Fruit grower and juice processor Del Monte Kenya is facing a higher wage bill after signing a pay raise deal with workers of between nine and seven per cent, in addition to improved allowances.
The 1,771 workers of the Thika-based fresh produce company — both temporary and permanent — are set to earn higher allowances for housing, travel and overtime, as well as enjoy paid leave under the new two-year agreement that will be backdated to April.
The collective bargaining agreement was signed on Tuesday between the Kenya Union of Commercial, Food and Allied Workers and Del Monte Kenya Ltd.
“It’s a good deal given the current situation. It was a protracted negotiation. It took us very long because the company is having other challenges,” said union secretary general Boniface Kavuvi.
Implementing the new demands is expected to see Del Monte’s staff costs rise by Sh61.7 million annually, according to the signed pay deal documents seen by the Business Daily.
Del Monte Kenya has 219 permanent employees while the rest are seasonal workers who only get hired at certain times in the year such as during planting and harvesting of pineapples.
The deal on higher pay and allowances comes at a time when Del Monte is embroiled in a legal fight with Murang’a County over the renewal of its land lease set to expire in 2022.
Governor Mwangi wa Iria demanded 6,000 acres of land from Del Monte as a condition to renew its land lease, the juice maker said in court filings.
Miami-based parent company Fresh Del Monte’s net sales grew by nearly a tenth to hit $3.9 billion in the period ended December 2014 in what the company said was buoyed by “expanded production in our new Saudi Arabian juice operation and our Kenya facility.”
Del Monte owns and operates a juice and food cannery as well as a warehouse in Thika where it has a 10,600-acre pineapple plantation under leasehold. It produces and markets pineapple, peaches, fruit cocktail, pears, tomatoes, fruit juices and other fruit and vegetables.
Del Monte competes with Kevian, maker of Pick’N’Peel fresh juice, Coca-Cola’s Minute Maid, Splash by Britania Allied and Kenylon.
The company is a subsidiary of New York Stock Exchange-listed Fresh Del Monte.
The Thika plantation is the company’s sole facility in Africa that supplies pineapple products to its global operations spanning more than 100 countries around the globe.
The lowest grade permanent workers at the plantation will receive a nine per cent pay increase in the first year and eight per cent in the second year, while those in the highest cadre will receive a seven per cent and six per cent raise respectively.
This will see the monthly basic pay for messengers and cleaners rise to Sh28,273 backdated to April this year and Sh30,534 as from April 2016.
Security guards, general machine operators and clerks will now take home Sh32,062 per month in basic pay and Sh34,307 effective next year.
Plant maintenance mechanics, electricians and technicians will rake in Sh63,313 monthly and Sh67,111 as from next year.
Housing allowance for employees not provided with company accommodation is set at Sh4,000 per month, leave travelling allowance of Sh2,900 as well as safari allowance of Sh800 accommodation and Sh770 for meals for travels outside Thika.
Seasonal staff working as cooks, forklift drivers and drivers will now earn Sh204.76 per hour and this will rise to Sh219.09 per hour from next year.
Technicians working on temporary basis will now pocket an hourly wage of Sh324.68 and Sh344.16 per hour from next year.
Del Monte workers have also won annual leave pegged at least 32 working days, two days compassionate leave when bereaved, sick leave of 67 days, three-month maternity leave, two-week paternity leave and study leave.
Temporary staff are now eligible to three days of annual leave, maternity, paternity and sick leave, overtime at the rate of 1.5 of the normal wage, housing allowance at Sh3,500 monthly and leave travelling allowance of Sh2,800.