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More troubles for Nakumatt as staff sue retailer over unpaid salaries

Retail chain Nakumatt Supermarket employees have joined the list of creditors and entities seeking legal redress over the company’s failure to meet its financial obligations.

The employees, through the Kenya Union of Commercial, Food and Allied Workers have moved to court, accusing the retail chain of delaying their salaries, failing to pay them for overtime worked as well as non-implementation of the 11 per cent salary increase from May 1, 2017 as agreed in a collective bargaining agreement (CBA).

The retail chain has also unilaterally reduced the workers’ shift hours from 13 to 10 hours with the aim of cutting down their overtime wages.

Nakumatt is also not remitting pensions, pay as you earn (PAYE) deductions, loan repayments, sacco contributions, private insurance schemes deductions, and union dues to the relevant agencies, the employees say in their petition before the High Court.

RENT ARREARS

The suit adds to the long list so far filed by creditors, including Thika Road Mall (TRM), which in July attached the retail chain’s goods and equipment to recover Sh51 million in rent arrears.

A separate insolvency petition filed by one of Nakumatt’s top suppliers, seeking to recover Sh70 million in debt, is also awaiting determination by the court.

African Cotton Industries Ltd, a manufacturer of sanitary towels, said in its petition that talks with Nakumatt since May last year have not borne fruit.

Three cheques that Nakumatt issued in March this year totaling Sh11 million have also bounced.

Nakumatt has argued that the attachment of its assets by TRM is illegal as there are active insolvency proceedings against it in court.

SALARIES

The employees are pursuing similar agenda against the retail chain and want Nakumatt ordered to pay end-month salaries as required under the CBA, pending the hearing and determination of the case.

“We also want that pending the hearing and determination of our case, Nakumatt be directed to pay PAYE taxes, remit loan, sacco and private insurance scheme deductions, pay union, and authorised overtime dues without delay,” Mr Boniface Kavuvi, the secretary general of the union says in the court papers.

The case will be heard in September.