What you need to know:
- KQ’s employment costs have more than doubled over the past six years – from Sh6bn in 2007 to Sh13.4bn in 2012.
- Number of Kenyan employees has grown from 3,729 to 4,170 during the same period. Overseas employees have risen from 425 to 664.
- Recently, the airline outsourced a section of its staff, most of whom will be expected to run the yet-to-be launched low-cost subsidiary, Jambo Jet.
- Labour consists of one of the biggest costs of the airline after fuel.
- Airline has also been grappling with rising competition.
- A report by Renaissance Capital says the airline has more employees than the industry benchmark.
- Its total number of employees stands at 4,834 — about 1,800 more than the benchmark.
Employees of national carrier Kenya Airways have suffered a setback after a court lifted an injunction that had prevented their employer from sacking them.
The fate of the workers, who had obtained a restraining order against their employer at the Industrial Court, now hangs in the balance. They have, however, petitioned the government to intervene.
Kenya Airways plans to reorganise its operations and staffing, which would see some of the roles rendered redundant and about 650 employees sent home.
Giving the airline the green light to continue with the exercise, the court said interim orders can last only 14 days, a period that had expired.
The workers union, Aviation and Allied Workers Union (AAWU), said they would contest the ruling. On Thursday, the union petitioned the office of the Prime Minister to intervene.
“Kenya Airways informed us that it wants to retrench 650 people but it did not disclose how many are union members and how many are non unionisable. We want to meet the management before deciding on the next course of action. But, to begin with, we plan to contest the ruling,” Mr Nicholas Baraza, AAWU secretary general, said on phone.
Contacted, the airline declined to confirm the numbers it plans to send home on grounds that though the court had lifted the orders, the matter had not been fully heard and determined. The case is expected to come up for hearing on September 10.
The airline on August 3 announced the terms of its staff rationalisation programme which will start with a voluntary early retirement programme followed by a redundancy programme. It cited the need to ensure sustainability of its business.
This prompted the workers’ union to move to the industrial court seeking to stop the programme on grounds that the airline had breached the labour relations act that require a firm to engage workers through their union before terminating their services.
The court had temporarily granted the orders which were lifted on Thursday.
The union also said the notice for applications for voluntary retirement was too short.
It added that the notice contravened a collective bargaining agreement and a recognition agreement between the workers and the airline.
The union also said the workers had used their employment as a guarantee for loans and mortgages they had obtained from financial institutions, and that the restructuring violated the Labour Relations Act.
“Despite various initiatives that we have put in place, our cost base continue to be extremely high. This, coupled with other direct operating costs, have put pressure on our contribution margin, reducing our overall ability to operate profitably,” the airline’s chief executive, Dr Titus Naikuni, said in a statement early this month.
Dr Naikuni said the decision — made by the airline’s board of directors following a harsh operating environment currently characterised by a downturn in passenger volumes, declining revenues, unstable fuel prices and an increasingly competitive environment.
Dr Naikuni said the exercise started on August 1, 2012, owing to a large increase in headcount in 2011/12, significant annual staff salary increments, and costly decisions driven by collective bargaining agreements with the union, all of which drove up labour costs.