Monday, September 3, 2012

■ KENYA: Kenya Airways Layoffs Debacle takes new twist after revelations KQ execs were awarded 25% payrises over the last year.

Kenya AirwaysQuite a few eyebrows were raised in Nairobi during the presentation last week of Kenya Airways' (KQ) annual report in which it was revealed that executives' wages at the airline had risen by almost 25% over the last year; a development that comes at a time when the airline is facing protracted legal battles and now even Prime Ministerial condemnation over plans to lay off (or as KQ would prefer, "outsource") 650 'excess' employees cited by the company as being amongst the causes for their 57% slump in profits last year.

"Details in the national carrier’s annual report show that the annual pay of executive directors rose from Sh66 million to Sh82 million in the year ended March 2012. KQ’s annual report lists its executive directors as Titus Naikuni (CEO) and Alex Mbugua(group finance director)—and this means they shared a monthly package of Sh6.83 million, up from last year’s Sh5.5 million."

Kenyan Prime Minister Raila Odinga
Kenyan Prime Minister Raila Odinga
Most interestingly though, Kenyan Prime Minister Raila Odinga waded into the debacle by directing KQ's management to halt with their lay offs a day after the the Industrial Court in Nairobi ruled that they could, infact, proceed. 

In a letter written by the Kenyan Permanent Secretary at the Prime Minister’s Office, Mohamed Isahakia, to the Transport Permanent Secretary, Cyrus Njiru, Odinga wants to ascertain if and how the company has engaged the Aviation and Allied Workers Union (AAWU) in discussions over the planned staff lay offs, and to investigate whether or not the rationalization programme committee had explored all available options for reducing KQ's wage bill, including introducing pay cuts.
"Employees of Kenyan origin are facing retrenchment while jobs for foreign nationals performing similar duties are protected. In the recent past, similar Public Companies such as Orange Telkom Kenya that have undertaken massive employee retrenchment entered into negotiation with the workers union and agreed on a settlement package that was mutually acceptable to both parties and the Government."
Source [The Nation]

Whilst a Government minister sticking his nose into a company's redundancy drive is hardly anything new in Africa, the fact of the matter is that Kenya Airways is no longer a government department subject to the whims of politicians; with 29.8% of Kenya Airways' shares, the Kenyan Government does have a say, albeit in tandem with other shareholders, and with the layoffs having been a board decision, there must have been at least some governmental complicity in its taking.
So here we have it: an "Occupy Wallstreet" paradigm if you will - without the smelly hippies though. On one hand, a company's labour force facing redundancy owing to it taking a huge knock in profits, while the company's execs reward themselves handsomely with performance related bonuses. 

Perhaps Odinga really does have a point? Or is he simply scoring cheap political mileage in an election year...