COLLECTIVE BARGAINING AGREEMENT BETWEEN THE MOTOR TRADE AND ALLIED INDUSTRIES EMPLOYERS ASSOCIATION (HEREINAFTER REFERRED TO AS THE ASSOCIATION) AND THE AMALGAMATED UNION OF KENYA METAL WORKERS (HEREINAFTER REFERRED TO AS THE UNION)

(1ST JULY, 2014 - 30TH JUNE, 2016)

SECTION A

Memorandum of Agreement between the Motor Trade and Allied Industries Employers Association and the Amalgamated Union of Kenya Metal Workers on Matters Governing Recognition.

1. PREAMBLE

The parties to this Agreement, meeting together in free and voluntary association, have determined to regulate the relations between them in the interest of the promotion of sound industrial relations, the economic well-being of the Motor and Allied Industries, its workers and Management. In order to achieve these aims they agreed to provide:-

(a) Machinery for the speedy settlement of Industrial disputes.

(b) A channel of communications between the member Companies and their employees.

(c) Collective bargaining machinery for negotiations on an Industry basis for those terms and conditions of service as listed in Appendix 'A' of this Agreement for those employees listed in Appendix 'B' of this Agreement.

2. PARTIES TO THE AGREEMENT

The Member companies of the Motor Trade and Allied Industries Employers' Association listed in Appendix 'B' including any Companies which subsequently join the Association, and the Amalgamated Union of Kenya Metal Workers. Any member of the Association who withdraws membership shall be bound by this Collective Bargaining Agreement up to the expiry date.

3. RECOGNITION

The Association accords full recognition to the Amalgamated Union of Kenya Metal Workers as the sole labour organisation representing those employees listed in Appendix 'B' of this Agreement for such matters as are listed in Appendix 'A' of this Agreement provided that, and for so long as, the Union continues to be fully representative of these categories of employees in the member Companies concerned.

4. GUARANTEES

(a) The parties to this Agreement guarantee that representatives of both sides shall discharge their duties in an independent manner without fear that their individual relations with the Member Companies or the Union will be affected in any way by any action taken by them in good faith while acting as a representative.

(b) The Association undertakes not to victimise or intimidate any employee or employees for being a member or members of the Union.

(c) the Union also undertakes that it shall not intimidate any employee or employees for not being a Member or Members of the Union.

(d) Whilst recognising that the question of Union membership is entirely a matter of individual choice, the Association nevertheless accepts that in the interests of maintaining the required standard of organization, Union Membership for such employees as are covered by this Agreement should be maintained at the highest level.

(e) The Association undertakes not to interfere with the normal affairs of the Union in any manner whatsoever.

(f) The Union undertakes that employees who are Union representatives will carry out the duties delegated to them by the Management during working hours and such representatives will not leave their place of work for any purpose in connection with their duties as Union representatives without first obtaining the permission of management, which permission shall no be unreasonably withheld.

(g) In the event of a dispute between the Union and the Association or between the Union and a Member of the Association which cannot be settled in accordance with the procedures set out in Section C to this Agreement, it is accepted that the Union may, after giving the Association 21 days written notice, call out on strike employees of Association Members, provided that all existing machinery for the settlement of such dispute has been fully exhausted.

(h) Prior to and during the period of strike notice, the Association will use its best endeavours to assist in the settlement of such a dispute.

(i) In the event of a strike or other action leading to a stoppage of work, security and sanitary staff will continue to perform their normal duties, in the interest of both parties to this Agreement, and the Union agrees that it will use its influence to achieve this end. If such employees, being unionisable, are required by the employer to undertake duties other than their normal functions, the Union reserves the right to withdraw their service.

(j) The Association and the Union both undertake to advise the other party of the names of their respective officers and officials as and when elected and/or appointed.

(k) The Association undertakes to afford such facilities as are mutually agreed as being necessary for such officials and Representatives of the Union to carry out their duties at their place of work.

(l) Nothing in this Agreement should deprive any employee of his right to approach Management on any personal claim or grievance which he may have.

(m) All agreement jointly reached between the Association or its Members, and the Union, or its Representatives, through the medium of negotiating machinery or otherwise shall be committed in writing and signed by representatives of both parties.

