Nearly 50 employees retrenched by Mediamax Network Ltd are yet to get their dues, one month since they were declared redundant. A number of former staff have been making frantic calls to the human resources and finance office only to get one common response: “It’s coming soon.”
It is understood that the money initially budgeted to pay off the sacked journalists from radio, television and newspaper was diverted to finance, among other things, the relaunch of K24, whose new-look was rolled out yesterday. The cash crisis has been also caused by a delay in a cash injection from one of the principal shareholders.
The company’s CEO Ian Fernandes said the company, majority owned by President Uhuru Kenyatta’s family, laid off workers as part of restructuring and reorganising its business processes to become more efficient and effective, which resulted in redundancies.
Also see: Top K24 and Milele FM presenters thrown out
According to the retrenchment letters, each laid-off staff was to be paid a severance package which included one month salary, one month salary in lieu of notice, 15 days for every year worked, leave days and the 10 days worked in November. This is, however, subject to 30% Pay As You Earn (PAYE) and other statutory deductions.
The initial plan was to pay the retrenchees to paid alongside staff salaries last week but that did not materialise. “I have been checking the bank daily, but nothing,” one of the victims, who has resorted to freelancing while looking for stable job.
BusinessToday has learned that staff salaries were paid last week. Those retrenched are facing financial problems and many without other sources of income unable to pay bills. Worse, those servicing bank loans risk penalties or being auctioned in case the payment delays beyond their credit terms.
Mediamax finds itself in the same quandary that Standard Group pushed itself into when it suddenly ran out of cash after retrenching over 100 employees. The management was forced to take up a loan to pay off the sacked workers and those who opted voluntary early retirement.
Mediamax risks law suits from the former employees if they choose to go to court to compel it to pay.
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