CMC Motors Group is set to lay off one hundred sixty-nine employees after three vehicle brands terminated their distribution contracts.

The termination is 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

Further, the MD noted that the employees to be affected are in both management and unionisable categories.

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“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 on 25 April 2023.

Eltaff further stated that every effort would be made to ensure adherence to the provisions of Section 40 of the Employment Act, individual employment contracts, and the Collective Bargaining Agreement (CBA) between the business and the union before designating the employees redundant.

This indicates that the employees will get their final compensation in accordance with their employment agreements and in compliance with the current CBA.

Salary for days worked up until the termination date will be included in this. Dependent on the number of years and CBA, salary in lieu of notice, Severance pay based on the number of years and CBA for each year of service that has been completed. Pay in lieu of accumulated but unused leave days.

Following the termination of the distributorship contracts with the three-vehicle brands, CMC will no longer represent them in Kenya.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 CFAO will support Suzuki from the second Quarter of 2023.

Mazda will announce the new distributor in the coming months.