A court has stopped alcohol maker London Distillers from declaring 394 of its employees redundant on account of harsh economic times caused by Covid-19 pandemic and closure of entertainment joints countrywide.
Justice Maureen Onyango said the order will remain in place pending determination of a case filed by the Kenya Union of Commercial Food and Allied Workers challenging the decision of the Athi River-based distillery to lay off employees.
Mohan Galot, a director at the distiller, which makes Kenya King, Napolean and Safari cane, told the court that their business has been ravaged by restrictions in bars.
He reckons that the firm has been forced to shed jobs to remain afloat. Beer and spirits manufacturers are betting on nations in the region relaxing measures to curb the spread of the virus to reverse drop in profits.
East African Breweries posted a three percent drop in net sales for its first half ended December as sales were pummelled by the closure of bars. Post-tax profit plunged by a third.
The company, which dominates the regional alcohol market with Tusker beer and Johnny Walker Scotch whiskey among other brands, turned to electronic commerce last year to prop up sales.
It set up an online distribution platform where consumers could order drinks, and partnered with firms like Glovo to deliver them straight to their homes.
London Distillers said it has been ravaged by Covid-19, and will not survive without the layoffs. But Justice Onyango noted that the company had not issued a notice of redundancy to either the union or the affected employees stationed in Nairobi, Kisumu, Eldoret, Nanyuki and Nakuru.
"Section 40(1)(a) provides that notice of redundancy where an employee is a member of a union should be issued to the union and the local Labour Officer at least one month prior to the redundancy,” said the judge.