VENTURES AFRICA – Kenya Airways has been ordered by a Kenyan court to reinstate 475 dismissed workers, undoing the airline’s efforts to cut rising wage and fuel costs.
The carrier earlier this year terminated 600 employment contracts as the company looked for avenues for cost cuttings in response to dwindling profit margins.
A falling traveller base prompted in particular by European economic woes, and rising fuel prices, have left the airline – which is partially owned by Air France-KLM, which holds a 26.7 percent stake in the company – in a weaker financial stake that it would like, and as such turned to personnel cuts in a bid to improve margins.
Wage costs had risen over the past six years, reaching 13.2 billion Kenyan Shillings ($153.5 million) – thus becoming a key area for potential savings through cut backs.
While some of the affected employees took voluntary retirement, 475 were made redundant by the airline; and it is these dismissed workers who took a legal route, launching a mass claim against the airline.
The court’s ruling handed down on Monday ordered the airline to reappoint the 475 terminated employees, agreeing with the plaintiffs that Kenya Airways failed to properly communicate with employees around the circumstances of their termination, and further finding that the terms of the dismissals had not been lawfully negotiated.
“The Kenya Airways management should respect the law and reinstate us since the court has denied them a stay against the ruling,” Perpetua Mponjiwa, one of the employees involved in the legal battle told Reuters.
Kenya Airways officials confirmed that they had received the judgment, which will no doubt put further pressure on the company’s financials, but declined to comment prior to the proper consideration by the company – noting that an official statement will be made shortly.