Employees in the country’s banking sector have received a salary increment of six percent backdated to March after the Kenya Bankers Association (KBA) and Banking Insurance and Finance Union (BIFU) signed a new collective bargaining agreement (CBA).
The workers’ allowances will meanwhile be raised by 12 percent over two years.
The deal is expected to raise staff costs in the industry by billions of shillings this year, with total payroll expenses approaching the Sh100 billion mark in the year ended December 2018.
Employees covered in the deal include supervisors, clerical staff, technical staff, messengers and drivers.
The agreement was signed by 39 commercial banks including KCB #ticker:KCB, Stanbic #ticker:CFC, Equity #ticker:EQTY, Bank of India and I&M Bank #ticker:I&M.
The annual pay hikes have played a major role in raising overall staff costs in the banking sector despite significant retrenchments in recent years.
The union negotiates salary increases each year and bankers have received the same rate of six percent pay jump in the past three years including in the latest CBA.
“The duration of this agreement shall be for a period of 24 months commencing on March 1, 2019 provided that at any time after November 30, 2000 either party may give to the other at least three months’ notice in writing of its desire for this agreement to continue in force for a further period to be agreed upon,” reads part of the CBA.
The agreement has also set the minimum wages for new employees the banking sector in various job categories.
Clerical staff, for instance, earn a basic salary of at least Sh67,157, technical workers like painters (Sh69,260), head messenger (Sh65,082), drivers (Sh68,716) and chauffeurs (Sh80,428).
Besides the pay hikes contained in the CBA, employers also have the discretion to further raise salaries of certain employees based on performance.