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Telkom Kenya allowed to challenge Sh3.2 billion award

BUSINESS
By Kamau Muthoni | May 16th 2015
Telkom Orange shop

More than 900 former Telkom Kenya employees now tag their hopes with the highest court in the land if they are to pocket Sh3.2 billion.

The workers had asked the court to dismiss their former employer’s application for an appeal of a ruling delivered by Appellate Court that they should be paid severance pay and golden handshake. Supreme Court Judges Phillip Tunoi, Smokin Wanjala, Mohamed Ibrahim, Njoki Ndungu and Jackton Ojwang ruled that the employees had not demonstrated how they arrived at the huge package.

The judges allowed the company to appeal the award. They, however, held that the workers had an argument that would not be dismissed. The employees, who lost their jobs in phase one of the compulsory retirement programme undertaken in 2006, won the case in 2011, but the firm appealed the decision.

When the case went to the High Court, the 996 employees were each awarded Sh150,000 on grounds that the company discriminated against them on the basis of age after they received lower packages compared to those under 50 years. In total, Telkom was to pay Sh1,022,437,166.

“It is clear to us that the dominant issue in this matter relates to discrimination, which appears from the very nature of things, set to affect considerable number of persons in general, or as litigants. We find that the issue whether differential treatment amounted to discrimination in this matter, is a cardinal issue of law, and one of general public importance, requiring the further input and final resolution by this Court,” the judges ruled.

French investors

At the Appellate Court, the amount increased to Sh3.2 billion and the company sought the last legal resort which was denied by the court. It however, moved to the Supreme Court, which will now adjudicate whether it ought to pay.

“To require the deposit of such a large amount of money by the applicant, without any legal justification, would impede the right of access to justice, in terms of Article 48 of the Constitution. We are not persuaded that the respondents (employees) will suffer irreparable loss if leave is granted, and the applicant (Telkom) is transferred to another company pending the outcome of the appeal,” the Supreme Court judges ruled.

The workers had argued that Telkom Kenya was already struggling financially and thus it would have been unjust to set aside the decision by the Appeal Court. The court heard that the company was dependent on loans from subsidiaries of another company, France Telkom. The court heard that there was a possibility that the company would be transferred to the French investors which would allegedly lock all doors for compensation.

France Telecom bought the majority stake in struggling Telkom Kenya in 2007 with an aim of turning around its dipping fortunes. The Telco however did not rise in a streak of seven years period. It did not manage to pull up its might against the market leader Safaricom.

“The laws that govern such transfers do take into account any legal suits pending at the time of transfer, safeguarding the interests of the respondents (employees) in the event the appeal fails,” the judges held. Telkom was also allowed to file a notice of appeal within 14 days.

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