[2018] KEELRC 2306 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR

RELATIONS COURT AT MOMBASA

CAUSE NUMBER 118 OF 2016

BETWEEN

UNION OF NATIONAL RESEARCH AND

ALLIED INSTITUTES STAFF OF KENYA (UNRISK)..........................................CLAIMANT

VERSUS

KEMRI-WELLCOME TRUST RESEARCH PROGRAMME..................1ST RESPONDENT

KENYA MEDICAL RESEARCH INSTITUTE (KEMRI).........................2ND RESPONDENT

Rika J

Court Assistant: Benjamin Kombe

Zachariah Achacha, Secretary General for the Claimant

Miss Beatrice Opolo Advocate, instructed by the Federation of Kenya Employers

[FKE], for the Respondents

JUDGMENT

1. The Claimant Union filed its Statement of Claim, on 12th February 2016. The Claimant and the 2nd Respondent signed a Collective Bargaining Agreement (CBA), on 25th August 2014. The CBA covered the period 1st July 2013 to 30th June 2017. Registration of the CBA took place, after Judgment on disputed items was delivered in Industrial Court of Kenya at Nairobi, Cause Number 448 of 2010 (between the Claimant and the 2nd Respondent herein). The 1st Respondent, according to a Report filed by Central Planning and Monitoring Unit, does not have its own CBA with the Claimant, but relies on the CBA between the Claimant and the 2nd Respondent.

2. The Claimant Union states Parties failed to agree on 9 items in their negotiations. In the course of the proceedings they reached settlement on 5 items. Left for the adjudication of the Court are 4 items, namely:-

a) General Wage Increase.

b) Commuter Allowance.

c) Medical Risk Allowance.

d) Gratuity.

3. Central Planning and Monitoring Unit (CPMU) filed its Report on 30th October 2017. The Report was availed to Parties.

4. On 31st October 2017, it was agreed by the Parties that the 4 outstanding items are resolved on the basis of Parties’ Pleadings, Submissions, and Report of the CPMU. They confirmed filing of Submissions, on 11th December 2017.

Claimant’s Submissions:-

5. (a) General Wage Increase

The Claimant submits that according to CPMU Report, the 1st Respondent has 2 annual increments of wages. The first is given in January at 5%, and the other in July at 3. 5%. The Claimant urges the Court to grant all Employees 10% increment annually.

(b) Commuter Allowance

The Claimant adopts table 6 of CPMU Report on commuter allowances. The rate agreed in the CBA between the Claimant and the 2nd Respondent, is Kshs. 3,500 per month for Job Groups MR1 and MR2. The Claimant submits this rate should be adjusted and adopted accordingly with regard to all Employees.

(c) Medical Risk Allowance

The Claimant urges the Court to grant the rates shown at Table 7 of the CPMU Report. These rates are currently being paid by the 2nd Respondent to Claimant’s Members. They ought to apply to all Members working for both Respondents.

(d) Gratuity

The Claimant accepts 1st Respondent’s gratuity rate of 10% of the gross salary.

Respondents’ Submissions:-

6. (a) General Wage Increase

The Respondents submit 1st Respondent grants Claimant’s Members a wage increment of 8. 5% annually. CPMU Report shows Consumer Price Indices of 32. 54% 8. 14% annually. An increment of 8. 14% would suffice.

(b) Commuter Allowance

The Respondents submits 1st Respondent’s Employees are paid consolidated wages. Commuter allowance will be rewarded once wages are reviewed. The current system should be retained.

(c) Medical Risk Allowance

Medical Risk Allowance is a feature of the consolidated wages paid to Employees. The CPMU Report produced a table of this allowance, which is paid by the 2nd Respondent. 2nd Respondent’s system is different from that of the 1st Respondent.

(d) Gratuity

The Respondents submit that the Claimant has agreed to gratuity pegged on 10% of the gross pay.

