Kenol executive faces contempt charges over layoffs
KenolKobil general manager David Ohana will be charged with contempt of court after signing the termination letters of at least nine employees against court orders.
The Industrial Court on Friday gave representatives of the sacked workers the go-ahead to file the suit against Mr Ohana, which could see the courts impose a fine or reinstate the sacked employees.
Industrial Court judge Linnet Ndolo on August 14th barred the oil marketer from sacking employees until a case lodged by three workers challenging the company’s takeover by Swiss company Puma Energy is determined.
The order came after KenolKobil had already sacked 14 employees, with the company defying the injunction to fire Joseph Gatuma, Abigail Bundi, Annete Ounga, and Gerald Wamayah between August 28 and 31.
“That leave is granted to the applicant to institute contempt proceedings against the general manager of KenolKobil Ltd Mr David Ohana,” reads part of the order by the registrar of industrial court dated September 7.
In their arguments, Rachier & Amollo Advocates say Mr Ohana was the only manager to append his signature to the termination letters of the four workers, singling him out as contemptuous of the court.
“That despite having been served with the subject court order, Mr Ohana has wilfully disobeyed the aforesaid ruling and consequential order of this honourable court and has continued to sack more employees without reasonable cause,” the law firm argued.
Legal experts say the courts have wide ranging powers and in this case could reinstate the sacked workers or impose a fine on KenolKobil besides the possibility of jailing Mr Ohana.
“Courts can issue a wide range of orders, including a fine commensurate to the earnings of the sacked workers,” said Evans Monari, a commercial lawyer with Dally & Figgis. “Enforcement arising from contempt rulings is usually the main challenge,” he added.
Top shareholders of KenolKobil, who are linked to former Cabinet minister Nicholas Biwott have announced plans to cede a controlling stake to a Swiss company Puma Energy—which has indicated its intention to buy out minority shareholders in a deal that could see the oil marketer de-list from the NSE.
KenolKobil’s more than 250 non-unionisable employees fear they could lose their jobs following the ownership changes. The oil marketer has laid off nearly 20 workers, including Boyi Mghanga who was retrenched Monday according to a letter seen by the Business Daily, over the past month citing their poor performance. In Tanzania, the oil marketer is also facing similar court action by its subsidiary -- KenolKobil Tanzania -- after employees moved to court.
The legal spats are emerging at a moment when KenolKobil has put on hold expansion plans after reporting a half year loss of Sh3.8 billion in the half year ended June, reversing the Sh2.2 billion net profit it made in the same period last year.
The firm was hit by foreign exchange hedging that resulted in currency losses of Sh4.2 billion compared to Sh842.6 million a year earlier.
Its share price yesterday dropped to Sh13.15 a piece from Friday’s Sh15.10—a level that had seen the stock gain 51 per cent over the past year. “Foreign exchange losses and high cost of products during the period just has not been good to KenolKobil. That’s why the shares have received such a beating,” Mwenda Rarama, an analyst at Kingdom Securities said. “They have stopped capital investments meaning forecast on returns have gone down.”
