Kenya’s cash strapped retailer plan to layoff 800 staff sparks vicious fight with the staff union

Nakumatt administrator, Peter Kahi, said the layoffs are in line with the rescue plan he has crafted for the business that nearly collapsed under the weight of debt.

Nakumatt administrator, Peter Kahi, said the layoffs are in line with the rescue plan he has crafted for the business that nearly collapsed under the weight of debt.

“As part of the business recovery strategy, we have commenced a rightsizing exercise. This exercise is geared to aligning the human resource base with the current organisational needs,” Said Mr Kahi.

Nakumatt had “over 4,000 employees” at the height of its growth but the retailer has suffered mass exodus of workers in the past six months as it stumbled to near collapse.

Mr Kahi said the retail chain’s business is currently revolving around 13 branches, but it continues to carry a workforce to run 45 branches necessitating the trimming of staff numbers.

The layoffs will largely cover staff members, who had earlier been sent on compulsory leave.

“This disengagement though unintended provides a suitable platform for the business to strike a delicate balance,” he said, adding that “continued retention of workers under compulsory leave terms is not a sustainable option.”

The union representing Nakumatt staff has however reacted angrily to the retrenchment plans and accused the administrator of breaching labour laws and a Collective Bargaining Agreement (CBA) reached with the workers.

Kenya Union of Commercial, Food and Allied Workers (Kucfaw) secretary-general Boniface Kavuvi said the Nakumatt administrator had issued the sackings notice on account of insolvency, a declaration he said Nakumatt has not obtained as required by law.

Mr Kivuva said, sending workers home on account of insolvency amounted to a well calculated scheme to avoid payment of terminal benefits.

“We will not allow the administrator to circumvent the law. We are moving to court to oppose this,” said Mr Kivuva.

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