REPRIEVE AND RELIEF FOR KENYA AIRWAYS AS APPEALS COURT RULES IN THEIR FAVOUR
(Posted 12th July 2014)
The Court of Appeal in a ruling made public yesterday in Nairobi, set aside the hotly contested order by Industrial Court justice James Rika given in September 2012, in which he ordered Kenya’s national airline to re-instate over 400 staff who had been laid off at the time. The Aviation and Allied Workers’ Union, an organization severally described as militant as well as lacking understanding how modern aviation works in an increasingly competitive global environment, had taken Kenya Airways to court at the time after many staff had in fact accepted retirement packages and benefits offered to voluntarily leave the airline. The judge was clearly swayed by emotional arguments including support for the union from a section of the political spectrum in Kenya, and in the climate of a highly charged pre-election period then sided with the union. His lopsided ruling was yesterday overturned by a three judge bench of the Appeals Court which found that he had erred in law when delivering his judgment in favour of the plaintiffs at the time.
Kenya Airways that year posted a record loss, followed by another loss making year which ended in March 2014 but with much improved outlook for the future, thought to return to profit territory, aided by having put this case to rest.
Savings in overheads and through outsourcing of services, combined with anticipated fuel savings as the ageing fleet of B767-300ER’s is now being replaced by state of the art B787-8 Dreamliners are seen as the main driver to come out of two years of losses and begin write black figures again at the bottom line.
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Not such a big reprieve for Kenya Airways. While the ruling said that the airline does not have to take back those that were laid off, the court did rule that the airline should pay them. The amounts could be massive.