What you need to know:
- In case No 2119 of 2014, the Kenya Chemical and Allied workers Union, Ms Juliet Kipchumba and 228 grievants took Portland to the Employment and Labour Relations Court, seeking the decretal award.
- A total of 520 workers were sent packing after the expiry of their contracts while a handful are still working under new contracts and terms.
A longstanding case against the East African Portland Cement Company has returned to haunt it after a court ordered ex-employees to attach moveable properties to recover their Sh1.4 billion.
In case No 2119 of 2014, the Kenya Chemical and Allied workers Union, Ms Juliet Kipchumba and 228 grievants took Portland to the Employment and Labour Relations Court, seeking the decretal award.
The contracted employees argued that there were wide discrepancies in remuneration between them and their permanent counterparts in the same jobs, despite a 2012 Collective Bargaining Agreement reached between the company and the workers’ union.
A total of 520 workers were sent packing after the expiry of their contracts while a handful are still working under new contracts and terms.
According to court papers obtained by the Nation, the judgment was given on August 2, 2015 by Justice Ngibuini Mwaure, who awarded the grievants Sh1,401,585,364.80. In 2015, Portland filed an appeal but it was dismissed on October 6, 2017.
For the past nine years, Portland has paid only Sh90,000,000 that was shared among the grievants. On August 2, 2018, the court certified the outstanding balance at Sh 1,401,585364.80.
Despite the warring parties agreement on how the balance would be settled and the consent’s adoption by the court, as an order of the court on January 13, 2020, Portland did not honour the agreement.
According to the court order, Portland was to settle the balance from monies arising from the sale of L.R NO 8786 and L.R No 8784/4. However the monies were to be used to repay a Sh6.6billion loan at the Kenya Commercial bank.
In 2020, Portland surrendered 745 acres of its Mavoko land to KCB for Sh5 billion. The balance was later settled.
The order further said in case the proceeds of the properties’ sale was not sufficient to offset the balance, or the properties were not sold, Portland would find alternative sources of funds to offset the entire balance.
The court observed that the applicant company was unable or unwilling to settle the balance from the sale of agreement.
Instead, Portland offered to settle the decretal sum in equal installments of Sh12,500,000 on March 31 and the same amounts on December 31, and the balance in equal installments between 2024 and 2027, out of proceeds of properties LR no 10428/18,10424/19, 20, 21, 22, and 27.
The court rejected the offer and demanded a reasonable proposal of not less than Sh50,000,000 per month.
On March 23, Judge Anna Ngibuini Mwuare, in a virtually delivered judgment, allowed the claimant the liberty to execute for the balance.
"The court finds the only fair solution is to go by the consent provision that “in default of the 1st respondent complying with clause 7 and 8, the claimant be at liberty to execute for the balance,” read the ruling.
On May 16, the court allowed Gichuki King'ara & Co. Advocates to go on record for 210 grievants and allowed the execution to proceed as against the judgment debtor.
The court further allowed the firm to attach and sell the judgment debtor's moveable properties on behalf of 60 grievants. The remaining 150 grievants were to seek execution by other means as the moveables could not fetch the entire award.
The total amount to be recovered includes Sh55,413,960.20 as the principal amount and Sh60,124,146.80 as interest from August 2, 2018 to date, amounting to sh 115,538,107.02 in total.
Following the new development, Portland management has put the Athi River plant under lock and key.
For the last five days, the main gate has been manned by armed police officers around the clock and no visitors are allowed past the gate, to ensure auctioneers do not get access.
A Nation spot check on Friday found minimal activities at the main gate. No vehicles or visitors were allowed in and members of staff underwent intense frisking before walking in.
A senior supervisor told the Nation in confidence that Portland is choking on debt, watering down implementation of a five-year turnaround plan.
''The government ought to intervene to settle some of the longstanding debts. The debts might bring the company on its knees despite strides made in the last one year towards its recovery,” he said
The Nairobi Securities Exchange-listed company has been able to reduce the debt from Sh14 billion in 2019 to Sh8 billion this year.
The company owes creditors and debtors a staggering Sh12.9B according to the management.
Chief executive Oliver Kirubai was not immediately available for comment.