80 unionisable workers of struggling retailer, Tuskys, have been dealt a huge blow after the Employment and Labour Relations Court dismissed a case challenging planned layoffs.
The case had been filed by the Kenya Union of Commercial, Food and Allied Workers (KUCFAW), who termed the layoffs illegal and unprocedural.
The 80 staffers stationed at the retailer’s Mombasa, Kilifi, Nairobi CBD and Kitale branches were among 174 employees who were declared redundant in May 2020, as part of efforts by the supermarket to stay afloat amid dwindling fortunes.
In the case, the union argued that the decision to terminate the unionisable employees’ contracts had already been arrived at prior to the supermarket’s decision to declare the positions redundant.
The union further argued that the retailer’s intention was to work with outsourced labour, a move it termed as unfair, discriminatory and unlawful.
But in a ruling delivered by Justice Maureen Onyango, the judge noted that the management had complied with the law in declaring the staffers redundant after issuing notice of intention to close its branches at Digo Road in Mombasa, Mtwapa in Kilifi, Tom Mboya in Nairobi CBD and Megacity in Kitale.
The notices, the judge said, were sent to the County Labour Officer and the union on May 22, 2020.
The redundancies were to be effected on June 20, 2020.
“The notices thus complied with Section 40(1)(a) in terms of notification to the union and local labour officer, giving reasons and extent of the redundancy. The letters addressed to the individual employees were also copied to the local labour officer and the union and therefore were in compliance with the law,” said the judge.
In the case, Tuskys detailed its financial crisis that has over the recent past seen some of its branches risk auction over rent arrears and trouble paying suppliers.
The supermarket argued that the financial troubles had left it on the brink of insolvency and liquidation.
The court also declined to issue orders blocking Tuskys from terminating employees’ contracts due to effects of the Covid-19 pandemic on its operations.
The retailer owes creditors at least Ksh6 billion and is banking on a Ksh2 billion from a Mauritius-based investor to turn around things.