At least 2,000 workers are set to lose their jobs after James Finlays Ltd announced phased closure of its Kericho flower farm starting next month, citing high labour costs and persistent strikes.
In a statement released on Wednesday, the firm said expensive labour and workers’ strikes had rendered the Kericho farms unprofitable.
“The closure of both Chemirei and Tarakwet will take place over a two-and-half years starting May starting 2018 to end of December 2020,” read the statement signed by the flower company’s general manager, Steve Scott.
But the firm will continue to expand operations at its Lemotit farm in Londiani.
“The company has deliberately chosen a phased closure of the Kericho operations in order to minimize the impact on employees and their families. James Finlay is committed to helping employees find other job opportunities where practicable,” read the last paragraph of the statement.
This unprecedented move has raised questions as to whether labour union's agitation for higher wages is working in detriment to the productivity of various industries and sectors.
Mr Joel Soi, a political science lecturer at Maasai Mara University, said this turn of events was expected.
"China attracted investors in 1990s because their labour was cheap. Chinese goods are cheap because their labour is cheap. Kenya should re-look at the cost of labour," said Mr Soi.
The lecturer called on President Uhuru Kenyatta to spearhead the regulation of the labour market if his Big Four agenda, especially manufacturing, is to succeed.
Last year, James Finlay workers were part of 40,000 labourers who staged demonstrations demanding a 30 percent pay increment.
Firms affected by the 2017 industrial unrests recorded losses as the more than 40,000 workers under the Kenya Agricultural and Plantation Workers’ Union (KAPWU) in Kericho, Bomet and Nandi downed their tools.
The strikes paralysed operations, including picking and processing of green leaf, as Central Organisation of Trade Union Secretary General Francis Atwoli asked the workers to keep off the farms until they received a good deal in their collective bargaining agreement.
But the former Agriculture Cabinet Secretary Willy Bett sided with the companies, saying the implementation of the 30 percent pay hike as ordered by the industrial court was impractical.
"If we ask too much to the extent that the industry does not afford, they will abandon or relocate to other areas which are cheaper. The net effect, therefore, is massive layoffs," said Mr Bett.
Mr Atwoli said that if the companies cannot respect the basic tenets of the laws of the land then they were free to leave.
“The land belongs to the local community and these foreigners are applying what is called indirect slavery in a country that gained its independence in 1963. That is why we even want the piece of land to be reverted back to the county once the leases expire,” said Mr Atwoli.