Companies

Blow for ex-staff of regional airline in Sh609bn pay row

ea

A plane belonging to the defunct East African Airways. FILE PHOTO | NMG

Summary

  • The apex court dismissed the case by the retired employees saying they moved to court too late and there was nothing about the interpretation of the constitution in the matter, but about their payments.
  • The former employees were declared redundant on February 15, just over a month after the airline shut down operations following the collapse of the East African Community in 1977.
  • This led to the shutdown of EACC and saw the establishment of Kenya Airways and their counterparts, Air Uganda and Tanzania.

The Supreme Court has dashed hopes of former employees of the defunct East African Airways Corporation (EAAC) who sought to be paid Sh609 billion following their sacking in 1977.

The apex court dismissed the case by the retired employees saying they moved to court too late and there was nothing about the interpretation of the constitution in the matter, but about their payments.

The former employees were declared redundant on February 15, just over a month after the airline shut down operations following the collapse of the East African Community in 1977.

This led to the shutdown of EACC and saw the establishment of Kenya Airways and their counterparts, Air Uganda and Tanzania.

The former staff claimed that their counterparts in Tanzania and Uganda were paid their dues.

But the Supreme Court judges said the matter had been addressed by other courts, in similar cases filed by former employees of East African Community, after the collapse in 1977.

The former employees through their representatives Alfred Asidiga, Charles Njoroge and Peter Kituku had faulted the High Court and the Court of Appeal, saying they ignored the fact that they had relied on the assurances by Parliament and Attorney General that they would be paid before filing the case. They eventually filed the case in 1997.

The retirees claimed non-payment of various amounts, emanating from dissolution of the EAC and eventual winding up of the EACC.

They had lost the claim before the High Court and Court of Appeal, of being paid Sh306,367,840,391 from Provident Fund and further Sh302,666,559,163 redundancy payments.

They named ministries of Finance, Transport, the Registrar General, Attorney-General and affiliates of Barclays Bank who included Barclays Bank International Ltd, Barclays Bank Trust Company Ltd and Barclaytrust Channel Islands Ltd, among others.

The bank said in reply to the Supreme Court that there is no legal basis to claim monies from its affiliates when it is acknowledged that the monies arising from the provident fund were paid to the official receiver in 1977.

Further, it argues that a separate court had already determined that the East African Community Mediation Agreement Act of 1984 had factored their pensions and provident entitlements. The Act was enacted and which addressed the issue of provident funds due to all former employees of the defunct EAC.

The Mediation Agreement specifically addressed the precise amount that was received from the Crown Agents and disbursed to the three East African States at the time, being Kenya, Uganda, and Tanzania.

In 2014, High Court Judge Mumbi Ngugi had directed the Attorney- General to publish the total amount of money meant for former EAAC employees which is still lying at National Bank, the official receiver.