Standard Group Threatened With Lawsuit Over Unpaid Salaries

The Standard Media Group (SMG) risks being sued in a court of law over its non-payment of salaries to staff amidst an ongoing crisis at the cash-strapped media house based along Mombasa Road in Nairobi.

On Friday, March 24, SMG's former employees through law firm Turunga Ithagi & Associates Advocates wrote to the media house demanding their salaries that were withheld in the years 2020-2021 in the guise that the COVID-19 pandemic meant they should be subjected to salary cuts.

The demand letter seen by Viral Tea revealed that on or about January 17, 2023, SMG had issued the ex-employees with payment plans for their final dues where it indicated that payment would be made in instalments on the following dates:

"Immediately (Net salary arrears up to 31.12.2022); On or before 15th February 2023; On or before 15th March 2023; On or before 15th April 2023; and On or before 15th May 2023.

"Despite the fact that our clients had been declared redundant, they were left with no choice but to accept the terms of the staggered payment plan. Little did they know that they were signing a document that would not be honoured and now suspect that it was only a scheme to have them accept the redundancy with the enticement that they would be receiving a “redundancy package”," read the letter in part.

The letter further accused SMG of failing to communicate to the former employees the reason for not remitting the instalment that was due on Wednesday, March 15, which remains outstanding to date, a matter which they followed up with but to no avail with unfulfilled empty promises that: “it shall be paid tomorrow”

The law firm found the media house to have breached the terms which originated from SMG and that the former employees have lost trust in its ability to honour its obligations, demanding that the full outstanding amount due to them as final dues be settled. 

"As though that is not sufficient malpractices on your end, our clients have been informed upon following on statutory deduction statements with National Hospital Insurance Fund (NHIF) and National Social Security Fund (NSSF) have not been remitted despite the same being deducted from their pay. We cannot fathom why a publicly listed company would act in such a manner," added the letter.

The lawyers faulted SMG's hoarding of salaries between 2020 and 2021 under the guise of salary cuts triggered by the effects of the pandemic, terming the move as unconscionable, an affront to the Constitution of Kenya and the Employment Act as no consultations were ever done with employees before forcing to acknowledge an illegal pay cut.

Standard Media was given seven days from March 24 to remit the former employees the outstanding amount or face legal action at the media house's own cost.

"Now, therefore, take notice that if you do not pay our clients the outstanding amount from both their final dues and the withheld salaries within 7 days from the date of this letter, we shall pursue all available legal means, without further reference to yourselves, at your costs," concluded the letter.

The media house by the time of publishing this article was yet to respond to the new demands of the former employees.

Over the years, SMG has boasted of some of the biggest names in the country in terms of its brands that include KTN News, KTN Home, Radio Maisha, Farmers TV, Burudani TV, Spice FM and Vybez Radio but its financial woes have brought the near-century-old media house to its knees.

So far, the media house has cut its catering services to staff, who have been forced to make alternative arrangements for their meals as the company continues to grapple with the financial crisis. In addition, some of them have been reportedly forced to sleep inside the offices owing to the salary arrears.

In addition, arrangements were made to have a good number of sub-editors and editorial production editors work from home to cut transportation costs to and from both the Mombasa Road-based media house and its offices in the Nairobi CBD.

The SMG, listed at the Nairobi Securities Exchange (NSE) and arguably Kenya’s second-largest media house, is also paying the price of over-expansion with many projects introduced over the past five or so years (mostly radio and TV stations) yet to break even.

Much of the blame was directed at CEO Orlando Lyomu for the mass firings initiated to cut costs, a move that was understood to have slowed down after the company discovered that it did not have the requisite finances to pay laid-off staff, giving them temporary relief.

The firings have also manifested to arguably the worst talent haemorrhage ever, with its competition picking SMG's star performers.

Among the popular names to have left the media house include Mercy Korir, news anchor Sharon Momanyi, seasoned Foreign Affairs editor, Lilian Odera, seasoned journalist Frank Otieno and editor Ted Malanda as well as Sheila Kwamboka, Nazizi Hirji, Fredrick Odeo Sirari, Lynda Oriaso and Geoffrey Mung'ou, among others.

Radio Maisha has been the most affected by the mass poaching from Standard Media's competition, with most of its journalists joining Radio47, owned by Cape Media.