Companies

Former workers allowed to seize Sh1.3bn from EAPCC

portland

Portland Cement staff at work. FILE PHOTO | NMG

East Africa Portland Cement Company (EAPCC) has suffered a blow after the Court of Appeal declined to lift an order obtained by former workers, attaching its bank accounts over a debt of Sh1.3 billion.

A Bench of three judges of the appellate court said the cement company has previously obtained orders from the court on terms, which it has not bothered to fulfil.

Justices Asike Makhandia, Kathurima M’Inoti and Mumbi Ngugi further said the Athi-River-based company also voluntarily entered into a consent order with the about 700 former employees but failed to honour the agreement.

“For those reasons, we are satisfied that the conduct of the applicant disentitles it to an equitable remedy,” the judges said.

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The company told the court that Employment and Labour Relations Court judge Anna Mwaure allowed the former workers to attach the bank accounts to recover their dues.

The firm also submitted that 24 titles to its properties were placed under prohibition, although the attached amount was yet to be released to the former employees or the orders of prohibition registered against the titles.

The former workers were awarded Sh1.4 billion in August 2015, after accusing the firm of discrepancy in remuneration between them and their permanent counterparts in the same job position, despite signing a Collective Bargaining Agreement in 2012.

The court then directed the company to pay all unionisable contract employees in terms of the CBA.

When the former workers attempted to execute the decree on September 14, 2018, the firm obtained a conditional order suspending the execution subject to providing a bank guarantee of Sh350 million within 30 days, failing which the stay order would lapse.

The company did not comply with any of the conditions given by the court, but moved back to the lower court on January 13, 2020, and entered into a consent for settlement of the amount. In the new deal, they agreed to pay the former workers Sh90 million on or before January 31, 2020.

Thereafter the parties were to meet the following month to agree on modalities for payment of the balance, which was to be settled from the sale of two properties belonging to EAPCC.

And if the properties were not sold, the EAPCC undertook to make reasonable endeavours to secure funds to pay the balance of their dues. Although the firm complied and paid Sh90 million as promised, the other part of the deal was never fulfilled.

The firm had initially sought to sell a portion of its expansive land to settle the balance but the process was delayed, forcing the former employees to head back to court for an order freezing the company’s bank accounts.

The workers then sought to attach the bank accounts and prohibit EAPCC from dealing with the 24 titles, a move that forced the company to head to the appellate court.

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The firm argued that the pending appeal stands to be rendered nugatory because the respondents, who are its former employees, have no known assets or means to repay the amount should the appeal succeed after payment.

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