Action taken by Wasoko, a Kenyan eCommerce startup, to lay off nine employees has been halted by Kenya’s Employment and Labour Relations Court. The court issued interim orders to the nine employees on January 31, which Justice Nzioki wa Makau extended on February 5.
The employees claimed that the company initiated the layoff process in December 2023, in anticipation of a merger with Egyptian B2B eCommerce startup, MaxAB. The two startups signed a preliminary merger agreement in December 2023. This non-binding agreement is a crucial initial stage in the merger process, facilitating the negotiation of details to determine if the merger is viable.
We reported earlier in January 2024 that the startups planned to reduce their workforce of 4,000 by approximately 10%. Following this intended action, nine of the affected workers are now seeking legal intervention to require the employer to address their grievances before handing their positions over to others.
The Employment and Labour Relations Court in Kenya has issued a temporary injunction preventing Kenyan eCommerce startup, Wasoko, from laying off nine employees. The court issued interim orders on January 31 to the nine employees, a decision which Justice Nzioki wa Makau extended on February 5.
The employees contend that Wasoko initiated the layoff process in December 2023 in preparation for a merger with MaxAB, an Egyptian B2B eCommerce startup. The two startups signed a preliminary merger agreement in December 2023, which forms the initial step in the merger process but is non-binding. This agreement aims to allow the companies to work out the details and assess their compatibility.
In January 2024, we reported that these startups planned to cut approximately 10% of their workforce, which totals 4,000 employees. The nine affected workers are now seeking legal intervention to ensure the resolution of their complaints before their roles are given to new prospective hires.
The employees alerted the court that they would suffer significant and irreparable damage if their urgent application is not heard and their sought reliefs are not provided.
According to two employees who spoke to TechCabal, Wasoko kept its merger plans concealed from staff for over six months due to concerns that leaks might disrupt the deal, which they aimed to complete by March 2024.
In an affidavit, one of the affected employees, Dennis Kimanthi, revealed that the company had indicated that it had considered all options for reassigning them to other roles but found no viable alternatives.
The workers allege that they had multiple discussions with their employer about their packages following their redundancy notices. However, Wasoko allegedly required them to either shadow or pass on their duties to MaxAB Ltd. agents before addressing their complaints.
The employees also claim that while the company endorsed the merger and advertised the redundant roles on LinkedIn, it did not permit the affected staff to take up the positions during consultative meetings.
The court has scheduled a hearing for the case on February 13th. The employees claim that Wasoko failed to send any of the redundancy notices to the labour office for their documentation, as mandated by the Employment Act.
Counteracting this, Wasoko contends that the application does not fulfil the requirements for interim relief, and that the employees’ case is unlikely to succeed.
Represented by law firm MW & Company Advocates, Wasoko stated, “This application has been filed prematurely before the legal issues have crystallized and before the redundancy process is complete. Currently, the applicants have not established a cause of action.”
