Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers v Kenyatta National Hospital (Cause 1539 of 2010) (Employment and Labour) [2012] KEIC 35 (KLR)
The bottom line
#Kenya's Industrial Court awarded KNH union workers a 46% salary increase and higher house allowances for 2009-2011, rejecting the hospital's claim that government circulars excused it from paying.
What this practically means
#Executive summary
#Key legal issues
#Whether the claim for salary and allowance increments was deserving
Yes - the employees deserved increments given the admitted entitlement, the rise in cost of living, housing and transport costs, and international and municipal law guaranteeing just and favourable remuneration
The court noted that the Respondent's counsel admitted the employees deserved an increment. The EPD Report confirmed that the cost of living, housing and transport had increased during the CBA period. The court also invoked the international and municipal law principle that an employee has a right to just and favourable remuneration ensuring an existence worthy of human dignity. On a balance of probability the demand was warranted.
The applicable rate of salary increase
Total salary review of 46% for the two-year CBA period (23% per year), combining CPI compensation of 17.3% per year, 5.7% for productivity, informed by the wage differential concept
The court assessed compensation for inflation using CPI (34.6% over two years), accepted the unchallenged averment of a 48% productivity improvement of which the employees were entitled to a half-share, and noted a 73% wage differential gap exceeding the 50% permitted under the Wage Guidelines. Exercising discretion with regard to socio-political and economic factors, the court fixed 23% per year, totalling 46%.
Whether the Respondent's financial deficit and Government circulars barring salary reviews were compelling reasons to withhold the increment
No - the Respondent, as a Body Corporate, is responsible for its own budgeting and seeking exchequer approval; the circulars did not extinguish accrued rights
The court found that the Respondent is a State Corporation with the status of a Body Corporate under Legal Notice No.109 of 1987, able to incur obligations independently of the State. Nothing was shown that budget proposals were made with the Claimant's demands in mind or that the exchequer was put on notice. The rights accrued before the circulars, and withholding the award risked industrial unrest in an essential services hospital.
Legal principles established
#- A State Corporation established as a Body Corporate has the capacity and responsibility to negotiate its employees' terms and to seek budget approvals independently of the exchequer.
- Employees' accrued rights to salary review cannot be defeated by circulars issued after the rights accrued.
- An employer's financial deficit alone is not a compelling reason to withhold salary increments where the employer has not demonstrated efforts to secure budgetary approval.
Court orders
#- 1.Salary Increament of 46% for the period of 1st July 2009 – 30th June, 2011 CBA
- 2.House Allowance increament of 23% for the period 1st July 2009 – 30th June 2011, putting the lowest house allowance at Kshs.5,289/-
- 3.Leave Traveling Allowance increament of Kshs.2,000, 1,500, and 1,000/- to Job Groups K.17-11; K.10-9 and K.8 respectively
- 4.Commuter Allowance to remain as per the government scheme of between Kshs.3,000 – 8,000 per month until the next CBA after the one under review
- 5.Parties directed to conclude and sign the Collective Bargaging Agreement for 1st July 2009 – 30th June 2011 within forty five (45) days of the judgment incorporating the awarded salary and allowances
- Jurisdiction invoked
- Industrial Court Act and Article 162(2)(a) of the Constitution of Kenya
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers v Kenyatta National Hospital (Cause 1539 of 2010) (Employment and Labour) [2012] KEIC 35 (KLR)", Case Analysis (2012). Cause No 1539 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2012/35/eng@2012-09-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.