Kenya Building Construction Timber & Furniture Employees Union v Creative Joiners Limited (Cause 674 of 2017) [2024] KEELRC 216 (KLR)
The bottom line
#Kenya's Employment Court ordered a company and union to negotiate their stalled CBA within 45 days, or workers automatically get 7% annual increases.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Claimant union is entitled to the reliefs sought (compulsion to negotiate the outstanding CBA clauses, or adoption of its 14%/25% proposals and an order to sign the CBA)
Key legal issues
#Whether the court can compel a party to negotiate or dictate the terms of a CBA
The court will not descend into the arena of CBA negotiations or set CBA terms; collective bargaining is voluntary and founded on autonomy of the parties. However, having recognised the union and concluded a prior CBA, the parties must negotiate in good faith, and the court may accord them time to do so with a fallback award.
Relying on Court of Appeal authority in Teachers Service Commission v KNUT and Amalgamated Union of Kenya Metal Workers v Vehicles Manufacturers Ltd, the court held that collective bargaining is neither compulsory nor automatic and the court has no business setting CBA terms. Yet Section 57(1) of the Labour Relations Act obliges a recognising employer to conclude CBAs in good faith. Balancing these, the court declined to adopt the union's figures outright but granted 45 days to negotiate, with a 7% fallback award.
Whether the Claimant's 14% salary and 25% housing allowance proposals should be adopted
Refused; wage increases must be guided by economic and financial considerations including productivity, cost of living (CPI) and ability to pay, and the evidence did not establish the Respondent could sustainably afford the proposal
The CPPMD report showed declining revenues and profitability, CPI rise of about 14% over the period, and no guidance on affordability of the union's proposal. The union adduced no expert evidence to support its figures, and the Respondent did not controvert the report. Guided by Kenya Tea Growers, Leather Life EPZ and Kenya Ferry Services, the court held that decreed wages must be affordable and sustainable, and instead granted a fallback 7% annual increment should negotiation fail.
Legal principles established
#- Employers who have recognised a trade union are obliged to conclude CBAs with the union in good faith and transparently
- A collective agreement is a contract enforceable by or against the parties, founded on consensus ad idem, and the court as a general rule has no role in its negotiation
- A court faced with a question of wage increment ought to take into account productivity, cost of living and the ability to pay by the employer
Court orders
#- 1.Parties are accorded 45 days to negotiate the outstanding clauses of the CBA for 2015 to 2017
- 2.Failing negotiation within 45 days, members of the Claimant are awarded salary and house allowance increment of 7% respectively annually for the period 2015 to 2017
- 3.Costs of the suit awarded to the Claimant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Article 159(2)(d) and Article 48 of the Constitution (delivery); Labour Relations Act, 2007 (substantive dispute)
Relief refused
#Adoption of the Claimant's proposal of 14% salary and 25% housing allowance increments and an order compelling the Respondent to sign the new CBA
The court cannot substitute its preference for the parties' freedom to agree; wage awards must be guided by productivity, cost of living and ability to pay, and the evidence did not establish sustainable affordability
Costs
Costs of this suit are awarded to the Claimant.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Consequently, parties are accorded 45 days to negotiate any outstanding clauses of the CBA for 2015 to 2017, failing which members of the Claimant are awarded salary and house allowance increment of 7% respectively annually for the period 2015 to 2017.
Costs of this suit are awarded to the Claimant.
Section 57(1) of the Act makes it obligatory for employers and/or employer’s organizations that have recognized a trade union to conclude CBAs with such unions and do so in good faith and in a transparent manner.
If the labour court fixes basic salary in a collective agreement as the labour court did in this case, the collective agreement ceases to be a collective agreement as envisaged by the law.
Issues in the judgment
#Internal inconsistency in wage bill figures: paragraph 18 states the unionisable wage bill rose from Kshs.2.54 million in 2021 to Kshs.4.35 million in 2022, while paragraph 54 states it rose from Kshs.2.51 million in 2018 to Kshs.4.35 million in 2022, with different base years
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Building Construction Timber & Furniture Employees Union v Creative Joiners Limited (Cause 674 of 2017) [2024] KEELRC 216 (KLR)", Case Analysis (2024). Not stated in judgment (Memorandum of Claim filed 10th April 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/216/eng@2024-02-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.