15 July 2017

Kenya: Nakumatt Employees Reject Plan On Weekly Pay

Employees of troubled retailer Nakumatt have rejected proposals to start paying them weekly wages in a new dispute that may stall operations in the struggling supermarket chain.

The workers are said to have refused to take a weekly wage offered this week, sparking a standoff with the management as fears emerged that there might be further delayed payments at the end of the month.

The workers, through the Kenya Union of Commercial Food and Allied Workers, wrote to Nakumatt's management asking it to rescind the decision immediately to conclude the ongoing negotiations on salary increment and the settling of pending arrears.


Insiders who spoke to the Nation alluded to a near-strike situation with a majority of the workers said to have been demoralised by a staff memo that sought to cut the number of working hours, effectively eliminating overtime which makes a significant part of their revenue, apart from the proposal to pay weekly.

"Your letter dated 27th June, 2017 on hours of duty intends to unilaterally review working hours without subjecting the same to a review process involving workers. This is not acceptable and will be seen as an attempt to violate agreed terms of service. Your letter under reference is, therefore, null and void," the union's secretary-general Boniface Kavuvi wrote.

The letter, also copied to the Labour Cabinet Secretary and the appointed conciliator Ms Hellen Manene from the ministry, also faulted Nakumatt for double inconsistency in the negotiations. The retailer has been accused of coming up with "surprise strategies" after asking for more time to consult on the negotiation table.


"We get our salaries through banks and some of us have loans and it will be a disaster if they start paying us weekly. They will be counted as different remittances in the accounts which will attract processing fees every week," said a worker based in a Nakumatt store in town.

The member of staff said: "Without overtime, some of us have no take-home, so, this could culminate in something never seen before in the history of our labour relations".

Mr Kavuvi dismissed allegations that the workers had planned to down their tools but said they "had made their point".


The workers say the new changes were arrived at without proper consultations. "Kindly be guided that the issue of salary payment is a matter which is lawfully guided and protected and not an issue where you can make proposals or act as you wish," read the letter.

Nakumatt resorted to weekly wages for its employees after its cash crisis deepened coupled with low sales and yawning shelves. The situation worsened after the retail chain closed three more outlets in Uganda as it continued to battle creditors, some of whom want to auction its property to recover money.


Nakumatt has lately suffered stock-out as suppliers hold on to their wares over non-payment of their dues. The retailer proposed weekly wages to spread the workers' salaries across the month as it resorted to surviving on daily sales.

"The management has reviewed salary payment plans with the intention of ensuring that every employee gets a percentage of his salary every week for a total of three weeks in a month. This is to ensure uniformity and consistency in the payment of salaries," Nakumatt managing director Atul Shah said in the memo.

Nakumatt had earlier confirmed having delayed some of its employees' pay since April, and has not remitted some statutory deductions, including pension cash.


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