Amalgamated Union of Kenya Metal Workers v Rallytec Motors (Cause E034 of 2025) [2026] KEELRC 134 (KLR) (27 January 2026) (Judgment)

Amalgamated Union of Kenya Metal Workers v Rallytec Motors (Cause E034 of 2025) [2026] KEELRC 134 (KLR) (27 January 2026) (Judgment) Neutral citation: [2026] KEELRC 134 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Kisumu Cause E034 of 2025 Nzioki wa Makau, J January 27, 2026 Between Amalgamated Union of Kenya Metal Workers Claimant and Rallytec Motors Respondent Judgment 1.The Claimant instituted this suit by way of a memorandum of claim dated 9th May 2025 and filed in court on 12th May 2025. The dispute arises from the Respondent’s alleged refusal to pay salary, wages, and house allowance arrears accruing from increments provided for under a Collective Bargaining Agreement (CBA). The Claimant contends that pursuant to a CBA executed between the parties on 8th June 2023, employees were entitled to a 6% salary and wage increment for each year covered by the agreement. 2.According to the Claimant, the Respondent honoured the increments for only five months before discontinuing payment, thereby leaving arrears outstanding for a period of 31 months up to May 2025. It further asserts that despite several attempts to resolve the matter amicably, including meetings, conciliation proceedings, and an agreement reached at the Ministry of Labour in which the Respondent committed to clear the arrears by June 2024, the Respondent has persisted in non-payment. The Claimant further avers that, notwithstanding a circular issued by the Respondent dated 4th July 2024, in which it promised to pay Kshs. 40,000/- in that month and to clear the outstanding balance within two months, no payment has been made. It contends that the CBA, which covered the period between 1st January 2022 and 31st December 2023, has since expired, and that the Respondent has declined to negotiate a new agreement, citing the outstanding arrears as the reason. 3.On the basis of the foregoing, the Claimant contends that the Respondent’s conduct contravenes section 17(1) of the [Employment Act](/akn/ke/act/2007/11) on the payment of wages, as read together with section 17(10)(a), which criminalises non-compliance with the said provision. The Claimant further maintains that this Court is properly seized of jurisdiction pursuant to Article 162(2)(a) of [the Constitution](/akn/ke/act/2010/constitution), section 74 of the [Labour Relations Act](/akn/ke/act/2007/14), section 12(3) of the [Employment and Labour Relations Court Act](/akn/ke/act/2011/20), 2011, and Rule 17(5) of the Employment and Labour Relations Court (Procedure) Rules, 2016. 4.Consequently, the Claimant seeks the following reliefs:a.A finding that the Respondent’s refusal to pay full salary and accrued arrears, while making repeated promises, constitutes a breach of section 17 of the [Employment Act](/akn/ke/act/2007/11);b.Adoption by the Court of the Claimant’s computations as presented;c.An order directing payment of the outstanding sums within seven (7) days from the date of judgment;d.Compensation equivalent to 12 months’ salary together with interest at court rates for exposing the grievant employees to pecuniary embarrassment for three years;e.Costs of the suit; andf.Any other relief the court the court may deem fit. 5.Despite service of summons, the Respondent neither entered appearance nor filed a defence, and the matter therefore proceeded as an undefended claim. 6.In support of its case, the Claimant called one witness, Mr. Nickson Owino, who testified that under the CBA effective from 1st January 2022 there was a 6% increment in salaries and house allowances in the first year, followed by a further 6% increment in the second year, as provided under clauses 31 and 32 of the CBA. He stated that the Respondent had paid a total sum of Kshs. 196,042/-, leaving an outstanding balance of Kshs. 1,895,010/-. He further testified that the Claimant had experienced considerable difficulty in securing payment, even after conciliation. 7.At the close of hearing, the Claimant filed written submissions. Claimant’s Submissions 8.In its submissions, the Claimant reiterated that clause 31 of the CBA provided for a 6% salary increment for the year 2022 and a further 6% increment for the year 2023, while clause 32 provided for a house allowance of Kshs. 2,700/- or 19% of the basic wage, whichever was higher. It submitted that out of a total entitlement of Kshs. 2,091,052/- the Respondent had only paid Kshs. 196,042/-, leaving an unpaid balance of Kshs. 1,895,010/-. 