Retired KCC employees lose Sh100m payout suit

What you need to know:

The Court of Appeal has shut the door to former employees of Kenya Co-operative Creameries (KCC) by overturning a decision that found New KCC liable to pay them over Sh100 million in terminal dues.
A bench of three judges ruled that New KCC, incorporated in 2004 could not take over the liabilities of its predecessor and that the two were separate companies.

The Court of Appeal has shut the door to former employees of Kenya Co-operative Creameries (KCC) by overturning a decision that found New KCC liable to pay them over Sh100 million in terminal dues.

A bench of three judges ruled that New KCC, incorporated in 2004 could not take over the liabilities of its predecessor and that the two were separate companies.

Justices William Ouko, Wanjiru Karanja and Patrick Kiage, however pleaded: “Having said so however, and legalities aside, we hold onto the hope that the Attorney-General will find it in him to advise government to honour its word and pay the 1st respondents who have suffered long.”

The former employees led by John Kahiato Bari had sued New KCC seeking Sh109,640,482. They also sought Sh92,803,457 refund that the company failed to remit to Maziwa Sacco.

Justice Hellen Wasilwa had in 2017 ruled that New KCC was the same outfit and ought to settle the former employees’ dues. The retirees said the management of KCC later produced a schedule of payments due to every employee in terms of their terminal benefits and gratuity.

The company, however appealed against the decision arguing that New KCC was a different entity and it was wrong for the judge to rule otherwise. The ex-employees had initially filed a winding up case against the company but they discovered that an official receiver had been appointed by a third party creditor, Kenya Commercial Bank (KCB) to take over KCC’s assets in a bid to recover monies advanced to it.