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Kenya: Draft amendments to the Employment Act would introduce a host of new entitlements

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October 21, 2019

If enacted, the amendments would require employers to review their policies and practices across a range of subjects, including overtime pay.

Employer action code: Monitor

The proposed changes to Kenya’s Employment Act would amend existing provisions on a wide range of subjects - including end-of-service gratuities, transfers of undertakings and overtime pay - while also creating new protections and entitlements, such as procedures for disciplinary hearings and a framework for data privacy protections for employees.

Key details

Proposed changes include the following:

  • Provisions would be established for the treatment of overtime (not presently defined by the Act) to require employee agreement on a number of variables, including working overtime, overtime compensation of at least 150% of normal pay for hours of work in excess of normal weekly hours (200% for work on a public holiday or normal rest day), and a cap on daily work time at 12 hours (including overtime).
  • Night work would be defined as work between 10:00 p.m. and 6:00 a.m., and require employee agreement and compensation in the form of a shift allowance or reduction in working time (both unspecified). The employer would also be required to provide transportation to and from work and home for night workers and provide periodic medical examinations.
  • The minimum employer-paid end-of-service benefit (service pay) would be 15 days’ pay times completed years of service. The current provisions on service pay do not stipulate the minimum amount payable, but they do exclude employees covered by social security or a qualifying employer plan from eligibility for service pay. The aim of the proposed change is somewhat unclear, as most - if not all - employees would remain ineligible for service pay under the provisions of the draft amendments.
    - Note: Service pay is different from severance, which is payable at 15 days’ pay per year of service but only for collective redundancies.
  • Employer-paid sick leave would increase from the current level of seven days at 100% of basic pay and seven days at 50% of basic pay, to 30 days at 100% of basic pay and then 15 days at 50% of basic pay.
  • Protections against discrimination in employment would be expanded to include age, health status, belief, culture and dress as protected characteristics. Companies with five or more employees would be required to have formal policies for handling sexual harassment claims (the mandate currently applies to companies with 20 or more workers).
  • The use of post-employment, noncompete provisions or agreements would be invalidated.
  • An employer would be required to consult with affected employees in advance of a transfer of undertaking, with the stipulation that employees be transferred to the new employer without any loss of benefits or entitlements. The new employer would also be liable for all contractual benefits of the transferred employees from the start of their employment with the seller.
  • A new data privacy regime would be established for the protection of employee personal data, modeled on the European Union’s Global Data Protection Regime (GDPR).
  • New provisions would be enacted for employer-paid leaves of up to 10 days for study leave, five days for bereavement leave (if annual leave has been exhausted), one month for adoption leave (or in the event of stillbirth) and two months’ maternity leave in the event of surrogacy (for the commissioning parent). Adoption leave would apply only for the adoption of children under the age of two.

In a separate matter, the government amended the regulations on occupational retirement plans, effective June 17, 2019, to eliminate provisions that allowed employees to withdraw up to 50% of their vested employer contributions (and related earnings) on separation from employment prior to normal retirement age. Under the new regulations, the money cannot be claimed until retirement. There is no change to the treatment of employee contributions, which can be fully withdrawn after employment has ended.

Employer implications

Employers with a company retirement plan should review and revise their plan rules in view of the new regulations on end-of-service withdrawals. If enacted, the amendments to the Employment Act would require a far more in-depth review of policies and practices across a range of subjects, particularly as some topics, such as overtime pay, are not currently regulated by the Act.

Contact

Esther Kadzo
Gras Savoye - Willis Towers Watson (Kenya)

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