Telkom Kenya's Retrenchment Plan Hit By Cash Shortage in Kenya

Telecoms

Government delays in paying its contribution to the agreed retrenchment package seem to be at the root of the non-payment of salaries to workers who have been made redundant.

The 3,200 former employees, whose last working day was February 8, had been scheduled to receive their pay cheques from this week after clearance. But this has not happened. "We can't pay the whole amount now since the Government is yet to hand in the cash for the dues as earlier agreed ," said Dr Meshak Nyambati, a member of the company's board.

Under the agreed compensation package, each worker was to get two months salary, two and half month's salary for every year worked, a golden hand shake of Sh150,000 and a transport allowance of Sh40,000. The payment, amounting to Sh3.8 billion was to be shouldered by the Government in a deal struck ahead of the company's privatisation in December.

Under the deal, the Government was to settle the lay off costs among other debts totalling Sh69 billion in exchange for Telkom Kenya's 60 per cent shareholding in Safaricom.

Telkom Kenya's management insists they can only pay Sh1.5 billion for the retrenchment costs, promising to clear the deficit once the money is available. The Government, according to Telkom Kenya, has promised to settle the bill by June.

Business Daily