Botswana retailer Choppies is in a fortnight set to begin talks with a trade union that represents workers of Ukwala Supermarkets, which could see an increase in the wage bill for the South African chain’s newly acquired Kenyan subsidiary.
The Gaborone-based retail giant — which owns 75 per cent of Ukwala — last week signed a deal with the Kenya Union of Commercial, Food and Allied Workers (Kucfaw) to begin talks on wages, workload, and welfare.
The labour union said it would enhance its pay demands from an earlier proposal given to former owners of Ukwala, arguing that Botswana Stock Exchange and Johannesburg Stock Exchange-listed Choppies has the necessary financial muscle.
“Talks are about to start. We will be giving a new proposal as the earlier one was prepared when the retailer was shaky but the new investor is an established player,” said Kucfaw assistant secretary general Mike Otieno in an interview.
“We want the workers to enjoy what their peers in other supermarkets are earning,” he added. Ukwala has 777 workers.
Unionised employees want to be paid at least minimum wages and enjoy other benefits such as day offs, leave days, overtime pay, lunch break, house allowance and paid sick leave.
The workers’ union had in November last year threatened to move to court to stop the transfer of Ukwala to Choppies demanding the parties sign a pay deal, forcing the Botswanan chain to commit to kick-start wage talks once the acquisition was sealed.
Choppies in June last year disclosed plans to spend Sh1 billion to acquire 10 Ukwala stores — with half of them located in Kisumu, three in Nairobi and a single outlet in Nakuru and Kericho.
The takeover was completed in March, with Choppies saying it will retain the Ukwala brand, “and follow a co-branding strategy”.
The union already represents workers of other top retailers including Nakumatt, Tuskys, Uchumi, and Chandarana Supermarkets.
“The negotiations and discussions between the representatives of the union and company shall be conducted on a representative and authoritative basis,” reads the agreement dated June 7, 2016 spelling out the recognition of the workers’ union and the negotiating procedure.
The deal was signed by Choppies Enterprises Kenya Ltd director Parin Bharakumar Patel, Ukwala’s assistant human resource manager Trizer Kinyua, and Mr Otieno for the trade union.
Newly-employed cashiers at Tuskys currently earn Sh26,889 per month, Sh24,820 at Chandarana, and about Sh22,321 monthly at Nakumatt, according to the latest collective bargaining agreement signed between the retailer and the union.
Choppies entry to Kenya was delayed by a Sh946 million tax dispute between Ukwala and the taxman, with an out-of-court deal allowing for Sh59.7 million upfront and the contested balance to be arbitrated by a tax tribunal.
Choppies has a total of 157 outlets spread in Botswana (78), South Africa (40) and Zimbabwe (28). Kenya (10) and a store in Zambia.
Sales topped P3.5 billion (Sh32.1 billion) in the half-year to December 2015, while net profit was flat at P104 million (Sh948 million) in the period under review.