Union wants retailer’s bosses barred from travel over pay dispute

Supermarket attendants sacked by the Kenyan subsidiary of troubled Botswana retailer Choppies want a local director and two foreign board members barred from travelling abroad until the dues of the affected workers are settled.

In a case filed last week, the workers through the Kenya Union of Commercial, Food and Allied Workers (KUCFAW) are seeking court orders barring Parin Patel and the foreigners, Ashwin Kshemendran and Mithun Gopalakrishnan, from leaving the country.

They say the retailer owes Sh26.8 million to 543 unionisable workers who were declared redundant.

They want Choppies to deposit the amount in an interest earning account to be overseen by the court or offer bank guarantees that the retailer will pay up if the workers win the court dispute.

“It would be extremely difficult for the affected employees to secure the benefits should the company fold. Save for Mr Patel who is a local director, Mr Ashwin and Mr Mithun are citizens of other countries,” KUCFAW secretary-general Boniface Kavuvi swore in an affidavit.

While still new in the Kenyan market, Choppies signed a Collective Bargaining Agreement in 2016 that came into effect in September 2017, setting set out the terms for redundancy.

Thereafter, the retailer was unable to access bank loans and led to stock-outs as a result of which it posted a loss of Sh248.7 million, according to the delayed 2018 results. Choppies closed down outlets in Kiambu, Nanyuki and Bungoma as it grappled with rising operational costs.

The retailer, which took over the branch network of ailing Ukwala Supermarkets, has announced plans to halve its 15 stores as it struggles to grow market share in an increasingly competitive retail market.

“The group has decided to downscale the business in Kenya region by reducing the number of stores to nine from 15,” Choppies said.

“Offers are already in place for two stores and initial discussions are happening for the other stores. This decision has been taken due to the ongoing distressed business in Kenya”.

To survive, Choppies decided to reduce staff numbers to limit expenditure while it sought short-term loans to stay afloat.

Mr Kavuvi says that on August 31, 2019 the retailer served the union with a redundancy notice targeting 188 employees, only to serve another notice in November targeting to cut 543 jobs that triggered the current suit.

“There is a possible likelihood that the respondent may fold up its operations and declare all the remaining 233 employees, including middle level management, redundant,” Mr Kavuvi said.

Accumulated losses and overheads have forced Choppies to write off Sh1.6 billion in the financial year ending June 30, 2019.

The retailer has been surviving on short-term loans, including a Sh250 million overdraft from I&M Bank Limited, borrowed in June and a Sh300 million loan from Barclays Bank Kenya Limited taken in August 2018.

In August, the retailer took out a short-term loan of Sh400 million ($4 million) for working capital from its local partners, which could be converted into equity if the retailer defaults.