NAIROBI, Kenya, April 25 – CMC Motors Group is set to lay off 169 employees after three vehicle brands, Ford, Suzuki, and Mazda, terminated their distribution contracts with the firm following a slowdown in the passenger vehicle segment.
In a letter to the Amalgamated Union of Kenya Metal Workers, the firm’s MD Sakib Eltaff said the company intends to undertake the layoffs in three phases as the distributors wind up their operations with CMC Group between the second and fourth quarter of the year.
“As a result of the termination of these distributorship contracts, CMC Group is re-organizing its business to place great focus on the agricultural sector. This will result in a reduction in the number of roles and the resources required to execute the remaining functions. This means that it will become necessary to declare 169 employees redundant,” he said.
Eltaff noted that the employees to be affected are in both management and unionisable categories.
“Please note that employees who work in Admin & Support, Finance, IT, Legal, Logistics, Senior Management, Parts, Procurement, Projects, Sales, and Service departments will be affected by the redundancy,” he noted.
Phase one of the redundancy commences from 25 April 2023.
Eltaff added that in declaring the employees redundant, every measure will be taken to ensure compliance with the requirements of Section 40 of the Employment Act, individual contracts of employment and the Collective bargaining agreement(CBA) between the company and the union.
This means the employees will be paid their terminal dues in accordance with their contracts of employment and as guided by the existing CBA.
This will include, salary for days worked up to the date of termination, Salary in lieu of notice based on the number of years and CBA, Severance pay for each completed year of service based on the number of years and CBA and Pay in lieu of leave days accrued but not taken.
Following the termination of the distributorship contracts with the three-vehicle brands, CMC will no longer represent them in Kenya.
Ford will be moving to Salvador Caetano in the third Quarter of 2023 and Suzuki will be supported by CFAO from the second Quarter of 2023.
Mazda will announce the new distributor in the coming months.
