Heritage to pay Sh121m for wrongful employees dismissal
Heritage Insurance MD Godfrey Kioi. The insurer sent over 30 top managers packing in a cost-cutting measure termed by affected employees as “abrupt and cruel”. FILE PHOTO | DIANA NGILA |
What you need to know:
- Heritage is part of Liberty Kenya Holdings Limited which announced January that its 2015 profit would decline by at least 25 per cent compared to the previous year.
Heritage Insurance has been ordered to pay over 20 of its top managers sacked last year some Sh121 million for damages and unfair termination.
In a ruling delivered at the Milimani Law Courts on Thursday, Judge Monica Mbaru described the dismissal as ‘punitive unfair and illegal’, ordering the firm to pay all the 24 staff Sh500, 000 each for damages, and 10 months’ salary each for unfair termination.
The insurance firm was also ordered to pay, “Severance pay of 30 days for each year’s work for each staff,” while “those with mortgage to continue paying till the end of the loan period at the interest rate which they were paying as at termination unless they want to settle it.”
The employees are among 30 sacked in what they termed, “abrupt and cruel”. The Heritage Insurance Managing Director Mr Godfrey Kioi said directors and senior managers up to supervisor level were affected.
The company said it was restructuring to improve business efficiency.
“As you may be aware, the company has been going through a review of structures and implementation of ICT systems. In this regard, some processes have been shortened and some job roles have been merged. As a consequence, some roles have been redefined while others have been rendered redundant,” read the sacking letter signed by Mr Kioi.
Profit warning
Heritage is part of Liberty Kenya Holdings Limited which announced January that its 2015 profit would decline by at least 25 per cent compared to the previous year.
The firm noted that it was hit by a general decline in the values of listed equities and fixed income securities in the markets which the group operates.
Liberty Sh1.15 billion profit after tax for the year 2014, a 3.9 per cent increase as compared to Sh1.1 billion for 2013.
“The board of directors of Liberty Holdings wishes to announce that the company’s earnings for the year ended 31 December 2015 are expected to be at least 25 per cent lower than then earnings reported for the same period in 2014,” Liberty Holdings chairman Susan Mboya Kidero and company managing director Mike du Toit said January in a joint profit warning announcement.
