer under section 31 of the Employment Act. On leave, the court found the trial magistrate erred in awarding 23 days when the Respondent admitted to 9.5 outstanding days; that award was reduced to Kshs. 11,809. The Respondent's purported cross-appeal for Kshs. 5 million damages, raised only in submissions, was rejected as bad in law. The judgment was upheld on all claims save the leave award, interest at court rates was granted from 23rd June 2022, lower court costs were upheld, and no costs of appeal were awarded.

Key legal issues

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01

Whether paying a non-unionised fixed-term field assistant less than CBA rates for the same job is discrimination

Holding

It is discrimination where the difference in pay is arbitrary or based on unlawful grounds; the trial magistrate rightly so held

Reasoning

The court found the claimant held a fixed-term contract on inferior terms while performing the same field assistant job as unionised colleagues earning CBA rates. Relying on the equal pay principle in Ol Pejeta and Louw, it held that although unequal pay for equal work is not per se an unfair labour practice, it becomes discriminatory when the differing treatment rests on arbitrary grounds or ulterior motive. The employer's failure to disclose the CBA under section 10(3)(e) of the Employment Act tainted the employee's consent, and the motive was obtaining cheaper labour through material non-disclosure.

p. 8
02

Whether the respondent was entitled to CBA rates despite not being a union member

Holding

Non-membership did not save the employer because the duty was to disclose the CBA; the appellant failed to discharge that duty

Reasoning

The court accepted the union could only deduct dues from those who joined, so the appellant was not obliged to incorporate all CBA terms into the contract. However, the employer was still obliged to disclose the existence and terms of the CBA under sections 10(3) and 9(2) of the Employment Act and section 59(3) of the Labour Relations Act. The appellant produced no evidence to controvert the non-disclosure, so the consent obtained was contrary to law and the inferior terms could not stand.

p. 9
03

Whether the trial court erred in awarding 23 days' untaken leave

Holding

Yes; the respondent admitted being owed only 9.5 outstanding leave days, so the award was reduced to Kshs. 11,809

Reasoning

The appellant produced evidence that the respondent admitted at trial to being owed 9.57 outstanding leave days amounting to Kshs. 11,809. The court found this submission true and held the trial magistrate erred in awarding 23 days' payment in lieu of leave, setting aside that award and substituting the lower figure. The unpaid leave travelling allowance claim, which was not contested, was upheld.

p. 10
04

Whether house allowance was payable where the contract stated a consolidated salary

Holding

The clause was ambiguous; construed against the employer-drafter, house allowance was not provided for, so the 15% award was upheld

Reasoning

Housing is a statutory right under section 31 of the Employment Act. The contract and payslips showed a consolidated salary split into fixed pay of Kshs. 9,756 and variable pay of Kshs. 6,504 depending on performance. The court found that fixed pay is not equal to consolidated salary, the clause was ambiguous, and applying the contra proferentem rule against the employer as drawer of the contract, house allowance was not provided for. The award of 15% of basic pay was therefore upheld.

p. 9

Legal principles established

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  • A non-disclosure of an existing CBA affecting employment terms at the contracting stage vitiates the employee's consent and constitutes unfair labour practice
  • Paying different wages for similar work is discriminatory where the difference rests on arbitrary grounds or ulterior motive
  • Written submissions cannot substitute for a cross-appeal; a cross-appeal must be pleaded and served
  • Ambiguous contract clauses are construed against the drawer of the contract

Court orders

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  1. 1.The judgment of the trial court in Kakamega ELRC Claim No. 35 of 2021 delivered on 23rd June 2022 is upheld on all claims save for payment in lieu of leave days
  2. 2.The award on leave of Kshs. 27,858 (23 days) is set aside and substituted with Kshs. 11,809.00 (9.5 days)
  3. 3.Total underpayment salaries upheld at Kshs. 289,618
  4. 4.Total unpaid house allowance upheld at Kshs. 78,280.25
  5. 5.Judgment in lieu of leave not taken (9.5 days) Kshs. 11,809.00
  6. 6.Unpaid leave travel allowances Kshs. 2,850; total amount Kshs. 382,557.95 payable subject to statutory deductions
  7. 7.Interest awarded at court rates from date of judgment in the suit of 23rd June 2022 until payment in full
  8. 8.Costs in the lower court upheld; no costs of appeal

Authorities

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Legislation

  • Constitution of KenyaArticle 41 (labour rights)
  • Constitution of KenyaArticle 27 (non-discrimination)
  • Constitution of KenyaArticle 4
  • Employment ActSection 5(3)(b)
  • Employment ActSection 9(2)
  • Employment ActSection 10(3)(e)
  • Employment ActSection 14
  • Employment ActSection 28
  • Employment ActSection 31
  • Labour Relations ActSection 4(1)
  • Labour Relations ActSections 57 and 59

Cases cited (14)

  • Selle And Another v Associated Motor Boat Company Ltd & Others
    [1968] EA 123
  • Ol Pejeta Ranching Limited v David Wanjau Muhoro
    (2017) eKLR
  • Barclays Bank of Kenya Ltd & Another v Gladys Muthoni & 20 Others
    (2018) eKLR
  • Obware Georgiadis Ochieng & 61 Others v Kenya Wildlife Service
    (2016) eKLR
  • Christopher O. Omolo v Severin Sea Lodge
    (2016) eKLR
  • Omondi Justus Rang'anga & 28 Others v KCB Bank Kenya Limited
    Cause No. 618 of 2021
  • Kenya Union of Sugar Plantation and Allied Workers v West Kenya Sugar
    Cause No. 110 of 2013
  • KUSPAW v West Kenya Sugar Company
    Cause No. 258 of 2018
  • KUSPAW v West Kenya Limited
    Cause No. 388 of 2018
  • Rose Wangui Mambo & 2 Others v Limuru County Club & 15 Others
    [2014] eKLR
  • Peter K. Waweru v Republic
    [2006] eKLR
  • Humphrey Nyaga Thomas & 25 Others v Kenyatta University
    (2021) eKLR
  • Erastus K. Gitonga v National Environmental Management Authority, Law Society of Kenya (interested party)
    2019 eKLR
  • Louw v Golden Arrow Bus Services (Pty) Ltd
    (1999) ZALC 166
On appeal from
Kakamega CMELRC (Principal Magistrate's Court)
CMELRC No. E035 of 2021
Jurisdiction invoked
Appellate jurisdiction of the Employment and Labour Relations Court over appeals from the magistrate's court in employment matters

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "West Kenya Sugar Company Limited v Lihungu (Employment and Labour Relations Appeal E001 of 2023) [2023] KEELRC 1354 (KLR)", Case Analysis (2023). Appeal against judgment in Kakamega CMELRC No. E035 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1354/eng@2023-05-30

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