More than 400 SportPesa employees, who were rendered jobless on October 2 after their contracts were terminated, were on Friday, November 1, issued with redundancy notices.
The meeting was called by the firm’s head of human resources, Terry Wanja Njagi, via an email dated Thursday, October 31, and addressed to all ex-staff members.
And, in their hundreds, the former employees of Kenya’s leading betting firm trooped to the Chancery Building on Valley Road, Nairobi on Friday ahead of the 11am convention that they hoped would see them get their jobs back.
However, that did not happen.
Sources told K24 Digital that the meeting, which lasted less than 20 minutes, yielded only one message: that all the employees’ termination letters have been withdrawn, and replaced with redundancy letters.
“They [SportPesa management] did not give us the information we expected [that we’ll have our jobs back]. In the extremely brief meeting, they said that our termination letters were withdrawn, and that we will, instead, be served with redundancy notices as the Kenyan labour law demands,” said an informant, who spoke to K24 Digital on condition of anonymity.
In an October 31 letter to the employees seen by K24 Digital, the company’s CEO Captain Ronald Karauri said: “We refer you to our notice of termination of employment dated October 2, 2019. By copy of this letter, please consider the said-notice withdrawn with immediate effect and the content therein nullified.”
In an interview with The Star on Thursday, Karauri said the move was meant to cushion the company against potential lawsuits.
“We are basically being advised to issue proper and legal notices even as we wait for the Betting Control and Licensing Board to act on our application,” Karauri told the publication.
Redundancy procedure in Kenya
Section 2 of Kenya’s Employment Act 2007 defines redundancy as the loss of an employee’s occupation, job or career through the employer’s initiative where the services of the employee are no longer needed due to various reasons.
Examples of instances when an organisation can declare a position in the company redundant are: If the firm is closing the business because of various reasons such as financial challenges and if the company is trying to reduce its workforce or even doing a reorganising of the entire office.
The Employment Act 2007 prohibits companies from declaring their employees redundant today and sending them home the next day.
The redundancy procedure begins with notifying employee(s) in writing that a company wishes to declare them redundant.
According to the Employment Act, you are required to give the employee together with their union or labour officer a written notification at least one month before the said redundancy begins.
The second step involves giving out clear reasons why the position is being declared redundant. This has to be explained in a written form why an organisation is terminating the employee’s contract and give good reasons why that position is being considered less needed in the company.
The written notice should also have the date on which the services of the employee cease to be needed due to the redundancy.
The third step is to select the employee(s) to be affected through a fair process. The formula a company uses to select an employee that will be affected by the redundancy process should be clearly outlined and documented in case of any challenges of lawsuits.
The fourth step is to settle the employee(s)’ dues. The employer in the case where leave is due to the employee, who is declared redundant, will pay off the leave in cash.
The Kenyan law on redundancy also stipulates that the employer will pay the employee declared redundant, not less than one month notice or one month’s wages in lieu of notice.
The employer is also expected to pay the employee declared redundant severance pay at the rate of not less than 15 days for each completed year of service.
Below is the redundancy procedure summary as outlined by Corporate Staffing:
- Notify all employees on the redundancy in writing.
- Select the employees to be affected after checking their abilities and skills using the same. criteria for all employees – process must be fair.
- Give a 30-day notification to the labour office, union and employee.
- Consult with the employees who will affected by the redundancy.
- Pay all pending leave in cash to the employee declared redundant.
- Finally, pay the redundant employees a severance pay of not less than 15 days’ pay for each year of completed year of complete service.
Who can be terminated on redundancy?
The most common reason companies choose to retrench employees is so as to cut costs – that is if the company is making losses and there is a need to restructure.
An employee is also cut in for job loss if their role is not bringing much in terms of productivity to the company.
What if an employee still feels aggrieved after being declared redundant?
Africapay.org says a worker may lodge a complaint with labour officer within three months from the date of the unfair termination.
If the termination was unjust, he/she may recommend the employer to pay wages for the notice period required to be given; the proportion of wages due for the period the employee has worked and any other loss consequent upon dismissal arising between the date of dismissal and the date of expiry of the notice period; and the equivalent of a number of months’ wages or salary for a period not exceeding 12 months based on the gross monthly wage or salary of the employee at the time of dismissal. All the amounts are subject to statutory deductions.
Where the labour officer finds the dismissal/termination unfair, he or she may recommend that the employer reinstates the worker and treat him or her as if the employment was never terminated, or re-engage the employee in work comparable to the one prior to his or her dismissal at the same wage.
What this means for SportPesa
The company will, therefore, have to give fresh redundancy notices to the employees, which should expire one month from the date they made their intentions known.
For instance, if the redundancy notices are dated November 1, then SportPesa will have to pay its employees full salaries for October and November.
The other payments to redundant employees, as outlined by Kenya’s Employment Act 2007, will also have to made.
On October 2, SportPesa announced that it was retrenching its 400-plus employees after it became “impossible” to continue paying salaries, yet its business had stalled in the country following an impasse with Government over tax remittance conflict.
The State said SportPesa owed the taxman at least Ksh14.9 billion in tax arrears, a claim that SportPesa CEO, Captain Ronald Karauri, refuted.