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ELRCPartially AllowedMemorandum of Claim dated 25th May 2022· [2023] KEELRC 1773 (KLR)

Kenya Union of Commercial, Food & Allied Workers v Text Book Centre Limited (Cause E354 of 2022) [2023] KEELRC 1773 (KLR)

Employment and Labour Relations Court
14 July 2023
AMANNA NGIBUINI MWAURE
1,791 words in judgment
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The bottom line

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Kenya's Employment Court ruled that an employer's financial struggles justified refusing a union's demanded pay rise, ordering a compromise proposal instead.

What this practically means

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Executive summary

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The claimant union filed a memorandum of claim on 25 May 2022 seeking enforcement of a collective bargaining agreement for the period 2021-2023 with a respondent employer with whom it had a recognition agreement. The parties negotiated from June 2021, reached agreement on some clauses, and deadlocked on others, prompting a trade dispute reported to the Cabinet Secretary, Ministry of Labour. A conciliator, Mr Dennis Murithi, was appointed and held several meetings, culminating in a report dated November 4, 2022. The claimant sought adoption of the agreed clauses, adoption of its own proposals on the unagreed clauses, and an order compelling the Respondent to sign the CBA within 30 days. The Respondent opposed, citing harsh economic times, losses from 2020 to 2022 caused by changes in the school calendar, and inability to sustain additional wage costs. The claim proceeded by written submissions; the claimant filed none addressing the financial-difficulty issue and attached no witness statements. The Court accepted the Respondent's evidence of financial hardship, and the conciliation report corroborated that the Respondent had nonetheless increased its labour force and wages between 2017 and 2021. Guided by the ELRC decision in Kenya Petroleum Oil Workers Union v National Oil Corporation of Kenya, the Court declined the claimant's prayer for the unagreed clauses and ordered the parties to adopt the Respondent's counter proposal (annexure M 10) forthwith, negotiate a fresh CBA within 90 days, and mention the matter on October 11, 2023. Each party was to bear its own costs.

Key legal issues

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01

Whether the Respondent's financial difficulties justify declining the claimed salary increment

Holding

Yes. The Court accepted the Respondent was facing financial difficulties making it unable to sustain the claimed increment, and adopted the Respondent's counter proposal instead.

Reasoning

The claimant filed no submissions on the financial-difficulty issue and no witness statements; the claim did not address it. The Ministry of Labour conciliation report of November 4, 2022 confirmed the Respondent had consistently increased its labour force and wages despite losses between 2017 and 2021. Guided by Kenya Petroleum Oil Workers Union v National Oil Corporation of Kenya, the Court found increasing the wage bill unrealistic and ordered the parties to adopt the Respondent's counter proposal.

p. 3

Legal principles established

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  • A court faced with a question of wage increment ought to take into account productivity and the employer's ability to pay.
  • A salary increase whose effect would be to collapse the employer harms the very workers it is intended to benefit.

Court orders

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  1. 1.The parties to adopt the Respondent's counter proposal as per annexure M 10 forthwith and implement it right away
  2. 2.The parties to come up with a current bargaining agreement (CBA) within 90 days and mention before the Court on October 11, 2023
  3. 3.Each party to meet their respective costs

Authorities

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Legislation

  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B

Cases cited (3)

  • Kenya Tea Growers Association v Kenya Plantation and Agricultural Workers Union
    2018 eKLR
  • Kenya Petroleum Oil Workers Union v National Oil Corporation of Kenya
    2021 eKLR
  • Kenya Game Hunting and Safari Workers Union versus Micato Safaris
    2016 eKLR
Jurisdiction invoked
Jurisdiction over the collective bargaining dispute following conciliation by the Cabinet Secretary, Ministry of Labour and Social Protection

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, "Kenya Union of Commercial, Food & Allied Workers v Text Book Centre Limited (Cause E354 of 2022) [2023] KEELRC 1773 (KLR)", Case Analysis (2023). Memorandum of Claim dated 25th May 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1773/eng@2023-07-14

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