More than 700 retrenched Telkom Kenya workers awarded Sh1.3 billion compensation a year ago face a prolonged wait after getting into a legal dispute with their lawyers who are demanding 30 per cent of the money.
The former Telkom workers have obtained a court order freezing bank accounts of three law firms hired to prosecute the case against their former employer, accusing them of colluding to embezzle a large portion of their dues.
The retrenchees were to get between Sh900,000 and Sh3.5 million each depending on pay grade during employment and the number of years served at Telkom.
They, however, claim in a fresh suit that Letangule & Company Advocates, Oluoch & Company Advocates and S.M. & Company Advocates have decided to illegally pocket Sh390 million in legal and auctioneers’ costs.
Justice Eric Ogola in April issued a freeze order on the law firms’ client accounts after the retrenched workers argued that the Sh1.3 billion may have already been moved from a joint bank account they opened specifically for the Telkom case, to the law firms’ client accounts in NIC, Oriental and Chase banks.
But the ex-Telkom employees claim that the law firms have somehow continued to operate the bank accounts despite the freeze order.
They hold that Telkom already paid auctioneers’ and legal costs as part of a deal they struck with their former employer, making the deductions by the three law firms illegal.
“The deduction of 30 per cent is in fact a double payment since the respondents had been paid a deposit on their legal fees by the retrenched workers and during the conduct of the suit in court, and yet now the very defendants insist that they deduct it from the lump sum payment of each individual retrenches,” the former Telkom workers say in court papers.
The three law firms have now asked Justice Grace Nzioka to lift the freeze, arguing that Justice Ogola jumped the gun in issuing the orders before considering whether the commercial division of the High Court has authority to determine the suit.
The law firms add that the freezing of their accounts has grounded their businesses, as they are unable to conduct transactions on behalf of other clients whose funds are held in the affected accounts.
The former Telkom employees have also accused the three law firms of omitting some names from the list of those who are to benefit from the Sh1.3 billion award.
Some retrenchees who were to receive the same amount of compensation, they say, have received varying sums, putting into question the process their lawyers are using to disburse the Sh1.3 billion.
“The disbursement of funds by the respondents have been haphazard due to lack of a formula thus the disbursements are varying from one plaintiff to another. In the said schedule certain names of retrenchees attached to KCCT but under Telkom were omitted.”
The three law firms want the fresh suit filed against them referred to the labour court where the retrenched workers had initially sued Telkom. They claim that the commercial court has no authority to determine the suit.
“As mentioned earlier, this honourable court lacks jurisdiction to entertain the suit. The plaintiffs are guilty of material non-disclosure and they cannot be beneficiaries of the discretion of this honourable court.
"The orders issued by Justice Ogola are far reaching and should be discharged and set aside,” Oluoch & Company Advocates and S.M. Kitonga & Company Advocates say in their application to lift the freeze.
But the former Telkom staff argue that the fresh dispute is not an employer-employee standoff but rather a client-advocate disagreement which can be determined by the commercial court.
The 705 former Telkom workers want Justice Grace Nzioka to compel the law firms to bring to court documents pertaining to the joint bank account they opened at National Bank’s Upper Hill branch specifically to receive the Sh1.3 billion dues.
Telkom in December last year struck a deal to pay the retrenched workers Sh1.3 billion instead of the Sh3.2 billion they had been awarded by the Court of Appeal. The deal was also to see Telkom settle legal fees of Sh30 million and Sh8 million in auctioneers’ fees.
The settlement came as a relief to Telkom, which was in the process of disposing of some of its assets last April before the labour relations court stopped the process midway.
Justice Njagi Marete halted the sale following an application by the former employees, who told the court that they feared the firm would have no attachable assets if the sale was allowed.
Telkom is in the process of concluding the buyout of French firm Orange’s 70 per cent stake. Orange has opted to pull out of the Kenyan market.