The Employment and Labour Relations Court on Friday ordered retail chain outlets Tumaini and Quickmart not to fire 447 employees.
The two firms are planning a merger and letting-go-off some staff was in their plans to avoid redundancy.
Lady Justice Maureen Onyango ordered the two firms to retain the workers and conclude a collective bargaining agreement within the next month.
“Pending the hearing and determination of this matter, this honourouble court do and hereby restrains the 1st respondent from terminating the services of 447 employees on grounds of alleged change in staff management,” Justice Maureen Onyango ordered.
The court further ordered Quickmart and Tumaini to integrate their employees on the current terms and conditions of service arising from the merger and rebranding without outsourcing their jobs to third parties.
The ruling casts a shadow on the merger talks between the two companies.
In September, the two firms made a joint announcement revealing plans to form a special purpose vehicle, Sokoni Retail Kenya, under the control of Mauritius-based private equity firm Adenia Partners.
Tumaini which has 13 outlets located in Nairobi, Kisumu, Kajiado and Kisumu was acquired by Sokoni last year.
In the proposed merger between Quickmart and Tumaini, Sokoni is expected to take up 100 per cent shareholding in Quickmart, forming a giant retailer with more than Ksh1 billion in annual turnover.
The Competition Authority gave the merger an okay stating that the merger was unlikely to lead to distressed competition in the retail sector or negative public interest concerns. However, staff at Tumaini weren’t so sure about their jobs, and accused the management of victimising them on the basis of union membership and failing to enact a collective bargaining agreement.
Tumani Supermarket is now required to sign a recognition agreement and conclude a collective bargaining agreement with the employees by January 17, 2020.
Tumaini was also ordered to hand over its staff to Quickmart in the event the firm seeks to close down operations before then. The case will be heard on January 22nd 2020.
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