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Kenya

January 15, 2021

By Karen Fulton and Bulela Mungeka

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Kenya

KEY DEVELOPMENTS FOR 2021


 

Employment trends during the COVID-19 pandemic

The COVID-19 pandemic created unprecedented instability in the employment sector, as employers were tasked with the difficult act of balancing the need for business continuity and sustainability, whilst ensuring the safety and wellbeing of their employees at the same time. To this end, several businesses have undergone and are still undergoing financial challenges during this time and are being forced to implement various measures, including the concept of working from home, placing employees on forced leave, requiring employees to consent to unpaid leave or reducing the employees' salaries and wages, or terminating employment relationships, by declaring redundancies.

Kenyan employers have found it necessary during the COVID-19 pandemic to require employees to take compulsory leave (paid) and even unpaid leave. Employers were required to obtain the employee's consent for the employee to be placed on unpaid leave. Where an employee failed to provide such consent, the employment relationship between the employer and the employee would often be terminated on account of redundancy.

The most common trend for employers during the COVID-19 pandemic has been the implementation of salary reductions, having obtained the employee's consent in writing to the reduced remuneration package. This has allowed businesses to remain afloat whilst still ensuring the wellbeing and safety of their employees.


 

The Pandemic Response and Management Bill 2020 (the "Bill")

The Pandemic Response and Management Bill contains provisions that will, if enacted, have an impact on the relationship between an employer and an employee during a pandemic.

Regardless of the adverse effects of a pandemic on an employer, including the ability of an employer to pay the employees' salaries and wages, the Bill, if passed into law, will prevent an employer from:

  • terminating an employment relationship during a pandemic, by way of terminating a contract of employment or dismissing an employee; and
  • forcing the employees to take a pay cut during a pandemic.

Moreover, in the event that an employer is unable to pay the employees' salaries or wages, the Bill stipulates that the employer is required to permit the employee to take leave of absence without pay for the duration of the pandemic.

Please note that the Bill is currently being debated in the Senate of the Republic of Kenya and its provisions shall only come into force if passed into law.


 

Occupational Safety and Health and Potential COVID-19 related litigation

Employers in Kenya have a legal obligation to ensure the safety, health, and welfare at work of their employees. To this end, employers should conduct a risk assessment to identify the risks of a COVID-19 outbreak at work, and adopt preventive and protective measures to minimize that risk. Employers are also required to adhere to the Government guidelines for business operations during the pandemic, including implementing social distancing at the work place; setting up cleaning and disinfection stations to allow employees to wash their hands; providing protective gear to the employees; implementing a screening protocol; and lastly, disseminating current information and resources on the COVID-19 pandemic to employees.

In the event that an employer fails to implement such measures to prevent the spread of COVID-19, employees may institute lawsuits against such employers, for their negligence and laxity in how they are dealing with the COVID-19 pandemic. We are yet to see such a case being instituted in Kenya.

However, it is important to note that an employer cannot be liable if the employer took all necessary safety precautions. The employer's liability is therefore tied to negligence and non-compliance with legal requirements.

Under the Work Injury Benefits Act (No. 13 of 2007) (WIBA), an employee has the right to compensation for personal injury in the course of work, whether resulting in temporary disablement, permanent disablement, or death. In addition, an employer is also liable to compensate an employee who contracts any disease in the course of employment. An employer is liable to compensate an employee for such injuries in the manner prescribed by WIBA. As a result, it is possible for the Director of Occupational Safety and Health Services to make a finding that an employee who contracts COVID-19 while carrying out their work, is liable to compensation for resulting temporary disability, permanent disability, or death.

With thanks to Karen Fulton and Bulela Mungeka of Bowmans for their invaluable collaboration on this update.

 

KEY DEVELOPMENTS FOR 2020


 

The Impact of the Data Protection Act 2019 on Employers

Following the recent enactment of the Data Protection Act 2019 (the "Act"), employers fall under the definition of "data controllers", by virtue of the fact that they collect and hold information relating to their employees.

Employers will therefore be required to collect and transfer any personal data of their employees with due regard to the principles of data protection set out at Section 25 and 26 of the Act. This means that employers will need to put in place comprehensive data management policies that strictly comply with the provisions of the Act, particularly where employers intend to collect data concerning the health of an employee due to the ongoing pandemic.

Employers should also designate or appoint a data protection officer to ensure on-going compliance with the Act. Failure to comply with any relevant obligations under the Act constitutes an offence which, upon conviction, may attract a fine not exceeding KES. 3,000,000 (approximately $27,500 USD), imprisonment of up to 10 years or both.


