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IndustrialPartially AllowedCause 57 of 2006

Kenya Building, Construction, Timber, Furniture & Allied Industries Employees’ Union v Niazsons (K) Ltd. (Cause 57 of 2006) (Employment and Labour) [2006] KEIC 2 (KLR)

Industrial Court of Kenya (Employment and Labour)
27 September 2006
CCCharles P. ChemuttutJKJ.M. KilonzoOWO.A. Wafula
2,003 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ordered a company's receiver to pay 20 dismissed workers their terminal dues within 60 days, but refused extra compensation.

What this practically means

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Executive summary

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The Minister for Labour referred a trade dispute to the Industrial Court under Section 8 of the Trade Disputes Act, Cap. 234, concerning the alleged wrongful dismissal of 20 employees (the grievants) of Niazsons (K) Ltd, a building and construction company. The grievants, employed between March 1998 and July 1999, were dismissed on various dates between June 1999 and March 2000 on completion of specific works, without payment of terminal dues. The Union, a registered trade union with no recognition agreement or collective bargaining agreement, reported the dispute; a Ministry investigator found the grievants had been declared redundant in disregard of the applicable sectoral order (L.N. No. 153 of 1998) and recommended payment of full terminal/redundancy dues and certificates of service. The Company filed no reply and did not appear despite notice; a letter from Mungu & Co. Advocates indicating the Company had been placed under receivership was not acted upon, and the matter proceeded ex parte. The Court held the Union was the sole and proper representative of the unionisable employees, and since the Union's demand stood unchallenged, it granted the terminal benefits claimed item by item under L.N. No. 153 of 1998. However, it refused the prayed-for maximum compensation of 12 months for loss of employment, holding the grievants' engagements were for specific periods and specific jobs. Noting that employees' terminal benefits enjoy preferential status in insolvency, the Court ordered the Receiver to pay the grievants within 60 days and directed that a copy of the award be forwarded to the Receiver's counsel for implementation or enforcement.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Union was the proper party to represent the unionisable employees of the Company
  2. 2.Whether the 20 grievants were wrongfully dismissed/declared redundant without payment of terminal dues
  3. 3.What terminal benefits and dues are payable to the grievants under L.N. No. 153 of 1998

Key legal issues

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01

Union's standing to represent the grievants

Holding

The Union, being registered and facing no rival claim to recognition, was the sole and proper representative of the Company's unionisable employees.

Reasoning

Counsel for the Union submitted that it was a registered trade union under the Trade Union Act, Cap. 233, and that although there was no recognition agreement or collective bargaining agreement, it was the rightful representative of the unionisable employees. The Court accepted this, noting no rival trade union claimed recognition or representation.

p. 3
02

Wrongful dismissal/redundancy of the 20 grievants

Holding

The claim stood unchallenged; the Company disregarded the legal provisions of the relevant sectoral order and failed to pay terminal/redundancy dues.

Reasoning

The dispute was heard ex parte as the Company, though notified and served, neither filed a reply statement nor appeared. The Minister's investigator found the grievants were declared redundant between 1999 and 2000, that the relevant sectoral order's provisions were disregarded, and that terminal dues were unpaid. The Union's demand accordingly stood unchallenged and was granted in full.

p. 9
03

Entitlement to compensation for loss of employment

Holding

Compensation (up to 12 months) was refused because the grievants' engagements were for a specific period and specific jobs.

Reasoning

Although the Union prayed for maximum compensation of 12 months for loss of employment, the Court found the grievants' engagements, though permanent in form, were tied to specific periods and specific jobs, disqualifying them from compensation; only the terminal benefits under L.N. No. 153 of 1998 were awarded.

p. 9

Legal principles established

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  • A registered trade union, where no rival union claims recognition or representation, is the sole and proper representative of the unionisable employees of a company
  • In cases of insolvency, salaries, wages and terminal benefits of employees are given preferential treatment in the distribution of the assets of the enterprise

Court orders

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  1. 1.The amounts claimed in the Union's memorandum are granted to the grievants
  2. 2.The Receiver of the Company is ordered to pay the granted amounts to the grievants within sixty (60) days from the date of the award
  3. 3.A copy of the award to be forwarded to the counsel for the Receiver for implementation or enforcement

The bench

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One judgment of the whole court — no separate or dissenting opinions.

CC
majority

Wrote the judgment

JK
majority
OW
majority
Jurisdiction invoked
Section 8 of the Trade Disputes Act, Cap. 234 (reference by the Minister for Labour)

Relief refused

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Compensation for loss of employment (up to 12 months) sought by the Union

The engagements, though permanent, were for a specific period and specific jobs

p. 9

Costs

No costs order was made in the award.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Since the demand by the Union, on behalf of the grievants, stands unchallenged, the amounts hereinabove are granted; and since, in cases of insolvency, salaries or wages or terminal benefits of employees owed are given preferential treatment or status in the distribution of the assets of the enterprise, the Receiver in this case is ORDERED to pay the same to the grievant within sixty (60) days from the date of this award.
p. 9Final orders - payment of terminal dues by the Receiver
The grievants are not, however, entitled to any compensation because it would appear that their engagements, though permanent, were for a specific period and specific jobs.
p. 9Refusal of compensation for loss of employment
In our view the Union, having been registered as such and no rival trade union is claiming recognition or representation, is the sole and proper one to represent the interests of the unionisable employees of the said Company.
p. 3Union's standing to represent unionisable employees
In any case, the said letter did not absolve the Company from filing its reply statement to the Union's memorandum, and no reasons were given for the Company's inability to appear during the hearing of this dispute. The matter was, therefore, heard ex-parte.
p. 2Ex parte hearing despite notice of receivership

Issues in the judgment

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minor

Inconsistencies in the names of grievants between the schedule and the claims list (e.g. 'Nzanzi Malii' vs 'Nyanza Malii'; 'Agness Kanini' vs 'Agned Kanini'; 'Kepher Mbai' vs 'Kephar Mbai'; 'Verginia Waeni Munyao' vs 'Virvinia W. Munyao')

minor

The judgment identifies the presiding officer as 'CP CHEMUTTUT, J' in the coram but signs off as 'CHARLES P. CHEMMUTTUT, MBS., JUDGE.'

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (10)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenya Building, Construction, Timber, Furniture & Allied Industries Employees’ Union v Niazsons (K) Ltd. (Cause 57 of 2006)  (Employment and Labour) [2006] KEIC 2 (KLR)", Case Analysis (2006). Cause 57 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2006/2/eng@2006-09-27

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