Kenya Airways has been ordered to pay 447 former employees Sh1 billion for unlawful termination of their services.
A three judge bench of the Appeal Court comprising Erastus Githinji, David Maraga and Agnes Murgor ordered KQ to pay each of the employees equivalent of their six months salary plus three months salary for failing to give them notice before sacking them.
The judges held that the sacking of the KQ employees was unlawful as it not done procedurally. However the court noted that their retrenchment and reason for doing so was justifiable.
KQ had retrenched the employees saying it was going through financial hardship.
The national carrier shed 578 jobs last September to reduce its wage bill that had doubled from Sh6 billion in 2007 to Sh13.4 billion in 2013. The workers opposed the job cuts in court while another 131 workers accepted the layoff plan.
The number of Kenyan employees in the firm had grown from 3,729 to 4,170 during the period while that of foreign staff rose from 425 to 664.
In December last year, the workers got a relief when the Industrial Court ordered KQ to re-hire the 447 workers who had moved to court, before the carrier appealed the decision.
In submissions made by the airline's lawyers, KQ said the action had saved the airline a monthly wage bill of Sh103.3 million and salary areas which had stood at Sh1.03 billion on a monthly basis.
"The carrier cannot sustain the ever rising wage bill," the lawyers said in an affidavit submitted during proceedings.
On Wednesday, Aviation and Airports Workers Union which had the 447 former employees as it members moved to court to bar KQ from entering into any agreement with a new trade union - Kenya Aviation Workers Union.
Judge Nzioki Makau of the Industrial Court issued the orders after AAWU accused the airline of entering into a Collective Bargaining Agreement with the new union which is against which is contrary to section 54 of the Labour Relations Act.
AAWU, in a certificate of urgency, accused KQ of terminating its recognition and sacking 447 of their members under unclear circumstances.
In an affidavit, Bonne Barasa said the national carrier had stopped making deductions to AAWU and is instead channeling it to the new union.
Yesterday, Makau ordered that Kenya Airways channel all money deducted from unionisable workers to a third party account pending the determination of the case.