Retail chain outlets Tumaini and Quickmart have been barred from firing 447 employees, throwing a spanner in the works for the ongoing merger talks between the two firms.
The Employment and Labour Relations Court yesterday 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.
Sokoni last year acquired Tumaini taking control of the retailer’s 13 outlets located in Nairobi, Kisumu, Kajiado and Kisumu.
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 Sh1 billion in annual turnover.
In giving the merger a clean bill of health, Competition Authority of Kenya stated the proposed transaction is unlikely to lead to distressed competition in the retail sector or negative public interest concerns.
However, employees of Tumaini Supermarket 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, 2019.
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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