Home Business & Finance Corporate Court orders Choppies to deposit Sh7m

Court orders Choppies to deposit Sh7m

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A Kisumu court on Monday declined to issue an order directing Botswana-based Choppies Supermarket to deposit Sh12.5 million as security for former employees who had moved to court seeking payment of their redundancy fees.

Senior Principal Magistrate Robinson Ondieki instead ordered the retailer to deposit Sh7 million as guarantee should the firm exit the country without paying their dues.

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In his ruling, Mr Ondieki stated that he was aware of the fact that the Kenyan economy was not sound and that withholding a sum of Sh12 million from the company would have a devastating impact on the respondent.

“I shall allow the application to the extent that the respondent deposits Sh7 million to the courts in the next 28 days and direct that the trial be expedited in order to inject monies back to the economy,” ruled the magistrate.

The court admitted the fact that the struggling firm has foreign roots and that it would eventually exit the Kenyan market and go back to its motherland.

“The fact that the respondent has foreign roots and that having failed to demonstrate that there are assets in Kenya that can be utilised to satisfy a decree in event of the claimants are successful, the fear of financial loss of claimants is real,” said Mr Ondieki.

The former employees moved to court after the company closed some of its branches but failed to pay them redundancy fees amounting to Sh12.5 million.

According to the claimants, the respondent did not pay them dues as outlined in their collective bargaining agreement (CBA) which included salary arrears, one-month notice, house allowance arrears, service pay, leave allowance among others.

In a matter filed under the certificate of urgency, the ex-staff argued that the company was owned by foreigners who were likely to leave the country soon.

In response, the respondents argued that through a meeting on October 7, the two parties entered an agreement to pay the claimants a terminal benefit on redundancy and terminal dues through Barclays Bank.

The company argued that the claimants had therefore moved to court with unclean hands for having received a payment of Sh686,485 in respect to their terminal fees according to the respondents.

The case will be heard on January 13.

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