9.The Claimant further submitted that the outstanding balance amounted to underpayment contrary to section 17(1) of the [Employment Act](/akn/ke/act/2007/11), which is criminalised under section 17(10)(a) of the same Act. He also placed reliance on the provisions of section 18 of the [Employment Act](/akn/ke/act/2007/11) for the proposition that salary must be paid when it falls due, meaning that the Respondent was in arrears. On that basis, it urged the Court to allow the claim as prayed. Disposition 10.The claim as apprehended by the Court is the refusal to pay increments to employees as required under the CBA negotiated between the parties. The non-payment of wages as and when they fall due is criminal. The Court finds and holds that the Respondent’s conduct in refusing to honour the terms of the CBA contravened section 17(1) of the [Employment Act](/akn/ke/act/2007/11) on the payment of wages, as read together with section 17(10)(a) of the [Employment Act](/akn/ke/act/2007/11). As the conduct of the Respondent was criminal since section 17(10)(a) criminalises non-compliance with the said provision, there will be consequences for the employer. 11.The Union alleges the Respondent has declined to negotiate the CBA. The Court orders the Respondent and the Claimant to enter into negotiations in terms of section 57 of the [Labour Relations Act](/akn/ke/act/2007/14) and upon conclusion of the negotiations present the negotiated CBA to the Employment and Labour Relations Court at Nairobi for registration. The Claimant and the Respondent to note that the economic analysis and input of the Central Planning and Monitoring Unit of the Ministry of Labour shall be required for the negotiations to be meaningful as parameters have somewhat changed with the economic times. 12.The Court notes that the Union seeks the sum in the tune of Kshs. 1,895,010/- which is the balance unpaid in terms of wages under the CBA which has since expired. Non-payment of wages is a repudiation of a contract by an employer. Such a breach when properly articulated would lead a court to the inevitable conclusion that damages or compensation are payable. Unfortunately, the Union did not tabulate the employees and their individual dues out of this unpaid sum to allow the Court to grant the relief of compensation for breach of contract for the unpaid wages. In such a claim, I would have expected a schedule indicating the names of employees and the amounts each Grievant would be entitled to. As a consequence of the paucity of particulars for each Grievant, the Court declines to grant the prayer for payment of compensation. In regard to the arrears owed to the employees, the Court cannot order a blanket sum to be paid to the Union without a list of Greivants. Instead of ordering the payment to the Union, the Court orders the Respondent to deposit within 21 days the sum of Kshs. 1,895,010/- into the Judiciary Account pending the supply of a list of beneficiaries by the Union to permit the Court to order release of the cash to the employees. 13.Under section 17(10)(a) an employer who declines to pay the employees the wages when they fall due is liable upon conviction to pay a fine. In that regard, the Court directs the Labour Officer in the Region to present the employer Rallytec Motors Limited of Makasembo Road in the Industrial Area of Kisumu with a demand for payment of Kshs. 100,000/- for failure to comply with the law on payment of wages. 14.The final result is that judgment is entered against the Respondent fora.The sum of Kshs. 1,895,010/- to be deposited to Court within 21 days of the judgment.b.The Respondent to be served with a charge for non-payment of employee wages contrary to section 17(10)(a) of the [Employment Act](/akn/ke/act/2007/11).c.The Claimant Union is entitled to costs of the suit.d.Interest at court rates on the sum in (a) above upon expiry of the 21 days should the Respondent decline to deposit the sum within the 21 days as ordered by Court.Orders accordingly. **DATED AND DELIVERED AT KISUMU THIS 27****TH****DAY OF JANUARY 2026****NZIOKI WA MAKAU, MCIARB.****JUDGE**