Uchumi Supermarket
employees countrywide have downed their tools in a demand for May and June salaries.
This comes less than a month
after the government
gave the retailer another Sh700 million in January as
a
shareholder loan. It had earlier given
Sh500 million.
The government has a 14.67 per cent stake in the retailer, second to Jamii Bora Bank which has 14.9
per cent shareholding.
In Nairobi, more than
1,200 employees marched to the retailer's headquarters along Mombasa Road, saying they will not return to work without pay.
Alfred
Kitivi, secretary general of
Kenya Union of Commercial Food and Allied Workers, said
the management has been asking employees to apply for salary advances of less than Sh10,000
''We have not received any proper communication from the human resources department and those who question are threatened with disciplinary action."
Uchumi, which has about 1,300 employees, has confirmed the salaries delay.
The chain has attributed this to cash flows problems that have rendered it unable to meet several other obligations.
Besides salaries, shelves at Uchumi are running empty. A spot check at the usually busy Sarit Centre branch painted the picture of a struggling firm.
The groceries section only had a few sticks of withering spinach, cabbages and onions.
There was no maize flour at the time but a shortage is largely to blame for this.
A mid-level supervisor at one of the city branches revealed suppliers were on a go slow following months of no pay.
Unlike other attendants , supervisors are not allowed to join the union so they must comply with management's directives.
The supervisor said most employees have reported being kicked kicked out of their homes due to rent arrears.
Calls to CEO Julius Kipng'etich went unanswered but Chief Operation Officer Peter Mbatia said he will issue a statement later today.
"CEO KIPNG'ETICH MUST RESIGN"
Uchumi's Moi Avenue branch is the only one at the Coast and has 42 workers.
Shop steward
George Oyugi
said the management has refused to hold talks with them and has threatened dismissal.
“We have not been paid for two months. Our May and June salaries have not reflected in our accounts yet the management has remained mum,” said Oyugi.
He noted they were promised the money would be wired by June 30.
Operations at the supermarket were paralysed, forcing senior workers in the management team to serve customers who trickled in.
The branch manager refused to speak to the media or address the workers who protested at the entrance to the supermarket.
“He has refused to come out. Let him come and address these issues,” said Oyugi.
The steward said workers countrywide downed their tools today over the salaries and
non-remittance of NHIF and NSSF contributions.
"Our pension has not been paid for the last year.
Overtime has also not been paid and instead of explaining the problem, the management is threatening us."
In Karatina town, at least 35 workers took to the streets over the salaries issue.
They waved placards and twigs and chanted slogans against Kipng'etich.
They later camped outside the branch.
James Mungai, KUCFAW
spokesman in the area, called for the reinstatement of former CEO Jonathan Ciano.
Read:
In Eldoret, workers also demanded Kipngetich's resignation.
KUCFAW
Eldoret branch secretary Josphat Oduor said the management has failed.
“Going without two months’ salaries is oppression of the highest order. We had agreed that they would pay us by May 30 and June 10 but they have not. Statutory deduction have not been remitted to the bank and we have now been blacklisted so we cannot get loans. That is why we are protesting," said Oduor.
“The CEO has failed the company...it is high time Kipng'etich vacated the office so we can have effective leadership and a vibrant workforce."
Branch shop steward David Machoka said:
“It is laughable that they have resorted to giving workers advance payments of as little as Sh1,000.That is not enough to meet our basic needs."
The workers said they have also been threatened with job losses should they carry on with the strike.
“The management has now threatened to sack us because of the strike. We gave notice but they did not respond. In May, we gave a third notice but they did not respond," said Machoka.
Branch manager Kelvin Olwango refused to comment on the matter saying the company policy does not allow him to.
SUPERMARKETS CRISIS DEEPENING
This is not the first time Uchumi is finding itself in a liquidity crisis.
Mid last year, the chain listed in the NSE
closed five branches, declaring 253 employees redundant in what CEO
Julius Kipngetich
terme a move to optimize operations for maximum gain.
It later requested a Sh1.8 billion government bailout, Sh1.2
billion
of which has been disbursed.
Some Sh500 million was issued in January
and
Sh700 billion
in May to support local operations. Another Sh600 million will be disbursed at later date to offset debts to suppliers in Kenya and Uganda.
Last year, Uchumi sold its Ngong Road branch premises in Nairobi for Sh1 billion,
to a betting firm,
and used the proceeds to pay part of a loan at KCB.
The cash-strapped retailer was declared insolvent on
May 30,
2006 and subsequently suspended from trading at the Nairobi Securities Exchange.
It was readmitted to the Nairobi bourse
in
2011, having received Sh675 million from taxpayers in a recovery plan fronted by the government, and a further conversion of supplier debts to equity.
The retailer was placed under statutory management between 2006 and 2011 under the weight of a Sh956 million loan owed to KCB and PTA.
Uchumi's woes come while major retailer Nakumatt is on its knees.
Last week, the private chaim with operations in East Africa closed three branches in Uganda.
On Monday, Nakumatt
moved to to court to block Thika Road Mall (TRM) owners from seizing its assets over rent arrears.
Nakumatt, Kenya’s largest retailer, has not paid its 1,555 employees their May salaries.
It is said to have sent more than 100 workers on compulsory leave citing low business volumes.
Also read:
Reporting by NANCY AGUTU @NancyAgutu, STANLEY MAGUT@mgtstan, WAMBUGU KANYI @joewwmbugu2003 and VICTOR AMADALA