Kenya Union of Sugar Plantation & Allied Workers v Butali Sugar Mills Limited [2021] KEELRC 2022 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT KISUMU

CAUSE NO. 18 OF 2020

KENYA UNION OF SUGAR PLANTATION

& ALLIED WORKERS............................................CLAIMANT

VERSU

BUTALI SUGAR MILLS LIMITED..................RESPONDENT

JUDGMENT

1. The Kenya Union of Sugar Plantation and Allied Workers (the Union) sued Butali Sugar Mills Ltd (the Respondent) on 18 February 2020, and the Issue in Dispute was stated as:

House allowance for mill tractor drivers.

2. The Union and the Respondent have a recognition agreement.  The parties have negotiated and signed collective bargaining agreements, and the last such agreement was from 1 January 2018 to 31 December 2019.

3. During the negotiations for the aforesaid collective bargaining agreement, the parties could not agree on payment of house allowance for mill cane tractor drivers.

4. The trade dispute was taken through conciliation, but the partners could not agree, hence this Cause.

5. The Respondent was of the mind that the drivers were paid a consolidated wage which included house allowance. The drivers are paid on a piece-rate basis.

6. Section 31 of the Employment Act, 2007 provides the irreducible (minimum) as far as employees housing is concerned.

7. As far as housing is concerned, the Act places a statutory burden on the employer to provide housing accommodation to employees at the first instance.

8. Where the employer is unable to provide the housing, then it should pay an allowance to cover rent to the employee.

9. The requirement to provide housing or an allowance to cover rent, in the view of the Court, is a general entitlement to all employees without distinction on type and nature of the contract, save for the exceptions on consolidation and agreement in a collective bargaining agreement as contemplated by section 31(2) of the Employment Act, 2007, or in any other law.

10. In other words, the employer’s statutory obligation to provide housing or pay house allowance does not arise where an employment contract expressly provides for a consolidated salary including an element to cover for rent or where agreement is reached in a collective bargaining agreement.

11. However, apart from the two exceptions, the Court has found 2 other exceptions.

12. One of the exceptions is anchored in a different and primary labour statute, the Labour Institutions Act.

13. Under section 46 of the Labour Institutions Act, the Cabinet Secretary, Labour, is empowered to publish a Wages Order upon advice from the General Wages Council or the Agricultural Wages Council.

14. The Cabinet Secretary, Labour has, pursuant to the power, published the Regulation of Wages (General) Order and numerous Regulation of Wages (Amendment) Orders. Some of the Orders are sector or industry-specific.

15. Under these Orders, daily and hourly rates of wages are deemed to include house allowance.

16. It was not argued or suggested that the mill cane tractor drivers are paid by the hour or on a daily rate.

17. The mill cane tractor drivers herein do not have contracts providing for consolidated salaries.

18. The parties also did not agree in the last collective bargaining agreement on the element of housing.

19. Under the definition of piece work in section 2 of the Employment Act, 2007, piece work is defined to mean any work the pay of which is ascertained by the amount of work performed irrespective of the time occupied in its performance.

20. In the view of the Court, it cannot be that piece work entails payment of a daily or hourly rate. The mill cane tractor drivers are thus entitled at the first instance to housing provided by the Respondent and, if that is not practicable, to an allowance to cover rent.

21. In this respect, this Court departs from the holdings in Mboo Wambua & 29 Ors v Export Trading Co Ltd (2018) eKLR and Wilfred K. Onyango v DHL Excel Supply Chain Kenya Ltd (2017) eKLR and the other cases cited by the Respondent.

22. Employers who place employees on piece rate have an avenue through section 31(3) of the Employment Act, 2007 to be relieved of the burden to provide housing or pay house allowance.

23. The last exception is found in section 31(3) of the Employment Act, 2007. The provision allows the Cabinet Secretary, Labour upon the recommendation of the National Labour Board to exclude a category of employees from the entitlement to housing or house allowance.

24. Since the mill cane tractor drivers do not have contracts providing for consolidated wages as envisaged by section 31(2) of the Employment Act, 2007 and the collective bargaining agreement has also not provided otherwise, it was incumbent upon the Respondent to secure through the Board an order from the Cabinet Secretary, Labour in terms of section 31(3) of the Employment Act, 2007, excluding the application of section 31 to the mill cane tractor drivers.

25. The Respondent did not demonstrate that such an order from the Cabinet Secretary, Labour existed.

26. This Court, therefore, finds that the Respondent’s mill cane tractor drivers are entitled to housing or an allowance to cover rent.

Discrimination

27. The collective bargaining agreement between the parties herein was mutually negotiated, and it omitted to agree on the case of mill cane tractor drivers.

28. In the circumstances, the Court is unable to agree to the proposition by the Union that the clause on house allowance is discriminatory against the drivers.

Conclusion and Orders

29. In light of the above, the Court finds and declares that:

(i) A declaration be and is hereby issued that the action of the Respondent not to pay house allowance to mill cane tractor drivers offends section 31(1), (2) & (3) of the Employment Act, 2007.

(ii) An order be and is hereby issued commanding the Respondent to start paying the mill cane tractor drivers house allowance from March 2021.

30. The parties have an on-going social partnership. Each party to bear their own costs.

Delivered through Microsoft teams, dated and signed in Kisumu on this 10th day of March 2021.

Radido Stephen, MCIArb

Judge

Appearances

For the Union                                   Mr Lincoln Isagi, Industrial Relations Officer

For the Respondent                          Mr Mbeka instructed by L.G. Menezes & Co. Advocate

Court Assistant                                 Chrispo Aura