Companies

Two EPZ companies to fire 7,850 employees after sale of property

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Labour PS, Shadrack Mwadime. FILE PHOTO | LUCY WANJIRU | NMG

The Ministry of Labour has summoned the management of two EPZ factories in Changamwe, Mombasa over the impending layoff of 7,850 staff next month.

The Labour PS Shadrack Mwadime told the National Assembly’s Committee on Labour that the management of Ashton Apparel (EPZ) Limited and Mombasa Apparel (EPZ) Limited will appear before the Mombasa County Labour Officer on December 7 to shed light on the planned mass sackings.

He said the representatives of the employees have also been invited to the meeting ahead of the layoff of staff on December 23.

“We have written to the two companies’ directors and staff representatives to appear before the Labour Officer in Mombasa on December 7. They notified us that they have issued a redundancy notice on November 21 and we need to know how staff dues will be paid,” Mr Mwadime, who was accompanied by Labour Commissioner Hellen Apiyo, said.

“We will ensure justice is served in the interest of both affected employees and employers. This meeting is where we will interrogate the issue of continuity.”

Ashton Apparel and Mombasa Apparel, which is said to be owned by a single investor, issued a redundancy notice on September 28, 2023, after an asset transfer agreement was reached between them and Gokaldas Exports Limited.

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Gokaldas Exports Limited is seeking to acquire Ashton Apparel, which has 2,669, and Mombasa Apparel, which has 5,023 employees.

“We hereby inform you that an agreement has been reached to transfer the assets of Ashton Apparel (EPZ) Ltd (the company) to Ashton Mombasa Apparel (EPZ) Ltd (the acquirer), and the transaction close is planned for December 23, 2023, subject to the related Kenyan government regulatory approvals being received and all pre-conditions being fulfilled,” Sathyamurthy Indushekar, who signed for Ashton Apparel, said in a letter dated November 22, 2023 to staff.

“Because of this agreement, we are notifying you of the intended non-renewal of your current employment contract with the company beyond the 23rd of December 2023 on grounds of redundancy.”

The letter, tabled before the committee states that the intended non-renewal of the contract, if effected, will impact all employees of the company.

The company informed its employees that upon the transfer of the assets and operations to Ashton Mombasa Apparel (EPZ) Limited, Gokaldas Exports Limited will issue employment contracts on its letterhead to employees, based on business requirements.

“Please note that this notice concurrently initiates the 30-day consultation period as mandated by the Employment Act,” the firm told its employees.

“At the end of your contract, the company will pay you the salary due to you up to that date, accrued but untaken leave, payment in lieu of notice, if applicable and severance pay calculated at the rate of 15 days per year of completed service as mandated by the Employment Act.”

The committee chaired by Runyenjes MP Erick Karemba is inquiring into mistreatment of employees, poor working conditions sexual harassment and the planned mass layoff by the two firms.

The inquiry followed a statement sought by Changamwe MP Omar Mwinyi asking the House to investigate the serious allegations facing the two EPZ firms.

Labour Commissioner Ms Apiyo told the committee that it will probe the cases of sexual harassment in the EPZ’s.

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“We will investigate cases of alleged sexual harassment of employees in the EPZ. We are asking those with specific cases to reach out to us,” Ms Apiyo said.

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