The move may open a fresh battlefront with the workers’ union. The court had on Monday ordered the airline to reinstate the workers, saying it did not follow the procedure when terminating their employment.
Mr Moss Ndiema, the chairman of Association of Aviation Workers’ Union (AAWU), said the management of Kenya Airways had agreed to take back all the employees in their former positions, and their re-appointment letters would be ready within the week.
“It has been agreed that all employees will assume their previous roles in the company,” said Ndiema.
Although the Monday court ruling came too late for the stock market, the airline’s share price fell 9.5 per cent when trading resumed yesterday at the Nairobi Securities Exchange (NSE), its lowest in eight years, reflecting investors’ concerns over the expected rise in the airline’s wage bill.
Of immediate worry to investors is Kenya Airways’ long-term cost management. The airline had expected to save as much as Sh1.2 billion by retrenching 545 workers, 98 of whom opted for early retirement.
Reinstatement letters
“The employees who reported to work this morning (yesterday) as directed by the court are now in the process of being issued with reinstatement letters and will be sent on leave awaiting redeployment,” Naikuni said in a statement.
He said they would study the court ruling and its implications before advising on the “next steps”, but did not say whether they would appeal the ruling.
AAWU had earlier in the day contested the proposal by the management to ‘redeploy’ the reinstated staff, saying it would allow the airline to absorb them in different positions than what they held prior to the sacking.
Judge James Rika had on Monday rejected Kenya Airways’ application for a stay of orders reinstating the sacked workers in a ruling that found the termination process to have been unfair.
The ruling has raised concerns from business executives who say that the court system had ignored the interests of corporations, in this case Kenya Airways.
Richard Etemesi, the CEO of Standard Chartered Bank (Kenya), ridiculed the ruling on his official twitter account saying, “...courts have become experts in business trends and that employee interests supersede those of shareholders. Corporates be very afraid!”
Kenya Airways planned to spend Sh800 million on the retrenchment, but the union says that about 80 per cent of its members had turned down its severance package.
Already, the airline has reported a Sh4.8 billion loss in its half year ended September due to high fuel and operating costs, with the reinstatement expected to worsen the financial position of the airline.
The airline had hoped to cuts its annual wage bill in the retrenchment although some opted out through a voluntary early retirement scheme.
Prior to the latest reinstatement, Kenya Airways had issued a profit warning that its full year performance would be worse by at least 25 per cent compared to the period ended March 2012.
The Government owns 29.8 per cent of the national carrier.
-The Standard Digital
