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ELRCPartially AllowedNot stated in the judgment· [2024] KEELRC 219 (KLR)

Kenya Union of Commercial and Food Allied Workers v Transmattresses Limited (Cause E009 of 2023) [2024] KEELRC 219 (KLR)

Employment and Labour Relations Court
8 February 2024
2,367 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, a trade union, sought review of the 2017-2019 CBA with Naivas Limited. After notice to negotiate and failed conciliation before the Ministry of Labour (the conciliator recommending a one-year suspension of negotiations due to Covid-19), the union filed a memorandum of claim on 9th September 2020 seeking adoption of its proposals and an order compelling the Respondent to sign the 2019-2020 CBA. The claim was prosecuted by written submissions, and the court obtained a CPMU economic report dated 3rd November 2023 under section 15(5) of the Employment and Labour Relations Court Act, analysing staffing levels, labour costs, net profits and wage benchmarks. The court found the dispute properly before it under sections 69 and 73 of the Labour Relations Act and made an award clause by clause: agreed clauses were retained; basic minimum wages were set at least Kshs. 200 above statutory minimums under Legal Notice No. 125 of 2022 (about 5% above prevailing statutory rates); a 5% general wage increase was awarded for each of the two years; house allowance remained at 15% of basic salary; leave travelling allowance increased to Kshs. 2,000; coffin contribution increased to Kshs. 20,000; disturbance allowance increased to Kshs. 15,000. The new CBA runs from 1st May 2020 for two years, the 2019-2020 period being suspended per the conciliator and the Tripartite MOU. Commuter allowance and annual bonus were declined; agency fees were allowed under section 49 of the Labour Relations Act. Judgment delivered virtually on 8th February 2024 by Maureen Onyango, Judge.

Key legal issues

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01

Whether the CBA dispute was properly before the court

Holding

Yes - the conciliator's report recommending suspension of negotiations constituted a failure to reach agreement, bringing the dispute within sections 69 and 73 of the Labour Relations Act

Reasoning

The union gave notice under the CBA's amendment clause, reported the dispute to the Ministry of Labour under section 62, and a conciliator was appointed. Conciliation failed as the Respondent did not attend meetings or substantiate claims of poor business performance. The conciliator's report recommending suspension for one year was treated as a failure to reach agreement, vesting jurisdiction in the court.

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02

What wage increases and CBA terms were reasonable

Holding

Minimum wages set at least Kshs. 200 above statutory minimums; 5% general wage increase per year; most clauses retained; commuter allowance and bonus declined; agency fees adopted under section 49 of the Labour Relations Act

Reasoning

The court relied on the CPMU economic report showing the Respondent remained profitable, the CPI rise of 6.04% over two years, statutory minimum wages under Legal Notice No. 125 of 2022, and the out-going CBA's increases. The Covid-19 period 2019-2020 was suspended per the conciliator and the Tripartite MOU, with the new CBA effective 1.5.2020 for two years.

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Legal principles established

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  • An employer cannot pay wages below the statutory minimum rates of pay prescribed by the Cabinet Secretary for Labour
  • Wage awards should be guided by national wage guidelines, productivity and the employer's economic capacity as analysed by the CPMU under section 15(5) of the Employment and Labour Relations Court Act

Court orders

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  1. 1.Retention of agreed clauses (Preamble, Clauses 4, 5, 6, 8, 10, 13, 18, 19, 20, 21, 22 and 25) as per the outgoing CBA
  2. 2.Award of new basic minimum wage entry points per category, being at least Kshs. 200 above the statutory minimum wages in Legal Notice No. 125 of 1st July 2022 (approximately 5% above statutory minimum rates)
  3. 3.General wage increase of 5% for the first year of the CBA and a further 5% for the second year, employees first to be brought to the CBA minimum rates if below
  4. 4.House allowance retained at 15% of basic salary
  5. 5.Annual leave clause retained; leave travelling allowance increased to Kshs. 2,000 per year
  6. 6.Compassionate leave, sick leave, safari allowance, medical treatment, uniforms/protective clothing, retirement, redundancy and certificate of service clauses retained as per outgoing CBA
  7. 7.Employer's coffin contribution increased to Kshs. 20,000; rest of funeral expenses clause retained
  8. 8.Disturbance allowance on transfers increased to Kshs. 15,000
  9. 9.New CBA to come into force on 1.5.2020 for 2 years, with the period 1.5.2019 to 1.5.2020 suspended as proposed by the conciliator in view of Covid-19 hardships and the Tripartite Memorandum of Understanding
  10. 10.Proposed new clauses on commuter allowance and annual bonus declined; proposal on agency fees allowed and adopted as provided in section 49 of the Labour Relations Act

Authorities

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Legislation

  • Labour Relations Actsections 62, 69, 73, 49
  • Employment and Labour Relations Court Actsection 15(5)
  • Companies Actnot specified
  • Legal Notice No. 125 of 1st July, 2022 (statutory minimum wages order)minimum wages
Jurisdiction invoked
Sections 69 and 73 of the Labour Relations Act (dispute referred following failure of conciliation under section 62)

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 and Food Allied Workers v Transmattresses Limited (Cause E009 of 2023) [2024] KEELRC 219 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/219/eng@2024-02-08

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