ELA Global Employment Law Year in Review series is classically the Employment Law Alliance’s most popular series of the year, focusing on the most impactful regulations of 2022 and forecasting what employers can expect in the current year. ALN Kenya Partner Sonal Sejpal spoke to Nuno Gouveia Partner at Miranda Alliance on the reflections focusing on the most impactful regulations in the employment market in Kenya.
What were the Most Significant Legal Changes in 2022 in Kenya that Impacted Employers
In 2022, we had an amendment to the Employment Act which significantly impacts the way recruiters conduct background checks on prospective employees. It was common in Kenya for a recruiter to request a prospective employee for clearances like Social Security and tax before even determining whether they were going to make an offer to them. And getting those clearances actually come at a cost. Parliament recognised that, and now the law was changed so that those clearances can only be asked for if there’s an actual intention to make an offer of a contract of service.
The other change that happened last year was in the healthcare space. We have a national state-run health insurance fund where all employers are required to contribute to their employees. And that applied even where an employer had private health insurance for their staff. The new amendment there, which is welcome, is that private employees can seek an exemption from matching their employee contributions to that state-run fund. Last year, we also saw some significant developments in the data protection and privacy space and some of those impacted employment matters. For example, we have regulations that were effective in July 2022 that mandate the registration of data processes and data controllers, which would obviously apply to most employers. Now, those regulations exempt certain data processes and controllers, but the exemption is quite small. So if you are a small firm with less than ten employees or you have a turnover of less than the equivalent of about USD 100,000, then you may be exempted.
We also have seen a number of developments in relation to the implementation of the rules around data protection and privacy infringements. We have had our very first rulings which included a ruling by the High Court that said data subjects must first exhaust their legal remedies that are set out in our data protection law before they can go to court. This means that if anyone has a complaint, they must first make those complaints to the Data Protection Commissioner, and they can only go to court if they are not satisfied with the commissioner’s process or determination. There have been a number of decisions that have been meted out by the Data Protection Commissioner. One includes a law firm that complained about the law firm’s employees for allegedly leaking their client’s confidential information, including personal data. There was also an enforcement decision that was made against one of the largest private hospitals in Kenya following a complaint by a patient that one of the hospital’s staff members had contacted the patient inappropriately and the data commission issued its first fine to that entity. The message that we are getting from the data protection Commissioner’s office is that she is aggressively exercising her mandate.
And our advice to employees and employers is to be cautious and make sure that employers do not contravene the law. Training staff on legal requirements and restrictions is a key part of that responsibility. Lastly, as far as developments are concerned, is a case that was determined by the employment court last year relating to the validity of certain sections of our National Social Security Fund Act. – Sonal Sejpal, Partner, ALN Kenya
What is interesting about that is that on 3 February 2023, that decision was nullified. This means an extra financial burden on employers since they’re going to have to make significantly more contributions on behalf of their employees to the National Social Security Fund. Already in the last few days, the fund has announced that its immediately increasing the monthly contribution requirement. And this is gaining a lot of heat, as it were, in the national press and the media.
The Impact of Changes in Government Leadership on Employment Law over the Past Year
The elections were held in August of last year, and on the whole, there was a peaceful transfer of power to a new administration. Given the height of political activity that we saw last year in the lead-up to the elections, we expect political activity to be significantly slower this year. However, as with every government change, new leaders are appointed to lead ministries, state corporations and public bodies. And that’s really the phase we’re in today.
From the pronouncements of the government, both before and after elections, we think its key priorities as far as employment matters are concerned, is the development of universal health care cover, as well as a significant increase in Social Security contributions, which has actually happened as a result of the court case mentioned earlier.
To Adopt or Not to Adopt Remote Working
Since the onset of COVID-19, in 2020, there have been significant changes, obviously in the working environment for white-collar jobs. It’s important to note that Kenya did not have lockdowns but there were curfews. Government guidelines encouraged employers to allow workers to work from home where possible as a temporary measure. But for many organisations, they have become the norm, for example, the big four firms like PwC and Deloitte are now allowing their employees to continue to work from home permanently despite COVID-19 being almost a thing of the past. Some firms, for instance, have a hybrid system for some members of staff, and they are allowed to work from home for two to three days a week.
Law firms on the other hand are increasingly requiring people to work in the office more because they find that working on transactions in teams is better in person than virtual. But what these shows are the gaps. Organisations are considering several questions where the current legal framework does not actually help for example, if asked, can an employer be liable for injuries sustained by an employee who is working remotely? That is not clear. What injuries can be classified as work injuries? And to what extent is an employer liable if injuries are sustained at an employee’s home whilst working remotely? Partner Sonal Sejpal, ALN Kenya
The law in Kenya does not extend to those sorts of questions. In Mauritius, the law has taken a step to address this by requiring remote workers to notify employers of their offsite workstations and giving the employer access to assess the suitability of the workstation to ensure that the performance of work does not pose a threat to the employee or their family.
These are the kind of gaps we need to fill in Kenya. We do not have any laws around whether employers have a duty to provide employees with any tools and equipment, such as a proper desk and chair, and an Internet connection if they are working from home.
A particularly interesting question has arisen, and this is not because of COVID, but it is interesting as a result of, the perception that employees can be tasked to do work at odd hours. And this is a result of a draft law that has come to our attention. It is a proposal at the moment that has been introduced by a senator, and it is the right for workers to disconnect so that they cannot be contacted by their employers after working hours. There is an exception to this, and that’s when an emergency arises from work that falls within an employee’s responsibility.
However, it is not clear what constitutes an emergency. This is the second time in a year that this bill has come to our attention. Last year there was a similar bill, but because of the general elections, it lapsed and it has come back to the drawing board again. The first time it drew a lot of criticism from the Federation of Kenya Employers, the Ministry of Labor, and other sectors. We need to deal with this particular bill to see what happens. Similar arguments have been raised that the legislation could scare away foreign investors if the bill was to be adopted.
Predictions for 2023 regarding Employment Law Updates. Significant Impact on Human Resources and on Employers in Kenya
The most impactful changes will revolve around this right to disconnect after working hours. It is going to be very difficult for an employee to enforce a breach of that right in court without ruining a relationship with an employer.
Given the state of our economy and the financial predicaments that the country is in because of a weak currency, inflation, huge debt burden, etc., having a job is actually going to be more important than employers deciding not to employ because of these kinds of provisions.
Another big change that we will see and hear more of is in relation to the unemployment Insurance Authority Bill, which has been brought before Parliament. The bill seeks to create an unemployment insurance fund which will provide benefits to unemployed persons. The fund would be funded by the government, contributions by employers, donations and grants among others. Even though the Act has a noble purpose, it is difficult to see how it can be implemented in the near future considering Kenya’s current economic climate.
There is a long way to go before we can provide these kinds of benefits to our population. There are other issues that could be addressed that could benefit the population this is in relation to the issue of part-time working and corresponding benefits. It has been realised during the pandemic that there is a gap in the law. – Sonal Sejpal, Partner, ALN Kenya
Our laws are drafted on the basis that everyone is part-time and working for one employer. In Kenya, we actually don’t deal with the issue of part-time working or part-time benefits or outsourcing, which is also gaining popularity. This is where we should put our focus for the year 2023.
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This article was first recorded by the Employment Law Alliance.