Employees of the troubled retailer Nakumatt have moved to court seeking to stop the planned lay-off of 1,400 workers.
In a suit filed on their behalf by the Kenya Union of Commercial, Food and Allied Workers (Kucfaw), the workers say the firm’s receiver had signalled his intention to send the workers home on grounds of insolvency, which they claim is premature because the company has not been declared bankrupt.
The workers accuse the court-appointed administrator, Peter Kahi, of treating them inhumanely despite having supported Nakumatt’s turnaround plan since May, 2017 amid extreme difficulties.
The workers are seeking a court order restraining the Nakumatt administrator from declaring employees redundant.
They insist the planned sackings have been disguised as termination of their services on grounds of insolvency. On Friday, Employment and Labour Relations Court certified the application as urgent and directed the administrator to be served.
In one of the termination letters dated February 22, Mr Kahi says there is insufficient capital to continue operations at former capacity and informs the employee that his position of shop assistant had been abolished.
The sacked employees are to be paid one month salary for the period the administrator has been in charge of the firm.
“You will have a preferential claim for arrears of wages/salary up to the date of my appointment, but not exceeding Sh200,000, or four months in arrears, whichever is the lesser,” the termination letter says.
The remaining claims will be treated as unsecured credit to the company.
Nakumatt is expected to spend at least Sh280 million to send workers home.
But the workers claim that retrenching them even before the administrator tables his revival plans in court is not anchored in any law.
The union claims that the Nakumatt administrator had issued the sackings notice on account of insolvency, a declaration it said Nakumatt had not obtained as required by law.
The workers claim that they have a valid collective bargaining agreement that is in force and that during their last meeting on February 9, represented by their union, the administrator did not disclose any pending retrenchment.
While Nakumatt had over 4,000 employees at its most glorious moments of growth, it’s not clear how many are left after several stores were closed, prompting an exodus of workers in the last six months.