Banking, Insurance & Finance Union [Kenya] v Harambee Sacco Society Limited (Cause E122 of 2024) [2025] KEELRC 194 (KLR)
The bottom line
#Kenya's Employment Court awarded workers 4% annual wage increases from 2023 and blocked an employer's attempt to replace their one-month salary leave allowance with a flat Kshs. 15,000.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.What general wage increment should apply for the CBA period 1st January 2023 to 31st December 2026 - Claimant's 10% per year or Respondent's 1% (2% in the 4th year) per year?
- 2.Whether the Respondent's proposal to replace the annual leave allowance of 1-month basic salary with a standardized Kshs. 15,000 across the board is justified
Key legal issues
#Annual leave allowance - whether the Respondent could replace 1-month basic salary with Kshs. 15,000 across the board
The proposal was unjustified and would infringe Sections 10para 3 and 26 of the Employment Act; Clause 17[b] of the outgoing CBA is preserved
The Respondent's financial position was assessed as stable and nothing had changed or was projected to change to justify standardizing the allowance. Unionisable staff occupy different job grades with different basic salaries and differing years of service; a flat allowance would be distortive and would infringe the Employment Act.
General wage increment for the 2023-2026 CBA period
Awarded at 4.0% per year (2.5% on CPI and 1.5% on productivity) effective 1st January 2023
Using the CPPMD expert report, the Court took the New Kenya CPI of 28.99 translating to 7.5% annual cost-of-living compensation, but noted that clause 34 of the outgoing CBA already grants a 5% annual salary increment (COLA) cushioning members against CPI rise. Productivity was 20.6% in 2022. Balancing these against the Respondent's ability to pay, the Court awarded 4% per year.
Role of wage guidelines and Article 43 of the Constitution in wage determination
Wage guideline 1 obliges the Court to protect minimum standards of living and prevent 'starvation wages', anchored in Article 43 economic and social rights
The guideline requires the Court to guarantee workers an existence worthy of human dignity while delicately balancing wage increments with the employer's ability to pay. Guideline 2 makes productivity a major compensatory factor, entitling workers to a share of the wealth they help create.
Legal principles established
#- An employer seeking to shift an existing CBA benefit must justify the change; a standardized leave allowance irrespective of grade distorts differential remuneration
- Wage guidelines bind the Court to protect a minimum standard of living and an existence worthy of human dignity, balancing increments with the employer's ability to pay
Court orders
#- 1.General Wage Increment is awarded at 4.0% for each of the 4 years, beginning 1st January 2023
- 2.Clause 17[b] of the outgoing CBA is preserved, with annual leave allowance to continue being paid at the rate of equivalent of 1-month basic salary
- 3.No order on the costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Dispute on collective bargaining subjects referred to the Court after conciliation before the Ministry of Labour under the Labour Relations Act; wage guidelines with anchorage in Article 43 of the Constitution applied
Relief refused
#Claimant's demand for 10% wage increment for each of the 4 years
The Court balanced cost-of-living (CPI) and productivity factors and awarded 4% per year instead, noting the existing CBA clause 34 already grants a 5% annual salary increment cushioning members against CPI rise
Respondent's counter-offer of 1% increment per year
The Court did not adopt the Respondent's offer, awarding 4% based on CPI and productivity considerations
Costs
No order on the costs
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.
General Wage Increment is awarded at 4.0 % for each of the 4 years, beginning 1st January 2023.
Clause 17 [b] of the outgoing CBA is preserved, with annual leave allowance to continue being paid, at the rate of equivalent of 1-month basic salary.
The Respondent has not justified its proposal for a shift in the payable annual leave allowance.
It is the role of the Court under the guidelines to ensure that Employees are not paid what historically, has been pejoratively described as 'starvation wages,' while delicately balancing wage increment, with the Employer's ability to pay.
No order on the costs.
Issues in the judgment
#The Claimant's demand appears inconsistently pleaded: the wage increment table lists two consecutive entries for 1st January 2024 and none for 2025
Inconsistency between the Claimant's pleaded 10% demand and the 2% per year demand recorded in the CPPMD expert report, which the Claimant attributed to error in the Report
Productivity figures differ between the Claimant's submission (29.9%) and the CPPMD finding (20.6%)
The names of the parties are not stated in the judgment text
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Banking, Insurance & Finance Union [Kenya] v Harambee Sacco Society Limited (Cause E122 of 2024) [2025] KEELRC 194 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/194/eng@2025-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.