(n) The Association and the Union undertake to ensure that their Members fully comply with the terms of this Agreement and the grievance and negotiating procedure set out herein and to take all possible steps to bring to an end as speedily as possible any action taken by their Members at variance with the terms of this Agreement or any other negotiated collective agreement.

5. DURATION OF AGREEMENT

(i) This Agreement may be terminated by either party on giving to the other three weeks' notice in writing of its intention to terminate.

(ii) In the event of either party to this Agreement wishing to vary the provisions of the Agreement or the Appendices hereto, twenty-one days' written notice of such intention shall be given to either party. Any such variance shall not, however, become operative unless it has been approved by both parties in Joint Industrial Council.

(iii) While this Agreement remains in force, the observance of its conditions constitutes the only justification for the continued recognition of the Union by the Association.

RECOGNITION AGREEMENT

APPENDIX "A"

1. Rates of Pay, Overtime and Allowance

2. Hours of Work

3. Methods of Wages Payment

4. Leave

5. Duration and Termination of Contract

6. Principles of Redundancy

7. Medical Expenses and Sick Pay

8. Retirement Benefits

RECOGNITION AGREEMENT

APPENDIX "B"

UNIONISABLE EMPLOYEES

All categories of employees of Member Companies of the Association engaged in employment directly connected with the Motor Trade and its allied industries in Kenya, except the following categories:-

Confidential Staff

Any person who is engaged in work of confidential nature e.g. who has access to confidential information which could be of use to a Union, or who is directly training for such a position.

Directive and Administrative Staff

Any person who is a member of the Management or Executive Staff or who is directly training for such position or those involved in formulating and putting into operation a Member company's policy.

Supervisory Staff

A person who supervises the work of other, who is responsible for a section of the activities of a Member Company, who is required by Management as part of his duties, to make recommendations in connection with hiring, firing, promotion or disciplinary action and to whom subordinate staff would apply in the first instance for the remedy of grievances, if any, in connection with the foregoing the exercise of such authority requires independent judgement, this therefore excludes from this definition Charge Hands.

RECOGNITION AGREEMENT

MEMBERS OF THE ASSOCIATION

APPENDIX "C"

1. Associated Battery Manufacturers (EA) Ltd.

2. Associated Motors Ltd

3. Auto Diesel & Electrical Services Ltd

4. Blackwood Hodge (K) Ltd

5. Bon Motors Ltd

6. Car & General (Kenya) Ltd

7. Same Track - Cassini & Tonolo Ltd

8. Chloride Exide Kenya Ltd

9. CMC Motors Group (K) Ltd

10. D.T. Dobie & Co. (K)

11. ECTA Kenya Ltd

12. Lima Ltd

13. Toyota Kenya Ltd

14 Marshalls (E.A.) Ltd

14. Mashariki Motors Ltd

15. Nyeri Motor Services Ltd

16. Ryce Motors Ltd

17. Simba Colt Motors Ltd

18. Panafrica Trucks and Equipment (K) Limited

SECTION C: NEGOTIATING AND GRIEVANCE PROCEDURES

A. PREAMBLE

In order to achieve the objectives set out in the Recognition Agreement, the parties have agreed to set up and make use of the following:-

B. LOCAL NEGOTIATING COMMITTEE

(i) A local Negotiating Committee shall be formed within each Member Company of the Association at its principal place of business and in all branches.

(ii) The Local Negotiating Committee shall consist of not more than three Representatives nominated by the Company and not more than three employees' Representatives. All members of the Local Negotiating Committee shall be in the employment of the Company concerned. A quorum shall be not less than two Representatives from each party.

(iii) The Local Negotiating Committee shall meet as and when necessary to consider claims or grievances affecting only the employees of the Company concerned at the particular site or locality. The Committee shall regulate its own procedure and elect its own Chairman and Secretary.

(iv) Provided that any such claims or grievances shall be raised in the first instance by a Union Representative with the immediate supervisor of the particular department or place of work within five working days of the occurrence giving rise to the claim or grievance.

