Court forces Tuskys into negotiations on staff pay cuts

The Employment and Labour Relations Court has forced Tuskys to negotiate planned pay cuts with staff after the retailer’s unionised employees challenged the nature of salary reductions effected in April.

In his ruling made on Friday, Judge Bryam Ongaya restrained the retailer from effecting any further wage reduction on its unionised staff prior to consultations.

Further, Tuskys will be forced to reimburse withheld salaries to the staff members should it fail to reach an amicable agreement on the planned salary reductions within 10-days from the ruling made on July 10.

Tuskys unionised staff challenged the unilateral decision to trim pay through the Kenya Union of Commercial Food and Allied Workers (KUCFAW) prior to employee engagement.

“The Covid-19 situation which has been experienced by the workers should not be used by the respondent to unilaterally alter the terms of service,” the workers noted in their application to the court.

Tuskys has sort to trim pay to staff by between 20 and 30 percent through the reduction of employee work hours from 45 a week to 36.

In its counter argument, Tuskys said its Ksh.200 million monthly wage bill to its estimated 6,000 staff members had become untenable as COVID-19 mitigation measures reduced working hours in malls and shopping centres.

According to the retailer, the chain’s sales dropped by 35 percent across April and May prompting management to take urgent remedial measures as they stare at a crisis.

Tuskys warned of more brutal measures as an alternative to cuts on staff pay including the closure of more branches and more redundancies as it sighted unforeseeable and unavoidable acts of God/ force majeure in its prompt cut to salaries.

The Labour court however deemed the force majeure application as premature as its contractual engagement with unionised staff lacked the provision.

The court has now challenged both parties to embrace social dialogue as provided for by a recent memorandum of understanding (MOU) between the Labour Ministry, the Central Organisation of Trade Unions (COTU) and the Federation of Kenyan Employers (FKE) to reach an amicable resolution of the dispute.

The MOU provides for negotiations including the suspension of the implementation of Collective Bargain Agreements (CBAs) and a freeze on wage increments during the COVID-19 period.

KUCFAW fallout with the retailer emerged as Tuskys sought to declare 80 unionised employees redundant following the recent closure of four of its outlets in Mombasa, Nairobi and Kitale.