Heritage Insurance accounts frozen in sacking case

A court has temporarily frozen the bank accounts of Heritage Insurance for reportedly failing to pay more than Sh100 million to employees whose services were unfairly terminated.

Justice Hellen Wasilwa of the Employment and Labour Relations Court granted the orders in an application filed by 24 former employees, who claim that the firm has been reluctant to pay them their dues, despite a judgment in their favour.

The order affects the firm’s accounts at CFC Stanbic, NIC, CBA and Diamond Trust Bank.

The labour court had last year found that the services of 24 former top managers of the insurance firm had been unfairly terminated during the implementation of what the company said was a restructuring exercise to improve its business efficiency.

Heritage Insurance Managing Director Godfrey Kioi had stated that the directors and senior managers up to supervisor level were affected.

However, the affected employees had called the sacking “abrupt and cruel.”

In a judgment delivered on June 3 last year, labour court Judge Monica Mbaru directed the insurer to pay Sh101,678,336 with accrued interest amounting to Sh4,195,276 as well as costs amounting to Sh2,843,841.

Heritage is part of Liberty Kenya Holdings Limited, which reported last year that it had a 15.3 per cent drop in net profit in the half-year ending June, 2016 as a result of higher claims and operating expenses.

The drop in profit came as claims from policyholders increased 41.5 per cent to Sh2.3 billion, while operating expenses also rose 14.2 per cent to Sh1.5 billion.

The case will be heard on February 23.