NAIROBI: Telkom Kenya Ltd has agreed to pay its former employees retrenched in 2006 Sh1.4 billion.
In a signed deal between the company's lawyers and those representing the former employees, it was agreed that Telkom woulf pay the retrenched 996 employees Sh1,237,44,780 as severance money.
The former employees will also be entitled to Sh150,000 golden handshake.
"The net sum payable to the claimants after deduction of all outstanding liabilities, amounts paid on retrenchment and applicable taxes is Sh1,022,437,166," the agreement reads in part.
The company will also pay an additional Sh300 million as the cost of the suit.
"Telkom shall deduct from the payments due to each former employee the money paid to them in 2006 upon their retrenchment and no interest would be charged on the payments," the agreement says.
The pay will, however, be less statutory deductions.
The other deductions Telkom will effect include all loans owed by the former employees, unless they produce documentary evidence of having offset the debts.
The employees, who lost their jobs in phase one of the compulsory retirement programme undertaken by the company in 2006, won the case in 2011, but the firm appealed the decision.
In their submissions before a three-judge Bench, the former employees argued that Telkom had discriminated against them in awarding of the golden handshake.
The former employees, aged over 50 years, submitted that the company had declined to pay them the Sh150,000, but paid the same amount to employees below 50 years.
Through lawyer Anthony Oluoch, the former workers argued that the company had claimed they were not entitled to equal treatment, but had failed to cite or refer to any law to support its position.
"In so doing, the appellant denies there was discrimination and at the same time stating that the law allows discrimination," they submitted.
The employees argued that categorising of employees according to years of service or grade was done for orderly implementation of retrenchment, but noted that the law did not permit discriminatory treatment of employees based on their age.
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Telkom Kenya is currently the sole provider of landline phone services in Kenya.