Mediamax Network Limited, the company that owns K24 TV, the People Daily newspaper and a number of radio stations including the popular Milele FM has recently had incessant wrangles between employees and the management.
180 of them have sued the company and there is a plan to oust the company CEO.
We spoke to dozens about the wrangles, accusations and the way forward.
On Friday, April 17, 2020, the company announced a pay-cut of between 20% - 50% to all its staff aimed at cushioning the company against the disruptive effects of the Covid-19 pandemic that has seen the world in an unprecedented lockdown.
The company's pay-cut formula was unlike any other, with some of the highest reductions across board in the industry.
Employee ‘coup’
This would explain why outraged employees, confronted with the possibility of having their lives - as they knew it - upturned by a non-consultative executive decision, did not let it go uncontested.
They lawyered up and moved to court, scoring a major win against the media house and got a ruling in their favour on Friday, April 24.
"Pending the hearing, interpretation and determination of this application, the court does issue an interim preservatory order to stop the respondent from slashing the salary, victimizing, harassing or coercing, intimidating or otherwise dismissing or terminating any of the staff," court papers seen by Kenyans.co.ke read in part.
The court further warned that legal action would be pursued if the media house failed to comply with the orders.
36 employees including senior K24 TV anchors from the media house sued on behalf of Mediamax staff. Kenyans.co.ke has since obtained the full list of 180 employees in the suit.
Prior to the lawsuit on Tuesday, April 21, employees went on a go-slow, lamenting that the letters served to them did not document the time when the salary cuts would cease.
“The ambiguity in the communication from the management has been a cause of extreme consternation among the staff. To visualise the contrast, Royal Media Services has committed to pay employees income lost during this period when normal business resumes,” a senior manager at the media house confided to Kenyans.co.ke.
Dozens of employees who spoke to Kenyans.co.ke stated that some of the employees did not report to work on April 21.
"Everybody is condemning the letter and gone on a go-slow because the letter does not substantiate after how long their salaries will be reinstated," another source informed our newsdesk.
Campaign Against CEO
Kenyans.co.ke has since established reports of a campaign steered against the company's acting Chief Executive Officer, Ken Ngaruiya, with accusations of irregular dealings levelled against him.
A highly-placed source informed us of a plan to twist the hand of the board to oust Ngaruiya, force the company to a catch-22 situation, where supposedly questionable dealings are exposed or as employees want, reach an amicable deal.
They are accusing the CEO of shady deals that could be traced back to the rebrand of K24 TV in 2019.
Another former employee revealed to us that Ngaruiya had been accused of allegedly pocketing a huge sum of money from the questionable spending of Ksh100 million in the new-look K24 TV studio. This reportedly led to the layoff of 160 employees in a bid to reduce costs.
"Managers give revenue plans, but the CEO ends up cutting deals with agencies, for example, People Daily at one point ran a front-page advertisement for a measly Ksh80,000," another senior source reiterated, further alleging that the company's sales team had a litany of complaints with regards to meddling by the CEO.
"He has to be hands-on but it's just for a tight grip on deals," the source claimed.
Further reports reaching our newsdesk revealed that there is a huge disagreement among senior managers at the media house, with several heads of department highlighting the alleged financial "impropriety" in the company.
Several sources informed us that proposals fronted to the CEO from managers to handle the liquidity problems at the company had been ignored.
Compromise
The lawsuit that has now forced the company into working towards an out-of-court settlement, our sources inform, has been orchestrated by several senior managers intent on fighting the blanket pay cut.
The managers have rallied employees into contributing about Ksh2,000 or so each to pay for their representation in court.
“I can authoritatively tell you that anyone earning more than Ksh50,000 in the company has received a 50% pay cut. My staff members earning Ksh30,000, have had their gross earnings reduced to Ksh 24,000. This is what we are fighting,” a department manager confided to Kenyans.co.ke.
We have since learned that the company's tight situation had resulted in a delay on the disbursement of salaries for the month of March 2020, with several employees claiming to have been paid in instalments.
“There is an extreme sense of injustice. The decision that was made invalidates current contracts that employees have. Even when proposals were sought from us managers on the onset of Covid-19, there was already a predetermined decision,” stated a senior employee familiar with the goings-on.
Employees had been served with the letters and given up to April 27, 2020, to sign them, authorising the salary deductions. They declined and moved to court.
"The major complaints are mostly on a lack of trust with the CEO. He’s a really crafty guy. Also, the salaries at Mediamax are relatively low and some of the employees earn as low as Ksh20,000 and if the cut is applied to them they will really suffer," another source informed.
Best Case Scenario
Speaking to Kenyans.co.ke, David Ondieki, the lawyer handling the case filed by Mediamax staff, says the company’s lawyers have appeared to prefer an out-of-court settlement to put to rest a matter that threatens to crumble the broadcaster.
He states that the employees are cognisant of the tough times that the media house has been facing following the loss of traditional advertising revenue including the withdrawal of government ads - the bread and butter of legacy media - and the competition for online forms of advertising.
“At People Daily, we used to have about three inserts of MyGov in a week, but that was reduced to just one. From my conservative estimates, that reduced our revenue by more than a third,” stated one employee in the print department of the company.
Ondieki states that the biggest grievance is with the unprecedented, blanket 50% tax cut that has been applied without a consideration of the different pay brackets.
“Our best-case-scenario is having the pay cut reviewed to match the job cadres. My clients are not opposed to the pay cut, they are only concerned that it has not been equitable. They would be happy with a 15-30% pay cut across the cadres. My clients are very flexible,” he states.
While he admits that the company's lawyers have indicated that it would be willing to review the cuts, Ondieki states that the company has to respond within the best-case-scenario envisioned by his clients.
“There is an indication that the company is unable to meet its obligations. If this is the case, and the company can’t provide us with the 15-30% cut within the various cadres, we will be left with no option but to lift the corporate veil. That the shareholders declare bankruptcy,” he warns.
By the time of this publication, we had not confirmed claims that the CEO had been meddling with sales deliverables as our attempts to reach him and members of the Mediamax board have been futile.
When reached on the phone, Mr Ngaruiya hung up immediately this writer introduced himself as a journalist and subsequent text messages via WhatsApp and regular SMS went unanswered several hours prior to publication.
As such, no indication of wrongdoing on the CEO’s part is alluded to in this report and the claims are only as true as viewed from the claimants’ perspective, with the most verifiable fact being the economic crunch faced by all media companies owing to reduced advertisement occasioned by the Covid-19 pandemic.
