Automated Summary
Key Facts
The court ordered a general wage increase of 10% in the first year and 5.2% in the second year for all employee cadres, based on the Consumer Price Index (CPI) and Central Planning and Monitoring Unit (CPMU) analysis. The Collective Bargaining Agreement (CBA) was set to last 2 years and become effective from its registration date, with parties required to finalize and register it within 21 days. The respondent had proposed higher increments (15%/12%/10% year one; 13%/10%/9% year two) conditional on achieving Kshs.11,000,000 monthly revenue, while the claimant sought 11% and 9.5% average annual increases.
Issues
- What is the appropriate general wage increase for employees over two years, considering the CPMU's CPI analysis (13.2% over two years) and the company's revenue conditions (Kshs.11,000,000.00 monthly requirement)? The court adjusted the CPI by 2% to 15.2% and ordered 10% in year one and 5.2% in year two for all employee cadres.
- What is the duration and effective date of the CBA, given the lack of specific legal provisions and customary practices in the jurisdiction? The court adopted a two-year duration (customary practice) and set the effective date to the registration date per Section 59(5) of the Labour Relations Act, 2007.
Holdings
- The court determined the Collective Bargaining Agreement (CBA) duration to be 2 years, aligning with customary practice in Kenya, and specified the effective date as the registration date of the CBA. Parties were ordered to finalize and register the CBA within 21 days.
- The court awarded a general wage increase of 10% in the first year and 5.2% in the second year for all employee cadres, adjusting the Consumer Price Index (CPI) by 2% to account for the CBA's futuristic application. This decision was based on the CPMU's analysis of CPI and the need for fairness in the dispute.
Remedies
- The court ordered a general wage increase of 10% in the first year and 5.2% in the second year of the CBA for all employee cadres, adjusted from the CPMU's CPI-based recommendation to account for backdating implications.
- The court directed that the CBA's effective date shall be the date of its registration by the Industrial Court, as mandated by Section 59(5) of the Labour Relations Act, 2007.
- The court established the CBA duration as 2 years, aligning with customary practice in the jurisdiction to facilitate negotiations and renewal.
- The court ordered that the parties shall bear their respective costs for the application, as outlined in the final determination.
Legal Principles
The court emphasized the obligation of parties to negotiate in good faith under Labour Relations principles, noting that referring disputes to court undermines amicable resolution. It applied the Labour Relations Act, 2007, to enforce the effective date of the Collective Bargaining Agreement (CBA) as the registration date and mandated a 2-year duration based on customary practice. The ruling also adjusted wage increments to align with the Consumer Price Index (CPI) using a purposive approach to ensure fairness.
Cited Statute
Labour Relations Act, 2007
Judge Name
D.K.Njagi Marete
Passage Text
- That the duration of the CBA be and is hereby set at 2 years. That the effective date of the CBA be the date of registration of the same.
- It is however noted that the analysis by the CPMU took into account and applied to the last two (2) years, the intended period and duration of the CBA which was to run from 1st July, 2018 to 30th June, 2020. This time is spent and the CBA can only be futuristic. It cannot be backdated. It is therefore behoves the court to engineer sense and fairness to the CBA by raising the CPI by two percentum,(2%) The working CPI now becomes 15.2% and the court orders an increment of 10% in the first year and 5.2% in the second year, this applicable to all cadres of employment.