THE government has defended the sacking of 600 Kenya Airways employees. Finance PS said the the sackings were necessary for the airline to "maximise on the taxpayer's investments".
Finance PS Joseph Kinyua said the airline is projected to save up Sh1billion annually once the retrenchment is completed. "The decision to lay off the employees was a policy of the board and the process was guided by the operations of the airline," he said.
Kinyua told a Parliamentary Committee on Labour and Social Welfare that the retrenchment was necessitated by the soaring oil prices. "The global aviation industry has gone through turmoil since 2007. It has been in recession since which has translated into compressed markets," said Vincent Rague, a senior financial advisor at the treasury.
Rague, who sits on the KQ board as alternate to Kinyua, said retrenchment was not taken lightly by the board but it was necessary in the greater need balance the interests of the employees and those of investors.
"We had to make a choice based on the realities of the market. We had to bear in mind the well being of the shareholders," he said. However both Kinyua and Rague found themselves in trouble with committees members when they said the treasury's core mandate in KQ was not labour related.
MPs Charles Keter, Oyugi Maganga, Alfred Odhaimbo and Pollyns Ochieng accused treasury of doing little to represent the government interests on the KG Board
"We don't represent the interests of workers on the Board," Kinyua said, "Our interest is more on commercial and policy aspects to ensure that there are maximum returns on the investment."
He said where Human resource issues impact on the airline's profitability, the management is at liberty to take decisions they deem fit, but they must follow the law."