Uchumi Supermarket employees will be paid their May salaries today, while June salaries will be paid outfrom July 14. In a return to work agreement signed yesterday evening, the management agreed not to victimise employees who had downed their tools to protest two months’ unpaid salaries.
The staff are expected to resume duty immediately. Early yesterday, they marched to the retailer’s headquarters demanded to know what is going on with the giant retailer.
“We have not received any proper communication from the human resource department, and staff who have raised complaints are threatened with disciplinary actions,’’chairman of Uchumi workers union, Alfred Kitivi told the Star.
The government has a 14.67 per cent stake in the retailer, only second to Jamii Bora Bank which commands a 14.90 per cent of total shares. The more than 1200 employees matched to the retailer’s headquarters along Mombasa road, and vowed not to return to work unless their plight is addressed.
Besides salaries, shelves at Uchumi are running empty. A spot check at the busy Sarit Centre branch in Nairobi paints a picture of a struggling firm. The groceries section is a pale shadow of its former status. There was no single packet of maize flour on the shelves at the time of the visit.
A supervisor at one of the branches in the city revealed that suppliers were on a go-slow following months of unpaid supply.
Unlike other staff at the firm, supervisors are not allowed to join the union and are forced to comply with management’s directives. He said that most employees have been kicked out of their homes due to rent arrears.
This is not the first time Uchumi is finding itself in a liquidity crisis. Mid last year, the Nairobi Securities Exchange-listed retailer closed down five branches, declaring 253 employees redundant in what CEO Julius Kipng’etich termed a move to optimize operations for maximum gain.
It later requested for a Sh1.8 billion government bailout, of which Sh1.2 billion has already been disbursed.
The first Sh500 million was issued in January, Sh700 billion was released in May to support its operations, and Sh600 million will be disbursed at later date to offset supplier debts in Uganda and Kenya.
The retailer sold its Ngong Road facility for Sh1 billion to a betting firm and used the proceeds to reduce a loan owed to KCB Group. Union members disrupted a meeting leading to a and signing a return to work formula late yesterday.