practice area articles
By Julie Mulindi, Sean Omondi ,Karen Fulton, Nonkululeko Mkhwanazi and Bulela Mungeka
Back to International Employment Law
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.