Court upholds Sh3.2bn payment for Telkom Kenya former workers

A Telkom Orange customer care shop in Nairobi. Telkom Kenya will have to pay former workers a Sh150 million award after the Court of Appeal on Friday dismissed a case the company had filed, seeking to overturn the High Court decision. Photo/FILE

By Hellen Githaiga

IN SUMMARY
The company had appealed the High Court decision arguing that the judge erred when he awarded golden handshake and severance pay to the 996 workers who were laid off in 2006.

Telkom Kenya will have to pay former workers a Sh3.2 billion award after the Court of Appeal on Friday dismissed a case the company had filed, seeking to overturn a High Court decision.

The company had appealed the High Court decision arguing that the judge erred when he awarded golden handshake and severance pay to the 996 workers who were laid off in 2006.

Each worker was to receive Sh150,000 according to the High Court ruling issued in 2011 and severance pay of two and half months of basic salary for each year worked.

“There is no reason to upset the decision of the High Court. The appeal fails and it is therefore dismissed,” ruled the judges.

The workers' lawyer Anthony Oluoch estimates that each worker will receive between Sh900,000 to Sh3.5 million as severance pay depending on the number of years worked. The total pay due to the workers cumulatively comes to Sh3.2 billion.

The Court of appeal agreed with the High Court ruling that the firm had discriminated against the workers on the basis of age.

The workers who took Telkom Kenya to court said that they had received lower packages compared to those under 50 years.

The company carried out massive retrenchment in two phases in 2006, which affected more than 11,000 employees.

Under the first phase, which was for employees aged above 50 years, the workers were paid severance payment of one month for every year remaining until retirement among other payments.

Under the second phase, which was for those below 50 years, employees were paid a golden handshake of Sh150,000 each in addition to other benefits paid to those affected in the first phase.

The workers aged above 50 years moved to court saying they were discriminated against on the basis of age and the High Court agreed with them that they were entitled to equal and fair treatment as regards the exit packages.

Telkom Kenya argued that the difference in the exit package was due to the accessibility to the pension benefits as those above 50 years have immediate access to pension as opposed to those below 50 years.