Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No E034 of 2022· [2023] KEELRC 2650 (KLR)

Kenya Union of Commercial Food and Allied Workers v Kangunu Farmers Cooperative Union Limited (Cause E034 of 2022) [2023] KEELRC 2650 (KLR)

Employment and Labour Relations Court
27 October 2023
OMOnesmus N Makau
1,367 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~5 min to read original · ~4 min brief

The bottom line

#

Kenya's ELRC awarded coffee cooperative workers 6.5% and 6.25% annual pay rises, ruling employers must share wealth created by workers.

What this practically means

#

Executive summary

#
The claimant, a registered trade union, and the respondent, a Murang'a coffee marketing cooperative society, had a Recognition Agreement and registered CBAs. Negotiations for the 2016-2018 and 2018-2020 CBA cycles stalled over the general wage increment: the union demanded 8% per year for four years, while the respondent asserted a 5% per year agreement signed on 22nd November 2019, which the union disputed. After failed conciliation, the court obtained an Economic Report from the CPMD, which recommended 6.5% per year for the first cycle and 6.25% per year for the second, based on CPI-derived inflation compensation, productivity and affordability data. Only the claimant filed submissions. Adopting the Court of Appeal's test in Kenya Tea Growers Association v KP&AWU, the court weighed inflation (members lost buying power since 2016), the respondent's rising productivity (income growth of 116% in 2021 and 35% in 2022) and its ability to pay (the increment adds only Kshs 2.06 million over four years). The CPMD found no adverse wage differential between unionisable and management staff. The court held that workers are entitled to a share of the wealth they helped create, rejected both parties' positions, and awarded 6.5% per year for 2016-2018 and 6.25% per year for 2018-2020, directed the parties to conclude the CBA within 30 days, and ordered each party to bear its own costs. The judgment was delivered via Teams with the parties' consent, waiving Rule 28(3) of the ELRC Procedure Rules.

Key legal issues

#
01

Entitlement to general wage increment for the 2016-2018 and 2018-2020 CBA cycles

Holding

Members awarded 6.5% per year (2016-2018) and 6.25% per year (2018-2020), following the CPMD economic report

Reasoning

Applying the jurisprudence from Kenya Tea Growers Association v KP&AWU, the court considered inflation (CPI-based compensation of 12.9% and 12.5% divided by two per cycle), the employer's rising productivity (income growth of 116% in 2021 and 35% in 2022), ability to pay (increment adds only Kshs 2.06 million over four years), and found no adverse wage differential. The claimant's 8% demand and the respondent's asserted 5% agreement were both rejected.

p. 3
02

Whether the employer has financial capacity to pay

Holding

Yes - the respondent is financially able to afford the awarded increments

Reasoning

The CPMD report showed the respondent's income rose from Kshs 107,882,111 in 2020 to Kshs 319,319,509 in 2022. Although deficits were recorded in 2020-2022, these were attributed to high percentages paid to members (78% in 2021, 94% in 2022). The awarded increments would add a paltry Kshs 2.06 million to the wage bill over four years, which is affordable.

p. 3

Legal principles established

#
  • Wage increment depends on productivity, rise in cost of living (inflation) and the employer's ability to pay
  • Workers are entitled to a share of the wealth they help create where the employer's productivity rises

Court orders

#
  1. 1.The claimant's members are awarded general wage increment of 6.5% each year for the 2016-2018 CBA
  2. 2.The claimant's members are awarded general wage increment of 6.25% each year for the 2018-2020 CBA
  3. 3.The parties are directed to conclude the CBA within 30 days of today
  4. 4.Each party meets its own costs of the suit

Authorities

#

Legislation

  • Wage GuidelinesWage Guideline No. 2 (productivity to form major part of compensation considerations)
  • Employment and Labour Relations Court (Procedure) RulesRule 28(3)

Cases cited (1)

  • Kenya Tea Growers Association v Kenya Plantation & Agricultural Workers Union
    (2018) eKLR
Jurisdiction invoked
Dispute referred to the Employment and Labour Relations Court after failed conciliation by the Labour Officer, Murang'a (unspecified statutory provision in the judgment)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Kenya Union of Commercial Food and Allied Workers v Kangunu Farmers Cooperative Union Limited (Cause E034 of 2022) [2023] KEELRC 2650 (KLR)", Case Analysis (2023). Cause No E034 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2650/eng@2023-10-27

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