This archive report was first published on 21 December 2019.
On December 20, 2019, the Employment and Labour Relations Court issued a ruling that has thrown a spanner in the works for the ongoing merger talks between Tumaini and Quickmart. The court ordered the two firms to retain 447 employees and conclude a collective bargaining agreement within the next month.
According to Justice Maureen Onyango, the court restrained Quickmart and Tumaini from terminating the services of 447 employees on grounds of alleged change in staff management. The court further ordered the two firms to integrate their employees on the current terms and conditions of service arising from the merger and rebranding without outsourcing their jobs to third parties.
The ruling casts a shadow on the merger talks between the two companies. In September, the two firms made a joint announcement revealing plans to form a special purpose vehicle, Sokoni Retail Kenya, under the control of Mauritius-based private equity firm Adenia Partners. Sokoni last year acquired Tumaini, taking control of the retailer's 13 outlets located in Nairobi, Kisumu, Kajiado, and Kisumu.
As part of the proposed merger, Sokoni is expected to take up 100 per cent shareholding in Quickmart, forming a giant retailer with more than Sh1 billion in annual turnover. However, employees of Tumaini Supermarket accused the management of victimising them on the basis of union membership and failing to enact a collective bargaining agreement.
The case will be heard on January 22, 2020. In the meantime, Tumaini Supermarket is required to sign a recognition agreement and conclude a collective bargaining agreement with the employees by January 17, 2019. Tumaini was also ordered to hand over its staff to Quickmart in the event the firm seeks to close down operations before then.
