The Kenya Broadcasting Corporation (KBC) is now facing a potential closure and worse yet, the mass firing of employees after a court ruling in its Ksh10 billion pension scheme case swung against their favour.
The national broadcaster had informed the court that it may be forced to halt its operations as it will be unable to meet its financial obligations including payment of salaries.
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That is considering that the media house is forced to immediately pay employees, which can rise up to Ksh12 billion. Ksh2 billion extra is owing to a three per cent compound interest on the total debt.
Justice Maureen Onyango of the Labour Relations Court blamed KBC for failing to remit the money to the KBC Staff Retirement Benefits Scheme as required by the Retirement Benefits Act.
“I find that KBC having made the requisite deductions from its employees’ salaries, it had a duty to remit such funds to the Scheme within 15 days.
“KBC has continuously failed, ignored or refused to make the requisite remittances despite the agreements with the Retirement Benefits Authority as well as the court (earlier) ruling delivered on May 15, 2020,” she ruled in part.
Despite confessing its indebtedness to the retirement scheme, the company did not explain the location of the funds deducted monthly from its employees’ paychecks, a matter which ignited the court dispute.
It was on the spot for failing to remit employee retirement benefits amounting to Ksh984.3 million, which paints the picture of the broadcaster being in danger in terms of cash flow and economic downturns for its employees.
A report for the year ended June 2020 submitted to lawmakers by Auditor General Nancy Gathungu revealed that the institution could be at risk of penalties as well as interest if it continues delaying in remitting the deductions.
“Management attributed the delay to remit the deduction to its inability to settle its obligations as and when they fall due. The corporation is exposed to the risk of incurring penalties and interest with the continued delay in remittance of the deductions,” read the report in part.
Remittance of statutory, loan and members’ deductions to Saccos and banks are mandatory employer obligations.
Gathungu also faulted KBC for not remitting other unspecified statutory deductions amounting to Ksh464.6 million, cooperative liabilities of Ksh28.3 million and Kenya Revenue Authority (KRA) dues of Ksh712.3 million.
Ex-KBC employees have in the recent past petitioned the broadcaster to pay them their outstanding benefits. In 2019, unionisable staff issued a notice to down their tools on grounds that salaries and pensions were not being paid to staff and retirees.
The mounting woes on the media house come after it rebranded in June 2021 and poached top news anchors previously at rival mainstream media houses.
Alongside unveiling its state-of-the-art studios, KBC rehired veteran anchors such as the late Badi Muhsin, Tom Mboya, Catherine Kasavuli, Cynthia Nyamai, Pauline Sheghu, John Kioria and Fayaz Kureish.
Also included were current generation anchors such as Ahmed Juma Bhalo, Caren Kibbet, Nancy Onyancha, Shiksha Arora and former NTV anchor Harith Salim.