Standard Group issued a redundancy notice in March this year, just days after the Coronavirus pandemic was declared, targeting 170 employees. The announcement coincided with the Covid-19 outbreak in Kenya, forcing Standard Group management to delay restructuring until July, possibly to factor in the pandemic’s impact on business and its employees.
Lay off it did, eventually, albeit in a low-profile strategy that involved plucking off one employee at a time. But this is causing indigestion for Standard, which just recorded a Ksh306 million net loss for the half-year ending June 2020, leaving a bitter taste in the mouths of those unlucky enough to be sent home.
Faced with a cash crisis, it is understood Standard is struggling to pay sacked employees their dues. According to sources, the layoff was structured in phases with the first lot having been issued with letters in July. Business Today has seen communications between desperate former employees trying to squeeze their dues from Standard, with HR managers always saying, it is “being processed.”
Different Standard Group departments have been affected although the newspaper section, which was already stretched and whose contract employees had their terms extended in March, was largely untouched with only one sub-editor reportedly being put on the chopping board.
The going, however, seems to be tough for those who have suddenly found themselves without a job as Standard Group struggles to pay terminal dues including, surprisingly, pension. According to the scheme’s rules, pension should be processed within 30 days.
Information from the pension manager, Liaison Group, indicates that Standard Group has unremitted employee contributions going as far back as September last year.
Strangely, the company’s online portal shows contributions are up to date until April this year, when Standard Group formally suspended contributions for a couple of months through a communication to members and the Retirement Benefits Authority, correspondence reviewed by Business Today show.
Non-remittance of pension contributions is an offense and Standard Group and the scheme managers might be penalised, if the RBA finds them culpable. In a letter to Liason Group after staff complains, Standard’s HR office promises to settle the pension dues without giving specific timelines.
“We have started processing his pension,” Gladys Jebet Cheserek, a HR assistant, responds to Liaison inquiries about a staff complaint, in an email dated 14th September 2020. “Our finance department is working on settling the unremitted contributions.
When an employee leaves, the employer is required to process 100% of the employee contributions and 50% of the employer. The remaining 50% of the employer contribution remains in the scheme until the employee reaches retirement age or transfers to anew employer.
While the pandemic seems to have hit the media industry hard, the woes at Standard Group started much earlier and the redundancy notice was, as it were, issued before the government measures put in place strict measures to stem the spread of the Covid-19 disease.
Even then, the group somehow continues to invest in capital intensive projects, such as the ongoing convergence initiative. It is not clear whether all the 170 employees have been offloaded, as the company is still implementing a work-from-home policy and shift system.
Standard’s rival Nation Media Group was forced to fire over 100 employees and adopt a new business strategy focusing on monetizing digital content after recording a loss of Ksh375 million for the first time in many years. With Covid-19 appearing to flatten, there is a ray of hope for media companies but that will depend on how fast the entire economy bounces back ahead of the December festive period.
Mediamax, which fired employees in June, reached a deal to stagger payments over three years, in what has been criticized as double punishment for someone who has lost a job