Parties start talks to avert unrest over wage dispute

Talks have started over a demand by the umbrella trade union body for a 60 per cent increase in minimum wages as the government and employers look to stem the possibility of industrial unrest, which would destabilise the economy further.

Officials from the Ministry of Labour, the Federation of Kenya Employers (FKE) and the Central Organisation of Trade Unions (Cotu) on Tuesday held a meeting on the wage demand, which the government and employers fear would add another shock to an economy grappling with record oil prices.

“We have started negotiations with the government today and come May 1, we are prepared to start a nationwide strike should there be no tangible results,” said Mr George Muchai, the Cotu assistant secretary-general.

Cotu secretary-general Francis Atwoli made the demand over the Easter weekend, warning government officials to keep off Labour Day celebration venues on Sunday, if the demand is not met.

The government has already offered a 10 per cent increase in minimum wage to mark the occasion, but the offer has been objected to by FKE.

Cotu maintained the 60 per cent wage review was “very reasonable” to protect workers from the high cost of living.

A sixty per cent rise in minimum wages would see an employee working in Nairobi earn about Sh11,755 up from the current Sh7,347 FKE says an increment at this time would be punitive to employers, besides increasing the cost of doing business in the country.

According to FKE, the proposal to increase wages negates the provisions of the Wages Guidelines, published on November 23, 2005, that allow for such increases once after every two years.

Last year, the government increased the minimum wages by 10 per cent.

However, balancing between wage increases and maintaining the country as an attractive investment destination remains a key challenge.

FKE also warned of possible worker layoffs that would be necessitated by a bloated wage bill.

Sustained pressure on food and fuel prices lifted the inflation rate for the fifth straight month in March, bringing closer to reality the possibility of consumer price acceleration touching the double digit mark before end of June.

These escalations have caused advocacy groups like Consumers Federation of Kenya (Cofek) and Kenya Consumers’ Organisation (KCO) to increase their calls for government intervention to arrest the situation with some staging public demonstrations.

A common theme between the two organisations leading the calls has been that of reduction of taxes levied on petroleum products as well as the introduction of price control regimes to cushion Kenyans.

In regards to salary increments KCO, though supporting the move, said that this solution would leave out a section of the consumer block.