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ELRCPartially AllowedCause No 2012 of 2016· [2024] KEELRC 484 (KLR)

Kenya Building Construction Timber and Furniture Industries Employees Union v Imara Enterprises Limited (Cause 2012 of 2016) [2024] KEELRC 484 (KLR)

Employment and Labour Relations Court
6 March 2024
JGJacob Gakeri
4,775 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan hardware employer won on wage rates but lost on unfair termination, paying modest compensation because it skipped notice and a hearing.

What this practically means

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Executive summary

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The Building and Construction Workers Union sued on behalf of six grievants alleging unlawful dismissal by a Thika hardware business on 13th February 2014, seeking declarations, terminal benefits of Kshs.1,198,094 based on Legal Notice No. 20 of 2012, and compensation. The Respondent denied the wage order applied, asserting the grievants were casuals paid daily and dismissed over suspected theft of building materials. The court framed five issues. First, applying ejusdem generis, it held 'allied building activities' in the Wage Order did not cover stocking and selling construction materials, so the prescribed wages were inapplicable. Second, it held a union's locus to sue derives from membership under Section 12(2) of the ELRC Act, not Section 54 recognition; membership cards established prima facie membership. Third, the Respondent having kept no records, the court found the grievants who testified were employees whose casual engagements converted to term contracts under Section 37 of the Employment Act. Fourth, though the Respondent may have had a reason, termination failed for want of fair procedure under Sections 41 and 45(2). On reliefs, the court awarded a declaration, one month's pay in lieu of notice, compensation equivalent to two months' salary totalling Kshs.73,000, and Kshs.25,000 reimbursement of union expenses, aggregated at Kshs.109,500. Claims for leave, arrears, days worked and service pay were dismissed for want of particulars and proof. Only three grievants who testified benefited; the suit otherwise partially succeeded.

Key legal issues

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01

Applicability of Legal Notice No. 20 of 2012 to the Respondent

Holding

The Wage Order did not apply because the Respondent's business was stocking and selling construction materials, not building or allied building activities

Reasoning

The court applied the ejus dem generis rule to Regulation 2(c). The phrase 'allied building activities' following specific construction activities was confined to that class. All witnesses confirmed the Respondent ran a hardware shop and undertook no construction, so the prescribed minimum wages were inapplicable.

p. 6
02

Union's locus standi

Holding

The union had locus standi to sue on behalf of the grievants by virtue of their membership, notwithstanding absence of a recognition agreement

Reasoning

Section 54 concerns recognition for collective bargaining only. Locus to sue for members rests on membership under Section 12(2) of the ELRC Act, as held in Kenya Shoe & Leather Workers Union and Modern Soap Factory. Membership cards were prima facie evidence of membership, uncontroverted by the Respondent.

p. 7
03

Whether the grievants were employees

Holding

The three testifying grievants proved employment; initial casual engagement transitioned to term contracts under Section 37

Reasoning

The Respondent kept no records and adduced no controverting evidence of payment or durations. Long service from 2004, 2006 and 2009 as casuals triggered the Section 37 conversion to term contracts. The court found employment proved for the three grievants who testified.

p. 8
04

Fairness of termination

Holding

Termination was unfair for want of procedural fairness despite a possible valid reason

Reasoning

The Respondent may have had a reason (loss of building materials) but gave no notice or hearing as Section 41 requires. RWI's evidence was contradictory on the theft, arrests and police report, with no OB number. Failure to follow prescribed procedure rendered the terminations unfair.

p. 9
05

Reliefs

Holding

Declaration, one month's pay in lieu of notice, two months' salary compensation and Kshs.25,000 reimbursement of union expenses awarded; other prayers dismissed for want of particulars or proof

Reasoning

Notice pay was awarded for want of evidence of Section 35/36 compliance. Compensation was fixed at two months' salary considering length of service, contribution to termination and absence of disciplinary records. Leave, arrears, days worked and service pay claims failed for lack of particulars and proof.

p. 11

Legal principles established

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  • Section 54(1) of the Labour Relations Act on recognition does not confer a right on a union to represent members in court; locus standi derives from membership and ELRC Act Section 12(2)
  • General words following particular words in a statutory provision are construed ejus dem generis
  • Prolonged casual employment transitions to term contracts under Section 37 of the Employment Act
  • A valid and fair reason plus fair procedure are required for lawful termination

Court orders

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  1. 1.Declaration that termination of employment was unfair
  2. 2.Sum of Kshs.109,500/= comprising pay in lieu of notice and compensation for unfair termination of employment
  3. 3.The Claimant union is awarded Kshs.25,000/= as reimbursement of direct expenses
  4. 4.Orders accordingly

Authorities

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Legislation

  • Labour Institutions (Building and Construction Industry) (Wages) Order, 2012Legal Notice No. 20 of 2012, Regulation 2
  • Labour Relations ActSection 54(1)
  • Employment Act, 2007Sections 2(1), 10, 35(1), 35(6)(d), 36, 37, 41, 45(2), 49(1)(c), 90
  • Employment and Labour Relations Court ActSection 12(2)
  • Labour Institutions ActSection 54(1) (as erroneously cited by the Claimant)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticles 159(2)(d) and 48

Cases cited (8)

  • Kenya Hotels & Allied Workers Union V Diani Sea Resort t/a Carslake Nominee Ltd
    (2015) eKLR
  • Chemelil Sugar Company V Ebrahim Ochieng Otuon & 2 others
    (2015) eKLR
  • North End Trading Co. Ltd V The City Council of Nairobi
  • Samuel Ochieng Atinda V Nakuru Express Supplies & Services Ltd
    (2015) eKLR
  • Kenya Shoe & Leather Workers Union V Falcon Tanners Ltd
    (2013) eKLR
  • Modern Soap Factory V Kenya Shoe & Leather Workers Union
    (2020) eKLR
  • Walter Ogal Anuro V Teachers Service Commission
    (2013) eKLR
  • Naima Khamis V Oxford University Press (EA) Ltd
    (2017) eKLR
Jurisdiction invoked
Section 12(2) of the Employment and Labour Relations Court Act, 2011

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 Building Construction Timber and Furniture Industries Employees Union v Imara Enterprises Limited (Cause 2012 of 2016) [2024] KEELRC 484 (KLR)", Case Analysis (2024). Cause No 2012 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/484/eng@2024-03-06

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