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Uchumi signs pay deal with staff to end biting go-slow

Uchumi chief executive Julius Kipng’etich. FILE PHOTO | NMG
Uchumi chief executive Julius Kipng’etich. FILE PHOTO | NMG  

Uchumi Supermarkets #ticker:UCHM has signed a return-to-work formula with its workers following a strike over non-payment of the May and June salaries, which paralysed the retail chain’s operations.

The deal signed yesterday between the supermarket and the Kenya Union of Commercial, Food and Allied Workers (Kucfaw) requires Uchumi, which has about 1,300 employees, to pay May salaries from today and June wages starting July 14.

The return-to-work formula signed by three Uchumi managers including chief executive Julius Kipng’etich and union officials requires all staff to resume duty with immediate effect.

It also states that no worker will be victimised for missing work or striking. Uchumi workers in various towns including Nairobi, Mombasa, Meru, Karatina, Eldoret and Kisumu took to the streets yesterday demanding payment of their salaries.

“Uchumi has assured us that they will implement the return-to-work formula as agreed and we trust that they will do as required. We have called off the strike and our members will now go back to work as they await the implementation of the signed deal,” said Kucfaw secretary-general Bonface Kavuvi.

The deal comes about two weeks after Kucfaw wrote to the Labour secretary Phyllis Kandie asking for her assistance in resolving the salary delay.

Kucfaw, which has 1,200 Uchumi employees as its members, claimed in its letter that the retailer had defaulted on remission of statutory deductions as well as payment of overtime wages.

Uchumi, however, says its payments to the National Hospital Insurance Fund are up to date but was two months late on contributions to the National Social Security Fund.

The Labour ministry in response to Kucfaw appointed a conciliator, Hellen Apiyo, to liaise with the union and Uchumi management for a lasting solution to the issue.

Uchumi has since attributed the delay in payment of salaries to constrained cash flows that have rendered it unable to meet some of its obligations.

Kenya’s largest retailer, Nakumatt, is facing similar financial troubles and delayed May salaries for a majority of its 1,555 employees even as it sent more than 100 on compulsory leave, citing low business volumes.

The troubled retailer has informed its workers that they will henceforth get paid weekly wages instead of earning monthly salaries.

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