Photo: Nation

Kenya Airways (file photo): The company says the retrenchment is aimed at controlling employment costs that have more than doubled over the last six years, from Sh6 billion in 2007 to Sh13.4 billion currently.

The Aviation and Allied Workers Union has vowed to contest plans by Kenya Airways to lay off employees. The union yesterday said it was finalising legal documents with its lawyers to move to court as soon as possible before the company starts to implement the retrenchment process scheduled take place this month. AAWU chairperson, Perpetua Mponjiwa, said on phone the objective of cutting costs given by the company is just an excuse as it has not fully explored other cost-cutting measures. "The company cannot say the staff costs are the reason for declining profits while it has been purchasing multiple Dreamliners," she said. Furthermore, the union says any increases in the wage bill are as a result of inflated payments to the management staff, not all staff.

About 3800 employees out of a total 4834 are on the Collective Bargaining Agreement, but Mpojiwa said these take only up to 21 per cent of the wage bill. "How can it be that 78 per cent of staff only take 21 per cent of the wage bill, they should cut on the management only," she said. Titus Naikuni, KQ CEO in the memo sent to staff on August 1 said the company could not sustain the large increase in headcount in 2011/12( recorded at 11 per cent) and significant staff annual salary increments. Naikuni also cited 'adjustments arising out of the job evaluation grade movements and costly decisions driven by tough CBA agreements' as other factors that are making its employee costs rise to unsustainable levels.

In the 2011/12 financial year KQ's profit after tax dropped by 53 per cent from Sh3.5 billion to Sh1.7 billion. "We will initially begin with a voluntary early retirement initiative but in the event that we do not get the required numbers then we will move on to the next step of identifying individuals to be retrenched," said Naikuni said in the memo titled 'Staff rationalisation exercise'. He did not disclose how many people they plan to shed off. The company is offering a severance package of three months salary in lieu of notice, 20 days salary for every year of service and payment for accrued leave days at the rate of 20.5 working days per month. "We are going to block it through a court order, our lawyers are finalising on it," the union representative also infuriated by the fact that it was not informed of the process beforehand.