The merger of QuickMart and Tumaini supermarkets has hit a snag after the labour court stopped the firms from laying off some of their employees as they seek to form a single retail operation.
Employment and labour relations court ordered Tumaini and QuickMart to instead look for ways to integrate the 447 employees from both entities pending further court orders and inter-parties hearing slated for next month.
The court, responding to an application for order filed by Kenya Union of Commercial Food and Allied Workers (KUCFAW), ordered the companies not to victimise any of their employees on the account of being union members.
The case follows the move to merge the retailers. Special purpose vehicle controlled by private equity firm Adenia Partners, Sokoni Retail Kenya, earlier in the year concluded a deal to acquire a majority stake at emerging supermarket QuickMart.
Sokoni had made a similar move which saw it take over the operations of Tumaini last year.
Tumaini and QuickMart are set to make a single retail operation that will give the investor a stronger footing in Kenya’s competitive formal retail space. However, there are fears that the merger is likely to result in job losses.
The orders delivered last week by Lady Justice Maureen Onyango stated in part: “That status quo pending now to be maintained pending inter-parties hearing of the application.
“That the respondents are further restrained from victimising, intimidating or disciplining or terminating the employees or any employee on account of union membership. That the application is fixed for inter-parties hearing on 22 January, 2020.”
The union in its application for order sought help in ensuring that the two entities continue assigning duties to the employees until the court delivers further orders. It also sought the court’s help in compelling Tumaini to sign a recognition agreement acknowledging the union and to have it conclude a collective bargaining agreement in 30 days.