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The Sh115 million owed to former employees of the Pyrethrum Board of Kenya will be paid once a dispute on whether the terminal benefits should be exempted from tax or not by Treasury is settled, the board has said.
Dr Isaac Mulagoli, PBK’s managing director, was reacting to allegations that the institution was behind the delay in payment of retrenchment dues owed to 157 former employees, who were relieved of their duties last year to cut costs on the wage bill.
“We are trying to settle the matter with the minister for Finance, so that their package is exempted from tax. This is the reason for the delay in payment of the dues,” he said.
He added: “I have pushed the matter as far as I can, and the letter I wrote to the minister is yet to be signed and gazetted, then sent to the government printer,” he said.
The board owes the former employees a total of 115 million as a retrenchment package in supplementary estimates, which includes golden handshake, reference pay, and in lieu of notice.
Last week, a group of former employees caused a commotion when they stormed into the State corporation’s managing director’s office demanding payment of their terminal benefits, which have been pending for one year.
The more than 100 retrenchees camped at Dr Mulagoli’s office insisting that their dues had been released by the government in this year’s supplementary budget.
The MD had a difficult time trying to calm them down. The bone of contention was based on modalities being proposed to clear the arrears, where the board said it would pay those willing to have their benefits taxed while the retrenchees insisted that their dues had been exempted from taxation.