(v) In the event of failure to reach settlement of the matter at the Local Negotiating Committee, it shall be referred to the Joint Industrial Council within two weeks.

C. JOINT INDUSTRIAL COUNCIL

(i) The function of the Joint Industrial Council shall be to negotiate on any matter detailed in Appendix 'A' to the Recognition Agreement, as and when requested to do so, and on all disputes or other matters referred to it by the aggrieved party following deadlock at a Local Negotiating Committee Meeting.

(ii) The Joint Industrial Council shall consist of not more than five members nominated by the Association and not more than five members nominated by the Union. A quorum shall be not less than three representatives from each party, provided that, in exceptional circumstances and with the consent of the other party, the quorum may be reduced to two in order not to delay the conduct of essential business.

(iii) The Joint Industrial Council shall meet as and when necessary. It shall regulate its own procedure and shall elect its own Chairman and appoint its own Secretary or secretaries. It may also co-opt, where necessary, members of the Local Negotiating Committee or expert witnesses. It may also set a sub-committee or committees to try and settle any problem that may arise at the Joint Industrial Council.

(iv) The expenses of the Joint Industrial Council (if any) shall be met by the Association and the Union in equal shares unless otherwise agreed.

(v) A meeting of the Joint Industrial Council shall take place within 15 working days of a request for a meeting from either the Union or the Association. Such request or report shall state the matter or matters to be discussed and will be placed on the Agenda by the Secretary last appointed by the Council.

(vi) Matters referred to the Joint Industrial Council by either party may be referred back to the Local Negotiating Committee in writing if, in the opinion of the Council, such matters have no been properly or thoroughly dealt with by the Local Negotiating Committee.

(vii) In the event of failure to reach settlement at the Joint Industrial Council, either party may refer the matter in dispute to the Minister for Labour and Human Resource Development in accordance with Section 62 of the Labour Relations Act, 2007, Laws of Kenya.

(viii)No lockout, strike or other action to hinder the operation of the business of any member of the Association shall take place on a matter so referred to the Minister for Labour and Human Resource Development.

D. JOINT CONSULTATIVE MACHINERY

(i) The Association and the Union mutually recognise the desirability of a Works Council in every Member Company of the Association consisting of representatives from both management and employees of such company.

(ii) The functions of those Councils shall be that of a Consultative body only on any matters not included in Appendix 'A' to the Recognition Agreement and which are in normal practice not regarded as subject for negotiation between the Association and the Union.

(iii) It is hereby agreed that the subject set out in Appendix 'D' to the Recognition Agreement are not to be regarded as subjects for negotiation between the Association and the Union.

MERIT

JOB CLASSIFICATIONS

Job Descriptions and classifications as contained in Sections F and G of the Agreement remain unchanged.

GENERAL WAGE INCREASES

SECTION E: TERMS AND CONDITIONS OF SERVICE

The following pages cover all Terms and Conditions of Service affecting unionisable Employees of the Members of the Association, whether Awarded by the Industrial Court or Agreed in voluntary negotiations at meetings of the Joint Industrial Council, in accordance with the following clauses:-

Clause

1. Working Hours

2. Overtime Payment

3. Housing

4. Annual Leave

5. Compassionate Leave

6. Public Holidays

7. Religious Holidays

8. Sick Leave

9. Medical Expenses

10 (a).Maternity Leave

10 (b) Paternity leave

11. Safari Subsistence Allowance

12. Acting Allowance

13. Probation

14. Warning Procedure

15. Termination of Service

16. Redundancy

17. Protective Clothing

18. Retirement

19. Non-Unionisable Staff

20. Union Officials

21. Check-off

22. Trade Tests

23. Conflicting Outside Interests

24. Suspension

25. Disturbance Allowance

26. Funeral Grant

27. Absenteeism

28. Casual employment

29. Heavy Duty Allowance

30. Baggage Allowance

31. Agency Fee

32. Effective date

WORKING HOURS - CLAUSE 1

OVERTIME PAYMENT - CLAUSE 2

HOUSING - CLAUSE 3

Housing Allowance as detailed here below will be paid in addition to the Basic Minimum Wage set out under Section D.

