Kenyan court stops Wasoko from laying off nine employees amid merger plans with MaxAB

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February 9, 2024
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2 min read
wasoko
Wasoko
  • Kenya’s Employment and Labour Relations Court has prohibited Wasoko, a Kenyan eCommerce startup, from laying off nine employees. 
  • On January 31, the court granted interim orders to the nine employees, which Justice Nzioki wa Makau extended on February 5.
  • The workers alleged that the company started the layoff process in December 2023 while preparing to merge with MaxAB, a B2B eCommerce startup based in Egypt.

In December 2023, the two startups signed a preliminary merger agreement, a significant first step in the merger process, allowing the parties to work out the details and determine whether or not they are a good fit. 

This move suggests that the agreement is non-binding and only serves as a blueprint for the final merger agreement.

Earlier in January 2024, we reported that the startups intended to reduce their 4000-person workforce by approximately 10%. 

Now, nine impacted workers are requesting judicial intervention in response to this action to force the employer to resolve their complaints before giving their jobs to other candidates.

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They also notified the court that they tend to experience significant and irreparable harm if their application is unheard urgently and the reliefs sought are ungranted. 

However,  two workers revealed to TechCabal that Wasoko concealed its merger plans which are supposed to be completed by March 2024, from the employees for over six months for fear that leaks could thwart the transactions. 

In an affidavit, Dennis Kimanthi, one of the employees, disclosed that a notice had informed them that the company had explored all options for reassigning them to different positions but found none of the alternatives feasible.

The employees claimed that after receiving the notices, they spoke with their employer multiple times regarding their packages. However, Wasoko allegedly instructed them to either shadow or hand over their roles to MaxAB Ltd. agents before it could resolve their complaints.

In addition, the company reportedly supported the merger and listed the positions declared redundant on LinkedIn. But, it did not allow the staff members to accept the positions during the consultative meetings. 

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In the meantime, the court has instructed that the case be heard on February 13th.

The employees alleged that none of the redundancy notices were forwarded to the labour office for their information and records as required by the Employment Act.

However, the company argued that the application does not meet the criteria for interim relief and that their case has little chance of success.

Wasoko shared through the law firm of MW & Company Advocates that "this application has been filed prematurely before the legal issues have crystallised and before the redundancy process completed. Presently, the applicants have not established a cause of action.” 

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