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Employment Act (Amendment) Bill, 2019

Parliament, the Kenya Law Reform Commission and the State Department for Labour are in the process of reviewing the provisions of the Employment Act, 2007 (the Act). The proposed amendments to the Act will constitute some of the most significant change to the employment law landscape in Kenya.

The Employment Act (Amendment) Bill, 2019 (the Bill) seeks to align the Act with the Constitution of Kenya, 2010 (the Constitution) and recent trends in employment law. Among the significant changes the Bill proposes is introduce provisions touching on implied employment, normal working hours & overtime, transfer of undertakings, protection of confidentiality and trade secrets, adoption, surrogacy and education leave, sick leave, gratuity, outline of the disciplinary hearing process, constructive dismissal, suspension of employees from employment and protection of employee personal data.

Below is a table highlighting the proposed amendments to the Act.

Key Point

Employment Act, 2007 provision

Employment Act (Amendment) Bill, 2019 proposed changes

1.                 

Implied Employment

 

 

 

An employee under the Act is defined as a person employed for wages or a salary and includes an apprentice and indentured learner.

An employee includes a person who works under an implied employment contract. If the Bill is passed, it will be interesting to see how the Courts interpret this provision noting that an implied employment contract is not defined in the Bill.

2.

Normal Working Hours and Overtime

Overtime is not defined in the Act.

Normal working hours are set at twelve (12) hours for each working day whereas overtime is defined as any hours of work in excess of the normal hours of work.

 

As you are aware, most Kenyan companies have adopted the eight (8) hour daily work shift as their normal work shift. It is reasonable to expect this proposal to have a significant impact on
several businesses and organisations.  

3.

Transfer of Undertakings

The Act does not contain provisions on Transfer of Undertakings.

The Bill defines an Undertaking as a trade or business. This means that if the provisions on the Transfer of Undertakings are passed, they will have a wide application.

 

In the past, some employment stakeholders have rightly or wrongly held the view that the Transfer of Undertakings lead to the loss of employment or redundancy. Considering this interpretation, the Bill states that the Transfer of an Undertaking will not automatically lead to the loss of employment or redundancy.

 

If passed, the Transfer of Undertaking provisions will create much needed clarity on the status of employees during the transfer of businesses, mergers, acquisitions and corporate restructuring.

4.

Prohibition on Restraint of Trade Provisions

 

 

 

Protection of Confidentiality and Trade Secrets

These provisions are not in the Act.

Restraint of Trade Provisions, for a reasonable period, restrict an employee from obtaining new employment in order to protect confidential business information and material from competitors. The Bill declares all contractual restraint of trade provisions void or invalid. It appears to us that the drafters of the Bill consider it unreasonable to restrain employees from obtaining employment due to the scarceness of jobs and the prevailing socio-economic conditions of the country.

 

Be that as it may, the Bill states that an employment contract can prevent an employee from disclosing any confidential information or trade secrets acquired in the course of their employment for a reasonable period. This provision will go a long way in assisting businesses to protect sensitive business information and material.  

5.

Education, Adoption Leave, Surrogacy Leave and Compassionate Leave

The Act does not contain these provisions.

 

 

The Bill proposes to introduce education,
adoption, surrogacy and compassionate leave.

6.

Sick Leave

The Act contained provisions touching on sick leave.  

The Bill proposes to increase sick leave for each employee to thirty (30) days with full pay and a further fifteen (15) days sick leave with half pay in each period of twelve (12) consecutive months of employment.

7.

Gratuity

The Act contains elaborate provision on gratuity.

The Bill proposes to enhance the current provisions on gratuity in the Act by fixing gratuity to fifteen (15) days for each completed year of employment. This proposal cures a lacuna that previously existed in the Act.

8.

Disciplinary Hearing Procedure

The Act does not contain similar provisions.

The Bill sets out a detailed and mandatory procedure for conducting a disciplinary hearing. The disciplinary procedure seeks to give employees a fair hearing as protected in the Constitution.

9.

Constructive Dismissal

The Act does not contain any provisions on constructive dismissal.

The Bill states that an where an employer constructively dismisses an employee it will be considered as unfair termination under the Act. This provision seeks to protect employees from exposure to intolerable working conditions from certain employers.

10.

Mandatory  Suspension from Employment

The Act does not contain provisions touching on suspension of employees from employment.

The Bill proposes that an employer may suspend an employee for period of fourteen (14) days with full pay. In our view, this provision progressive and is likely to enhance discipline in organisations and an employer’s oversight over employees.

11.

Protection of Employee Personal Data

The Act does not contain any provisions on the protection of employee personal data.

The Bill contains elaborate provisions touching on protection of employee personal data which in our opinion give meaning to Article 31(c) of the Constitution on the Right to Privacy.

 

The highlight of the proposed provision is that all personal data shall be obtained from an employee, and in cases where personal data must be obtained from third parties, the employee must be informed in advance and give explicit consent.

If the proposed amendments are passed, businesses and organisations will need to review their employment contracts and policies to for conformity with the amendments. We are available to assist you to understand and comply with any changes to the Act.

If you have any queries regarding the Employment (Amendment) Bill, 2019, the Act, employment law in general and other related information, please do not hesitate to contact James Wairoto at jwairoto@mwc.legal. Please note that this e-alert is meant for general information only and should not be relied upon without seeking specific subject matter legal advice.

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