 

Confirmation of Maximum Compensation Award for Unfair Dismissal

The Court of Appeal in Abraham Nyambane Asiago v Barclays Bank Of Kenya Limited has recently held that the maximum compensation for unfair dismissal is twelve (12) months' pay. The Court of Appeal held that "an award of maximum compensation must always satisfy stringent conditions that demonstrate gross abuse of procedure or extreme cruelty on the part of the employer."

The effect of the judgment is that employees will now need to demonstrate in their claims that they are entitled to maximum compensation for unfair termination because (a) the employer abused the dismissal procedure or (b) the employer was extremely cruel.


 

Requirement to hold Oral Disciplinary Hearings

The Court of Appeal has recently considered the question of whether or not hearings before the disciplinary committee should be carried out orally. The Court decided that while the fairness of a hearing is not determined solely by its oral nature and that a hearing may be conducted through an exchange of letters, this does not apply with respect to a hearing before dismissal in the case of gross misconduct, poor performance and/or physical incapacity.

As such, in order to meet the minimum standards of a fair procedure, an employer must afford the employee an oral hearing that additionally complies with other applicable requirements. A hearing that is disposed of by way of exchange of documents shall not meet the base criteria of a fair hearing.

The decision of the Court of Appeal binds the Employment and Labour Relations Court and the Magistrates Court. However, in light of the ongoing pandemic and the directives by the Government relating to social distancing and working from home, employers may need to use technology to meet this requirement.


 

The National Employment Authority Notice

The National Employment Authority ("NEA") published a notice in the Daily Nation, a nationally circulated newspaper, directing employers to submit "Employment Returns" and other information pertaining to their employees for the period ending December 2018, to the NEA on or before 8 July 2019. The NEA also published another notice more recently in April 2020 on its website, directing employers to submit employee returns relating to terminations and lay-offs.

However, under the Employment Act, No. 11 of 2007, an employer who employs twenty-five (25) or more employees must keep a register of the employees with their personal information and must notify the Director of Employment (not the NEA) of vacancies in their establishment or when such vacant position has been filled or abolished. Whilst the Employment Act (Amendment) Bill 2019 proposes to have employers submit their employment returns to NEA instead of the Director of Employment, the amendments to the Bill have not yet been passed. As such, in the absence of any such amendment, employers are only legally required to submit employment returns to the Director of Employment.

 

KEY DEVELOPMENTS FOR 2019


 

Amendments to the Labour Relations Act

Certain provisions of the Labour Relations Act, 2007, which restrict the right of employees in “essential services” to strike were amended in March 2018 as follows:

  • the restriction of the right of employees to strike has been extended to ensure continuation of “essential services” for the preservation of life and health of the population and of property; and
  • the definition of “essential services” has been widened to include: water services; electricity services; health care services; hospital services; sanitary services; air navigational services; meteorological services; fire services; supply and distribution of fuel, petrol, oil, power and lighting services; telecommunications services; and marine and port navigational services.

 

New requirement to contribute to the National Housing Development Fund

As part of the government’s agenda to provide low income housing, the Employment Act was amended to introduce Section 31A which requires employers and employees to each contribute 1.5% of the respective employees’ gross monthly earnings the National Housing Development Fund (“Fund”), subject to a maximum limit of KShs. 5,000.

The employer is required to remit the contributions to the Fund before the ninth day of every month. An employer who fails to comply with this requirement becomes liable to pay a penalty equivalent to 5% of the unpaid contributions for every month that remains unpaid.

These legal requirements are expected to be operationalized once the government puts in place regulations governing the operation of the fund and the benefits that will be made available thereunder.

When Section 31A of the Employment Act becomes effective, it will substantially increase costs of doing business in Kenya and reduce the net income that employees receive.


 

New directives and measures introduced to ensure compliance with Immigration Laws

In May 2018 the Cabinet Secretary responsible for Immigration, issued directives to streamline the work visa application process. The Cabinet Secretary also introduced measures to ensure strict compliance with immigration laws.

It is anticipated that the Department of Immigration Services will continue to implement the Cabinet Secretary’s directives. This will certainly lead to increased scrutiny of work permit applications and possible delays in the processing and issuance of work permit applications.

With thanks to Karen Fulton, Nonkululeko Mkhwanazi, Bulela Mungeka, Julie Mulindi and Sean Omondi of Bowmans for their invaluable collaboration on this update.

Contributors

Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department

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