The EAPCC managing director, Simon Ole Nkeri Tuesday told Parliament that the Board of Directors had opted for non-renewal of contracts due to a bloated workforce whose wage bill was unsustainable.
He was responding to claims by former staff, made through Kenya Chemical and Allied Union, accusing the company of unprocedural termination of contracts, nepotism and failure to remit statutory deductions.
The MD said the decision was also made amid ongoing automation and upgrade of its production processes.
East African Portland Cement Company (EAPCC) has laid off 520 employees in a move the struggling manufacturer said is aimed at keeping the company afloat.
The EAPCC managing director, Simon Ole Nkeri Tuesday told Parliament that the Board of Directors had opted for non-renewal of contracts due to a bloated workforce whose wage bill was unsustainable.
He was responding to claims by former staff, made through Kenya Chemical and Allied Union, accusing the company of unprocedural termination of contracts, nepotism and failure to remit statutory deductions.
“We have not retrenched any employee. The Board of Directors only opted not to renew the contracts of those employees whose contracts had expired,” he told the National Assembly’s Labour and Social Welfare committee yesterday.
He said the company embarked on rationalisaton of staff to stay afloat and to keep pace with competitors who have fewer employees but are more productive.
The MD said the decision was also made amid ongoing automation and upgrade of its production processes.
“The company has 133 jobs vis-à-vis 1,600 employees, meaning that it had 10 people per job, hence a lot of idling around,” he said, adding that 551 unskilled staff had been hired at once by the previous management.
Mr Nkeri also said their recruitment was not competitively done and was conducted without approval of the Board.
The union had petitioned Parliament to intervene on their behalf saying that termination of their contracts had led to undue suffering for their families.
They said no notice was given before they were let go and that on the fateful day, armed administration police forced them out of company premises contrary to laws and norms of trade unions. “We were bundled out in our overalls, served by the police with contract termination letters and have since been blocked from accessing our valuables within the premises,” said Thomas Muthoka, a union official.
Mr Nkeri argued there is no provision in law requiring contract workers to be given a three-months’ notice for non-renewal of contract.
He said all the workers affected were paid their dues to the last day and will be paid their gratuity in due course.
“The National Social Security Fund (NSSF) and National Hospital Insurance Fund (NHIF) remittances are up to date. We have written to the banks and told them we will make arrangements to service what is owed to them,” he said.
Aside from non-remittance of statutory deductions, the aggrieved former workers accused EAPCC of failing to make payments to banks for loans they had taken, which then attracted penalties.
Mr Nkeri said accusations on nepotism, non remittance and sexual harassment as contained in the petition to the committee were untrue, noting that the allegations have been occasioned by the petitioners’ lack of adequate information.
EAPCC is partly owned by the NSSF (27 per cent), the National Treasury (25.3 per cent), LarfargeHolcim Group (41.8 per cent) and minority shareholders (5.9 per cent).
The company started experiencing financial difficulties in 2012 following industrial unrest and board wrangles that led to prolonged factory closures.
This caused poor performance, cash flow constraints and market share erosion.