Where housing is provided by the employer a sum not exceeding such housing allowance will be deducted from the monthly allowances.

HOUSING ALLOWANCE:

The following monthly Housing Allowance are now applicable to cover all areas in Kenya:-

ANNUAL LEAVE - CLAUSE 4

7. Permission for such accumulation shall not be unreasonably withheld and it shall be the duty of Management to confirm its decision in writing to the employee concerned.

8. When accumulation of leave is agreed by Management, it must not in any case, exceed two years entitlement.

9. Leave taken and not accumulated as above shall automatically lapse.

10. LEAVE TRAVELLING ALLOWANCE

COMPASSIONATE LEAVE - CLAUSE 5

PUBLIC HOLIDAYS - CLAUSE 6

RELIGIOUS HOLIDAYS - CLAUSE 7

If leave is granted for religious holidays other than those gazetted by Government, such leave will normally be without pay or, if paid, will be deducted from the employee's annual leave entitlement.

PROVIDED THAT THE decision whether or not to grant absence on such religious holidays with pay or without deduction from the employee's leave entitlement shall be at the discretion of the employer.

SICK LEAVE - CLAUSE 8

PROVIDED THAT:

2. The Employee has completed the appropriate probationary period.

3. The Employee produces a medical certificate authorizing such sick leave, signed by an approved registered medical practitioner.

4. Sick leave may not be accumulated from year to year.

5. No person shall be eligible for sick pay in respect of any incapacity due to gross neglect on his own part.

6. No person shall be eligible for sick pay if:

(a) The illness or injury was contracted during any period when the employee was absent from his employment without lawful cause of excuse, or

(b) He is suffering from venereal disease, or

(c) He is suffering from illness or injury which has been contracted prior to his employment.

MEDICAL EXPENSES - CLAUSE 9

MATERNITY LEAVE – CLAUSE 10

SAFARI SUBSISTENCE ALLOWANCE - CLAUSE 11

When an employee is required to proceed on duty away from his normal place of work, other than on transfer, and such absence involves the purchase of meals away from home, he shall be entitled to Safari Allowance at the rates shown below.

Should be absence necessitate a night stop away from his place of residence, then the employer shall, in addition to the above, be entitled to the allowance also shown as follows:-

ACTING ALLOWANCE - CLAUSE 12

1. An employee required to act in a higher grade for any period in excess of 8 days, shall be paid his own salary plus 25% of the salary of the person for whom he is acting, or the salary of the person for whom he is acting, whichever is the less.

2. The basis for calculation of acting allowance shall be x/30ths of a month's pay where X is the total number of days during which an employee is required to act for another. Then, if an employee acts for a colleague during the latter's absence on leave for 23 working days, the calculation will be based on 23/30ths of month's pay.

PROBATION - CLAUSE 13

WARNING PROCEDURE - CLAUSE 14

1. An employee, who is guilty of an offence other than gross misconduct or other lawful cause of dismissal, may be given a written warning which shall be entered in the employee's employment record card and shall remain valid for a period of twelve months from the date of issue.

2. If, within the twelve months period, the employee commits a similar or any other offence which does not warrant dismissal, he will be further warned in writing in his employment record card and the two warnings shall remain valid for a period of 12 months from the date of the second warning.

3. If, within this twelve months period the employee commits a further offence, which does not warrant dismissal, he will be issued with a final letter of warning which will make him liable to SUMMARY DISMISSAL for any other offence which he may commit thereafter.

4. A final letter of warning will remain valid for a period of one year from the date of issue.

5. Copies of All warning letters shall be sent to the Senior Shopsteward of the Company or Branch, or to another person acting as such during his absence and, in addition, a copy of the FINAL warning letter shall be sent to the General Secretary of the Union.

6. An employee, who is summarily dismissed for lawful cause, shall be paid on dismissal all monies, allowances and benefits due to him up to the date of dismissal.

TERMINATION OF SERVICE - CLAUSE 15

After the completion of the probationary period, notice of termination of employment may be given by either party to the other in writing in accordance with the length of service of the employee with the employer, thus:-

(a) From completion of probationary period to 5 years' service: 1 month's notice or salary in lieu of notice.

