DHL strikes deal with union to hike staff pay

International logistics company DHL has reached a deal with a trade union representing its supply chain workers in Kenya that will see their pay rise 19 per cent over two years.

The deal, which was formalized in Nairobi, will see 366 workers get a nine per cent pay increase in the first year and a further nine per cent in the second, based on the increased figure. This will see their pay rise 18.8 per cent from its current level after the second raise.

The agreement also includes a number of other perks.

Drivers, fork-lift operators, shop stewards, cleaners, messengers and mechanics will all benefit from the collective bargaining agreement.

The workers had hoped for an immediate 15 per cent pay increase but the firm’s management argued reduced revenues meant this was not possible.

“Our business is the same size as it was last year, but definitely smaller than it was in 2011,” said the company’s East Africa Supply Chain Managing Director Ben Clay.

The logistics giant has contracts with several Kenyan companies for transportation and warehousing. East Africa Breweries, Unilever, British American Tobacco and USAID are its core clients. Lower volumes shipped by the first two have hurt business in the past two years.

“The agreement is a win-win for both parties considering the country’s inflation rate is over seven per cent,” said lead-negotiator Peter Ngugi of the Kenya Union of Commercial Food and Allied Workers.

DHL Kenya holds these collective bargaining negotiations with its unionized employees every two years.

, however, noted the difficulty that faced the negotiations even before they started.

“This particular renewal had the potential to be difficult because of a weak economy,” says Mr Clay. “We are a business based in the consumer sector and our principal customers are consumer customers.”

Negotiations, however, took just two weeks to conclude.

Part of the settlement includes improved bonuses like medical cover, and house and school fees allowances for well-performing employees.

Leave travelling allowance has been set at six per cent of the annual basic salary with a minimum of Sh10,000.

Male workers are also entitled to a fully paid paternity leave of three months, in addition to the maximum allowable one month annual leave.

“There’s a lot of motivation among workers here,” said the Chief Shop Steward James Jabuya. “We remain patient with the management because we understand that it has been a tough year.”