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ELRCAllowedCause 1460 of 2012· [2012] KEELRC 170 (KLR)

KENYA UNION OF PRINTING, PUBLISHING, PAPER MANUFACTURERS AND ALLIED WORKERS UNION V ANDIKA INSUTRIES LIMITED [2012] KEELRC 170 (KLR)

Industrial Court of Kenya
14 December 2012
1,520 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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A Kenyan court stopped a company's redundancy because it ignored its union agreement's rules on notice, negotiation, selection and severance pay.

What this practically means

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Executive summary

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The Kenya Union of Printing, Publishing, Paper Manufacturers and Allied Workers Union filed a notice of motion dated 21st August 2012 alongside its memorandum of claim, seeking orders restraining Andika Industries Limited from terminating employees on account of redundancy pending determination of the suit. The dispute arose from redundancy notices issued on 13th May 2012 and reissued on 31st July 2012, targeting union members just as the parties were about to conclude their first collective bargaining agreement. The Respondent defended the redundancy on financial grounds, asserting that its two months' notice exceeded the statutory one month. The court framed two issues: whether the intended redundancy was valid, and whether the court should restrain it. Relying on Section 59(2) and (3) of the Labour Relations Act, the court held that the collective agreement with the Kisumu Printers Group, though its stated term had expired, continued to bind the Respondent until replaced by a new agreement. The Respondent was therefore bound to give the union two months' notice, negotiate the redundancies, apply last-in-first-out selection and pay the agreed severance rate. The 31st July 2012 notice, proposing payment only according to statute, was declared null and void. The court also found the timing suspect, an unfair labour practice, and doubted the authenticity of the Respondent's un-audited financial statements. Judgment was entered for the Claimant, restraining the Respondent from declaring the employees redundant pursuant to the impugned notice.

Key legal issues

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01

Validity of redundancy notice issued without compliance with the subsisting collective agreement

Holding

The redundancy notice of 31st July 2012 was invalid and unlawful for failure to comply with the collective agreement, including the 2 months' notice to the union, negotiations over the redundancies, 'last in first out' selection, and severance pay at the agreed rate.

Reasoning

Clause 16 of the collective agreement with the Kisumu Printers Group required 2 months' notice to the union, negotiation of redundancies, last-in-first-out selection and severance pay at the agreed rate. Under Sections 59(2) and (3) of the Labour Relations Act, the expired agreement continued to bind the Respondent until replaced by a new agreement. The Respondent instead proposed to pay only statutory benefits, making the notice invalid.

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02

Whether the timing and circumstances of the redundancy amounted to unfair labour practice

Holding

The timing of the redundancy was suspect and unfair, coming just before conclusion of a first collective agreement and without consultation with the union.

Reasoning

The parties were negotiating a first collective bargaining agreement that was nearly concluded when the redundancy notice was issued. No consultations were held with the Claimant. Had the Respondent been sincere it would have concluded the agreement first or offered to negotiate the redundancy package in good faith. The timing and the intention to replace workers with seasonal or contract employees were unfair labour practices.

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03

Authenticity of the Respondent's financial statements relied on to justify the redundancy

Holding

The un-audited financial statements were doubtful and not authentic, as recurrent monthly expenses such as audit fees, depreciation and insurance were presented as monthly items.

Reasoning

The Claimant doubted the financial statements annexed to the Respondent's replying affidavit. The statements were not audited and thus their authenticity was doubtful. Non-recurrent expenses such as audit fees, amortization, depreciation, insurance, licenses, legal fees, subscriptions and work permit appeared monthly, which a lay observer could see was inconsistent with genuine accounts. Absent explanation, the asserted financial constraint was not credible.

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Legal principles established

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  • A collective agreement that has expired remains binding until replaced by another agreement, and its terms of employment remain in force until changed by a subsequent agreement, per Sections 59(2) and (3) of the Labour Relations Act.

Court orders

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  1. 1.Declaration that the redundancy notice issued by the Respondent on 31st July 2012 is null and void
  2. 2.Judgment for the Claimant restraining the Respondent from declaring the employees redundant pursuant to the notice issued on 31st July 2012
Jurisdiction invoked
Employment and labour relations jurisdiction of the Industrial Court (Labour Relations Act; Employment Act)

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 PRINTING, PUBLISHING, PAPER MANUFACTURERS AND ALLIED WORKERS UNION V ANDIKA INSUTRIES LIMITED [2012] KEELRC 170 (KLR)", Case Analysis (2012). Cause 1460 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/170/eng@2012-12-14

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