(b) From 5 years but under 15 years of service: 2 month's notice or salary in lieu of notice.

(c) From 15 years onwards: 3 months' notice or salary in lieu of notice.

(d) An employee who is terminated or resigns after completing one year service will be entitled to payment of gratuity at the rate of 17 days’ pay per completed year of service. Provided that an employee who is terminated on disciplinary grounds shall not be entitled to gratuity.

Provided payment in lieu of notice shall include housing allowance.

REDUNDANCY - CLAUSE 16

1. In order to avoid the necessity for the reference of every case of intended redundancy to the Industrial court, the parties shall adopt the following procedure in processing such cases:

(a) An employer wishing to declare any redundancy, (or the Association on behalf of such employer), shall notify the General Secretary of the Union, in writing, giving details as to the reasons for and the extent of the intended redundancy.

(b) If the Union wishes to contest the necessity for such redundancy, it shall do so within fifteen days of receipt of the above advice (by meeting the employer, or the Association on behalf of the employer, to discuss the matter).

(c) If the Union does not communicate with the employer, or with the Association on behalf of the employer, within the fifteen days referred to in (b) above, the employer shall proceed and effect such redundancy.

(d) If no agreement is reached at the Joint Industrial council, then the matter may be reported to the Minister for Labour and Human Resource Development as a trade dispute with request for appropriate action.

2. The principles covering redundancy as set out in the Industrial relations Charter are accepted by both the Association and the Union.

3. It is understood that redundancy is on a Company and not on a departmental basis.

4. If, at a later date, the position of the particular company should improve to such an extent that it wishes to engage staff, then in the consideration of applications for employment, preference will be given (within a particular category and trade) to those employees who were previously declared redundant.

5. Should an employment opportunity occur in the particular category and trade of an employee previously declared redundant but, in a lower grade than that which the employee occupied prior to being declared redundant, then he shall still be offered the job but, if he wishes to take the lower grade job he shall signify his voluntary acceptance thereof and shall have no right to his previous grade.

6. In the event of employees being declared redundant, they will be paid the following:

(a) Pay in lieu of the appropriate notice in accordance with Clause 15 of this Agreement,

(c) A service gratuity of 10 days’ basic wage for each completed year of service for employees with a continuous service of 1 (one) year and above. Payment in respect of completed months over and above completed years will be calculated on prorata basis. Provided that where an employee is covered by an existing pension/provident fund they will not be entitled to gratuity under this clause.

PROTECTIVE CLOTHING - CLAUSE 17

RETIREMENT - CLAUSE 18

2. On completion of 1 year's service a part of any subsequent year in excess of 6 months will count as a completed year of service for the purpose of calculating the above payment.

3. When an employee is covered by an existing provident fund he should get the benefits most advantageous to her/him, either from the existing provident fund or under this Agreement.

4. Retirement benefits payable under this Agreement will be in respect of the years of service of an employee and will be calculated on the employee's salary as at the date of retirement.

5. In the case of the death of an employee while in the service of the employer, the employer will pay to the dependent relatives of the deceased the sum of money calculated in accordance with the above clauses and entered on his/her record of service. The words "dependent relatives" shall have the meaning provided in Section 21 of the National Social Security Fund Act 1965.

6. Notice for retirement and resignation shall be as per Clause 15 of this Agreement.

NON-UNIONISABLE STAFF - CLAUSE 19

1. All categories of employees of Member Companies of the Association engaged in employment directly connected with the Motor Trade and its Allied Industries in Kenya are unionisable, except those categories described in Appendix "B" to the Recognition Agreement (Section A of this Agreement) under the headings:-

(i) Confidential Staff

(ii) Directive and Administrative Staff

(iii) Supervisory Staff

2. On being appointed to a non-unionisable post, an employee must be advised, in his letter of appointment, of the fact that he has become non-unionisable.

UNION OFFICIALS - CLAUSE 20

Without upsetting management's prerogative to transfer or terminate the services of employees, employers are asked to advise the union, whenever possible, when a Union official is to be transferred or to be declared redundant.

1. When an employee indicates his wish to revoke his check-off authorization, the management will provide him with the normal revocation form for completion.

