A pay cut dispute has forced the owners of The Fairmont Norfolk, an iconic hotel in Nairobi, to close its doors indefinitely and sack all employees in a row sparked by the coronavirus pandemic.
In a memo to staff dated May 27, the country manager, Mehdi Morad, said they had closed the Nairobi hotel together with another outlet in the Mara because reduced business in the wake of the Covid-19 pandemic had made it difficult to meet employee pay demands.
The Business Daily established that the Norfolk employees had declined a proposal to remain on unpaid leave during the coronavirus period and demanded a 50 percent pay, triggering the closure.
The employees had opposed Norfolk’s decision to renege on a March deal that had promised them half pay in April and May and a fresh deal from June, according to correspondence seen by this newspaper.
“In reference to the memo dated April 30, 2020, we regret to inform you that the company is rescinding the agreement made with employees in regards to half pay in May 2020. Consequently, effective May 1, all employees will be on unpaid leave until advised otherwise,” said a memo by Axel Hauser, the Norfolk General Manager.
The employees protested the move, arguing that the layoffs were in breach of the law and the earlier agreement between them and management.
“The memo has been disagreed with by all employees…I wish to remind you of a legally binding agreement dated 26/03/2020 on half pay for the months of April and May. It is almost due,” Wallace Mungai, the Norfolk shop steward, told Mr Hauser.
On Wednesday, Norfolk said the pay row had forced it to close and fire all employees, setting the stage for a legal show down.
The Fairmont Hotels and Resorts said they are going to close Fairmont The Norfolk and Fairmont Mara Safari Cub as a result of the “spiral effect of the Covid-19 pandemic and the recent flooding of Fairmont Mara Safari Club”.
“Demands by the employees at this time and given the current financial constraints, are out of reach of the company,” said the Wednesday notice. “It is, therefore, the decision of the management to terminate the services of all employees due to frustration by way of mutual separation.” Employees are expected to receive their termination letters by June 5.
The ban on all international flights imposed in mid-March to curb the spread of the coronavirus has hit the country’s tourism industry, with some hotels, including those at the Coast, reporting occupancy rates of well below two percent in April.
Kenya has so far recorded 1,618 positive cases of Covid-19 and 58 deaths, far fewer than in comparably-sized countries in Europe, Asia or the Americas.
The dusk-to-dawn curfew and a ban on movement in and out of five counties worst hit by the coronavirus outbreak, including Mombasa and Nairobi, worsened the hoteliers’ business.
“Due to the uncertainty of when and how the impact of the global pandemic will result in the business picking up in the near future, we are left with no option but to close down the business indefinitely,” Mr Morad said in the memo.
Fairmont joins a growing list of hotels that have closed or suspended operations due to the effects of coronavirus.
Most five-star hotels rely on tourism, events and conferences which have since dried up.
In March, Nairobi’s Tribe Hotel, Ole Sereni and DusitD2 stopped operations days after the government imposed travel restrictions and social distancing rules to curb the spread of the coronavirus.
Other high-end hotels followed suit to cut costs in the wake of the global pandemic.