Under the Act the Minister for Labour has the jurisdiction to nullify any procedure of retrenchment that has not been undertaken within the provisions of the law.
The KQ management has argued that employment costs at the airline doubled over the last five years, from Sh6.1 billion in 2007 to Sh13.6 billion this year, while the number of Kenyan employees grew from 3,729 to 4,170.
Including overseas staff the total number of employees at the Kenya Airways stood at 4,834 at the end of the last financial year.
KQ has argued that it will save close to Sh1.2 billion annually in labour costs through the retrenchment.
“We know where Kenya Airways can cut cost. They could have been able to cut 76 percent of the wage bill, which is what management earns, but they did not do that,” Perpetua Mpoujiwa, chairperson of the Aviation & Allied Workers Union said before the Parliamentary Committee on Labour and Social Welfare on Monday.
According to Mpoujiwa just 10 individuals at management level opted for the voluntary retirement package, adding that none were retrenched following that exercise.
As KQ had structured the retrenchment, employees were given the option of early retirement before being laid off.
According to the airline, 21 percent or 126 of the estimated 600 members of staff that left the company volunteered to take up the company’s layoff package, which was an estimated average payout of up to Sh2 million.
This was to reduce KQ’s employee cost base of Sh13.4 billion by 10 to 15 percent.
Meanwhile, Transport Minister Amos Kimunya was a no-show at a parliamentary committee investigating the retrenchment forcing its premature adjournment, on Tuesday.
The Labour Committee refused Transport Permanent Secretary Cyrus Njiru to represent Kimunya at the sitting arguing that he sits on the KQ board.
The government has two seats on the KQ board, taken up by Njiru and Finance PS Joseph Kinyua, a fact that has placed the government in a precarious position split between preserving jobs and the interests of the company.
The government holds a 23 percent stake in the airline, with the other major shareholder being Air France-KLM that holds a 26 percent stake.
The Parliamentary Committee on Labour and Social Welfare is expected to hear from the Ministry of Finance and Capital Markets Authority in coming days to gather evidence for its report on the retrenchment.
