Firm failed to implement a pay deal to contract employees
East African Portland Cement's #ticker:EAPCC properties are set to be auctioned to recover Sh1.4 billion owed to workers following the firm’s failure to fully implement a collective bargaining agreement (CBA).
The Kenya Chemical and Allied Workers Union (Kcawu) has already obtained the services of an auctioneer, who will start attaching EAPCC property upon expiry of the notice.
The auctioneer will be seeking to recover Sh1,401,585,364, which is the amount being claimed by more than 400 workers covered in the 2013–2015 CBA.
The said CBA was the subject of a dispute before the Labour Court and the Court of Appeal. EAPCC was aggrieved that the court had directed it to increase wages for contract employees.
Court of Appeal judges GBM Kariuki, Fatuma Sichale and Sankale ole Kantai, held that upon the contract staff who were not part of management becoming members of Kcawu on payment of union dues, they were entitled to benefit from the negotiated CBA.
“It did not therefore matter whether EAPCC explicitly stated the full category of workers covered by the negotiations so long as it was understood that the negotiations covered union members of that particular cadre unless the contract staff were expressly excluded in the CBA,” said the appellate judges.
The appellate judges added that EAPCC’s argument that there were separate negotiations for non-management workers, some of whom were on contract and others not, does not hold sway and must fail.
Labour Court Judge Hellen Wasilwa had earlier ruled that payment of trade union dues is what makes an employee a member of a trade union.
“It is clear that members paying trade union dues are members of the union and therefore covered by the CBA negotiated whether permanently employed or on contract,” Justice Wasilwa.
The manufacturer of Blue Triangle cement brand had conceded that the dues paid to staff on contract are different from that paid to staff who are permanent employees though unionisable.
The reason EAPCC advanced for this was that putting the wages on the same level is unsustainable and if implemented it would require Sh71.3 million per month which funds are not available.
The firm added that this can lead to redundancies being undertaken, which can lead to loss of employment of over 632 contract staff.
Justice Wasilwa, however, said that by conceding that they are paying staff on contract less than those on permanent basis, EAPCC have breached the terms of the CBA.
EAPCC and Kcawu have negotiated CBAs since 1961. However, the contract employees were not covered by the CBA until 2011.