Amalgamated Union of Kenya Metal Workers v Mohamed t/a Rizwan Metal Craft (Cause E095 of 2021) [2023] KEELRC 2305 (KLR)
The bottom line
#A Kenyan employment court has confirmed that gratuity is not an automatic right—it only becomes payable if agreed in a registered collective bargaining agreement.
What this practically means
#Executive summary
#Key legal issues
#Whether gratuity is payable as of right absent agreement
Gratuity is purely gratuitous and not a benefit in law unless agreed in a registered CBA; the court cannot impose gratuity rates on the parties
The court construed Article 41(5) of the Constitution, noting the active word 'engage', meaning collective bargaining requires involvement and negotiation. Under Section 57(1) of the LRA parties negotiate terms and conditions of service. Since the gratuity clause was not agreed, and gratuity is gratuitous, it becomes binding only once agreed and the CBA is registered under Section 59(5) of the LRA. The court declined to fix rates and directed parties to negotiate in good faith.
Whether the CBA should be registered on comparison with other registered CBAs
A CBA is a negotiated document; the statutory provisions set the irreducible minimum and parties may only improve on them through agreement
The claimant argued no registered CBA exists without a gratuity clause at not less than 15 days per year. The respondent relied on Section 35 of the Employment Act and Section 54(1) of the LRA, contending gratuity is a matter open to negotiation subject to the employer's financial capacity. The court held gratuity must be negotiated in good faith within the balance of legitimate expectations, citing Bamburi Cement Ltd v William Kilonzi.
Legal principles established
#- Gratuity is a purely gratuitous payment and is not a benefit in law unless provided for in a CBA registered with the court under Section 59(5) of the LRA
- A collective agreement becomes enforceable upon registration by the Court and is effective from the date agreed by the parties (Section 59(5) LRA)
- Payment of gratuity must be negotiated by the parties in good faith within the balance of legitimate expectations and rights
Court orders
#- 1.Orders sought by the claimant to have the court determine gratuity rates are declined
- 2.The court brought to the attention of the respondent the provisions of Section 57(2) of the LRA allowing negotiations over any contested matter in good faith
- 3.The court brought to the attention of the claimant the provisions of Sections 57(3) and (4) of the LRA on confidentiality and disclosure in negotiations
- 4.Parties have liberty to engage and agree on payment of gratuity in the next phase of CBA negotiations
- 5.Parties enjoy recognition and each party to bear own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over recognition agreements and collective bargaining disputes (Labour Relations Act, 2007; Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Amalgamated Union of Kenya Metal Workers v Mohamed t/a Rizwan Metal Craft (Cause E095 of 2021) [2023] KEELRC 2305 (KLR)", Case Analysis (2023). Cause No E095 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2305/eng@2023-09-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.