Surge in inflation increases industrial disputes

A surge in the cost of living last year raised the number of labour disputes filed in court by 37 per cent, contributing to loss of man-hours and driving up employers’ spending on legal fees and salaries.

The number of Industrial Court disputes filed last year increased to 2,240 from 1,630 in 2010, resulting in a loss of 1.5 million man-hours.
An estimated 47,754 workers were involved in strikes, according to data from the Federation of Kenya Employers (FKE).

The strikes in the private sector were mainly in the agricultural sector especially in the floriculture, sugar, transport and aviation industries.

“2011 was not business as usual due to high fuel prices, increase in commodity prices and high inflation rates,” said Jacqueline Mugo, the executive director FKE at the employers’ annual general meeting.

“The shilling plummeted against all major currencies in the midst of spiralling inflation, and companies ended up spending more of their resources and time on litigations,” she added.
The highest proportion of cases were trade disputes between employees and their employers which totalled 2,150.

Another 45 cases involved employers refusing to recognise trade union agreements, while 11 were appeals against decisions of the registrar of trade unions.

The inflation rate surged to a peak of 19.72 per cent last year, prompting Labour minister John Munyes to increase minimum wages by 12.5 per cent. The rate has since eased to 15.61 per cent last month.

Labour disputes have been on the rise since 2008— when the global financial crisis dealt a blow to Kenya’s economic growth, which peaked at 7.1 per cent in 2007.

In 2009, the number of industrial disputes rose by three times to 851 from 226 cases in 2008. Last year’s surge in court cases was also partly the result of the transfer of all labour and employment cases to the Industrial Court from the High Court, following the enactment of the new labour laws and the Constitution.

About 26 cases were transferred from the High Court to the Industrial Court. The five Judges of the Industrial Court made a total of 894 rulings and awards.

These included resolution of cases filed in 2010 and previous years. Some courts had accumulated a large number of pending cases, some dating back to 2007.

“The Industrial Court was intended for speedy resolution of employment disputes and the delay was hurting industrial peace,” read an FKE report.

Attorney General Githu Muigai said the government will recruit Industrial Court judges to handle the rising number of labour disputes.

“We will announce recruitment of judges for the Industrial Court in two weeks time,” said Mr Muigai. The government plans to hire 67 more judges.

The action taken by the chief justice to designate senior resident magistrate courts in the 47 counties to handle some cases is expected to ease the backlog in the industrial court.