Fashion retailer Jade Collections faces a higher wage bill after the Industrial Court made a ruling compelling the firm to allow its workers to join a trade union.
Judge Hellen Wasilwa ordered Jade Collections to allow its employees to join a labour union after a majority of the retailer’s workers voted in favour of joining the Kenya Union of Commercial, Food and Allied Workers (Kucfaw).
Jade Collections employee costs are expected to rise as unionised staff have to be paid minimum wages and enjoy other benefits such as day offs, paid leave, overtime pay, lunch break, house allowance and paid sick leave.
“It is the court’s finding that as at when the application and claim was filed, the claimant (union) had recruited a simple majority of respondent’s unionisable employees and as per the Labour Relations Act, they should be recognised by the respondent (Jade Collections),” said Lady Justice Wasilwa in a judgment dated January 18, 2017.
“The respondents (Jade Collections) are further prohibited from victimising and harassing any employee on account of their union membership,” ordered the judge.
Jade Collections was also ordered to meet the costs of the suit.
Employees have the right to join a workers union as provided for in Article 41 of the Constitution of Kenya and denying workers such as right is in breach of their civil liberties, the court said.
As at April 2013, Kucfaw had enlisted 31 out of Jade Collection’s 51 unionisable employees, court papers show. The union moved to court in 2014 after Jade Collections declined to recognise the trade union, and suspended 17 staff members who had opted to join Kucfaw.
“The respondents refused to grant audience to the claimant to discuss and sign recognition agreement,” the union said in court filings.
Twelve of the suspended staff moved to court to contest their sacking and were awarded a total of Sh2.77 million in damages in November 2015.
Jade Collections now joins other retailers that have recently been compelled to allow workers join Kucfaw, including Choppies-owned Ukwala, and Eldomatt Supermarket.
Kucfaw is currently locked in a court battle seeking to compel Kenya’s third largest retailer Naivas to allow its workers to be members of the union.
The labour union already represents staff at retailers such as Nakumatt, Uchumi, Tuskys, and Chandarana supermarkets.
Jade Collections is owned by Bernice Mburu and opened its first store on Nairobi’s Tom Mboya Street in 2011 and has now expanded to set up shop a second one in the capital on Haile Selassie Avenue, and stores in Thika and Eldoret.
The new wage bill headache is likely to slow down Jade Collections’ expansion plans, which include quadrupling the number of stores, setting a clothing factory and a fashion academy.
Ms Mburu in an earlier interview said she plans to open 12 new branches by 2020.
Jade Collections has already acquired five acres of land in Thika to set up a factory, warehouse and distribution centre, she disclosed.
The family-owned business has also purchased a three-acre piece of land in Lukenya to build a fashion and design school.