2. If the employee does not complete the form, the deduction of the union dues will continue.

TRADE TESTS - CLAUSE 22

NONE

(Note: This subject is still under review)

CONFLICTING OUTSIDE INTERESTS - CLAUSE 23

1. Whilst every employee is entitled to use his leisure hours for his own benefit, it must be borne in mind that all employees owe a duty of fidelity to their respective full-time employers.

2. An employee may not of his own volition during his term of employment engage himself for reward in any business with an established customer who has normally dealt with his employer, and shall not at any time do anything for reward which might inflict harm on his employer's business.

This duty of fidelity varies with each employee depending on his seniority and the confidential position which he may enjoy with his full-time employer.

SUSPENSION - CLAUSE 24

When an employee is suspended from duty for any reason, such suspension shall be on full pay until either lifted or the services terminated.

DISTURBANCE ALLOWANCE - CLAUSE 25

1. When an employee is transferred from one town to another, he shall be paid the sum of Kshs.22,959/- for the 1st year and 25,255/- for the 2nd year of the Agreement by way of Disturbance Allowance.

2. The Disturbance Allowance does not, of course, include the fare or fares for an individual and, if applicable, his family which must be paid in addition.

FUNERAL GRANT - CLAUSE 26

ABSENTEEISM - CLAUSE 27

Any employee who is absent for 7 consecutive days or a total of 10 days in one calendar year, without permission, will be deemed to have left his employment and will not be allowed to return to his work-place except when he produces satisfactory evidence that such absence was warranted.

CASUAL EMPLOYMENT - CLAUSE 28

A person employed as a casual employee shall be paid for each day worked at the rate of one twenty second of both the monthly wage and housing allowance applicable to him under the basic minimum wages and housing allowance Clauses having regard to his occupation and the area of employment.

A casual employee shall be confirmed to regular monthly terms of employment after working consecutively or intermittently for ninety days in one year.

HEAVY DUTY ALLOWANCE - CLAUSE 29

(a) An employee engaged in repair of vehicles of tare weight in excess of 4400 1b but not exceeding tare weight of 8960 1b shall be entitled to heavy duty allowance of Kshs.569/= per month for the first year and k.shs 625/- per month for the 2nd year.

(b) An employee engaged in repair of vehicles of tare weight in excess of 8960 1b shall be entitled to heavy duty allowance of Kshs.717/= month per month for the 1st year and K.shs.848/= for the second year.

BAGGAGE ALLOWANCE - CLAUSE 30

On retirement, an employee shall be entitled to a baggage allowance at the rate of 100% of his month's basic pay to cover the cost of transportation of his personal effects. Provided retirement shall be on reaching the age of retirement or on the grounds of ill-health as per Clause 18 of this Agreement. Those declared redundant shall be entitled to 50% of one’s basic salary.

AGENCY FEE - CLAUSE 31

The Union shall be entitled to charge Agency Fee upon non-members who benefit from such Collective Bargaining Agreement. The amount chargeable shall be approved by the Minister as provided for in the Labour Relations Act, 2007.

EFFECTIVE DATE AND DURATION - CLAUSE 32

This Agreement shall be effective from 1st July, 2014 and shall remain in force for a period of two years. Thereafter, it shall continue in force until amended by mutual agreement between the parties provided that the party intending to amend it gives three months' notice in writing setting out in details all the amendments required.

SIGNED AT NAIROBI THIS...................... DAY OF ...........................2014

SIGNED FOR AND ON BEHALF OF THE ASSOCIATION

..........................................

JULIE KIMEU

CHAIRPERSON

...........................................

ROSE MUTOKO

JIC MEMBER

..............................................

BERNARD NJOROGE

JIC MEMBER

...........................................

JOHN N. IKINYA

JIC MEMBER

SIGNED FOR AND ON BEHALF OF THE UNION

............................................

JUSTUS M. OTAKWA

GENERAL SECRETARY

..................................................

WASHINGTON OKWARA

DEPUTY GENERAL SECRETARY

IN THE PRESENCE OF

.....................................

L.W KARIUKI

MANAGER, INDUSTRIAL RELATIONS SERVICES