Kenya Court Halts Unilever Voluntary Retirement Program

Kenya is experiencing a tense transition as owners of colonial-era tea plantations abandon tightly held vertical supply chains in favor of less expensive and more agile options for sourcing and processing tea. Unilever’s Kericho tea operations, which date to 1924, include 20 estates spanning 21,500 acres (8,700 hectares) and eight factories that produce 32 million kilos of tea annually. Unilever has a payroll of 12,000 permanent workers and 4,000-5,000 seasonal workers. Since March the company has offered what it calls a “strictly voluntary” separation program to non-management employees, many of whom have applied.

Last week labor leaders signaled their strong objections in press accounts that predicted 11,000 layoffs of Unilever’s 16,000 employees. Union leaders allege the program targets unionized employees. Unilever says the program is routine, designed to refresh the workforce and insists that there are no targets. “The tea workers’ union, however, reacted sharply to the retrenchment plan and accused the company of breaching labor laws,” according to Business Daily Africa. The union filed a complaint with the Employment and Labour Relations Court which issued an injunction last week halting the program until an Aug. 14 hearing. Kenya Plantation and Agricultural Workers Union assistant secretary-general Meshack Khisa said Unilever’s decision to send workers home amounts to involvement in “unfair labor practices” and “corporate greed.” “(The union) strongly condemns Unilever Tea Kenya for engaging in corporate greed and jeopardizing over 11,000 unionized workers’ jobs through a separation exercise that only targets unionized employees,” he said in a statement. The next day Unilever East Africa Corporate Affairs Director, Joseph Sunday, told the Daily Nation the early retirement program is part of routine business exercise used by companies across Kenya and is no way linked to a massive layoff. “This has been aimed at ensuring we have an organization that is agile, fit to compete and efficient in our quest to respond to rapidly changing business needs,” Unilever Tea human resources manager Mary Wanyonyi said in a memo to employees. “It is in this regard that Unilever Tea Kenya is offering voluntary separation to non-management employees to be conducted strictly on voluntary basis,” according to the memo. The tea grower said affected employees will be eligible for severance pay of 23 days for each completed year of service, notice pay in accordance with terms of service, any outstanding leave days and one-way bus fare home as per the Collective Bargaining Agreement (CBA). Union leader Khisa said the layoffs were not necessary as there is no economic crisis at the company. “The business is up and running, supply of tea leaves as a raw material is in plenty and the market has not shrunk. There is absolutely no reason whatsoever for voluntary cessation of employment,” he said. Source: Unilever, The Nation, Business Daily Africa