The Court Finds:-

7. From the Submissions filed by the Parties, gratuity pay is no longer a disputed item. The Respondents shall pay gratuity based on 10% of the gross pay.

8. The disputed items are General Wage Increase, Commuter Allowance, and Medical Risk Allowance. Parties do not also, agree on effective dates.

9. General Wage Increase

The Claimant Union initially demanded 30% wage increment per year. This would translate to 120%, over a period of 4 years. If the demand of 30% wage increment per year is granted, this would result in a total additional wage bill of Kshs. 548,187,305. The CPI rate over the 4 years is 32. 54%, or 8. 14% yearly. If wage increment is based on CPI of 8. 14% yearly, it would result in additional wage bill of Kshs. 108,555,638. The Court notes the Claimant has climbed down to a demand of 10% wage increment per year, over the 4 year period. There is not a significant gap between the CPI rate, and the rate of 8. 5% annually, available to Employees of the 1st Respondent. The Court awards wage increment at 8. 5%, per annum, over a period of 4 years.

10. Commuter Allowance

The 2nd Respondent pays its Employees, who are Members of the Claimant Union, Commuter Allowances shown at Table 6, of CPMU Report. These allowances were made effective from July 2015. The Claimant submits under CBA RCA 225 of 2014 between the Claimant and the 2nd Respondent, Commuter Allowance was set at Kshs. 3,500 monthly for Job Group MR1 and MR2. It was not made clear to the Court why the rate agreed under the CBA, was not implemented. Instead, the different rates appear to have been offered, and accepted, with effect from July 2015. The 1st Respondent submits it pays consolidated wages. Commuter Allowance will be rewarded once wages are reviewed. The Court is not able to discern why Commuter Allowance as paid to the Employees of the 2nd Respondent, should not apply to the Employees of the 1st Respondent. The 1st Respondent has not demonstrated that Commuter Allowance is paid as part of a consolidated package. The Court does not understand 1st Respondent’s submission, that, “Commuter Allowance will be rewarded once wages are reviewed.” It is ordered that Commuter Allowance is paid to Employees of the 1st Respondent, commensurate with the rate payable to Employees of the 2nd Respondent in similar Job Groups.

11. Medical Risk Allowance

The submission of the 1st Respondent with regard to Medical Risk Allowance, is similar to its submission on Commuter Allowance. The 2nd Respondent has in pace this Allowance, as shown in CPMU Report, Table 7. The 1st Respondent submits it pays consolidated wages. Employees working for both Respondents are governed by the same Recognition Agreement, and CBA existing between the Claimant Union and the Respondents. The compensatory regime ought be the same at the two Institutions, to avoid industrial disharmony. During conciliation, it was noted that Employees working under Trust Programme (1st Respondent), enjoyed inferior terms and conditions of service, than those employed by KEMRI (2nd Respondent). There was consensus on need to harmonize allowances. The Conciliator pointed out that existing pay structure, discriminates against 1st Respondent’s Employees and violates Section 5 of the Employment Act 2007. It is ordered that the 1st Respondent shall pay its Employees Medical Risk Allowance, at the same rate applicable to Employees of the 2nd Respondent, in similar Job Groups.

IN SUM, IT IS ORDERED:-

a) General Wage Increment allowed at 8. 5% per annum over a period of 4 years.

b) 1st Respondent shall pay its Employees Commuter Allowance, commensurate with the rate payable to Employees of the 2nd Respondent in similar Job Groups.

c) 1st Respondent shall pay its Employees Medical Risk Allowance, at the same rate applicable to Employees of the 2nd Respondent in similar Job Groups.

d) Gratuity is allowed at 10% of the gross pay.

e) General Wage Increment and Gratuity, shall be effective from 1st July 2013.

f) Commuter Allowance and Medical Risk Allowance shall be effective from July 2015.

g) No order on the costs.

Dated and delivered at Mombasa this 9th day of March 2018.

James Rika

Judge