Introduction
Globally, COVID 19 pandemic has put people at great risk and adversely affected business operations. Immediately the first COVID 19 case was confirmed in Kenya in March 2020, the Government of Kenya issued directives on safety and health. The Federation of Kenya Employers (FKE) issued an advisory urging member to comply with the directives to curb the spread and minimize the risk of infection of the coronavirus at the workplace. These included measures on keeping the workplace and employees safe, providing safety gear, working from home, and reducing travel among others.
We can state that most employment contracts have no express provisions on any cause of action to be taken when there is an occurrence of unexpected circumstances such as the COVID 19. It is also seen that in some industries, such as the manufacturing industries, it is impossible to work from home. It is a necessity for employees in such industries to report to work to avoid underproduction due to a reduced number of employees at the workplace.
As the pandemic is a global occurrence, the following options have been explored by most employers here in Kenya as well as Israel:
1.Working remotely and shifts
The provisions of the Employment Act Kenya state that an employment contract is supposed to indicate the place as well as hours of work. This has been covered under section 10 of the Act. The same Act also provides that an employee should work for six days and rest for a day during the week. This is covered under section 27 of the same Act. Further, regulation 5 of the Regulation of Wages (General) Order provides that such working hours should not be more than 52 hours distributed through the six days of the week.
Kenya has been seen to adopt this strategy which seems to work in so many organizations/companies and even law firms. In as much as employees are working from home, there has also been an adoption of working in shifts. This is an effort that is seen to reduce the number of people at the place of work as employers adhere to the health protocols from the Ministry of Health as well as section 36 of the Public Health Act which provides for the rules that will prevent spread of diseases.
In a comparative study with Israel, at Shibolet Law Firm, we see the adoption of working remotely for a certain period. The working from home policy has been ongoing from last year March. Employees in the firm were immediately forced into quarantine as they observed the safety protocols put in place by the government. In adjusting with the adverse effects of COVID 19, the employment contracts were adjusted to provide for working remotely for a specified period, 2 months, 40 hours a week then return to work on a shift basis. After the two months period of working from home ended, the employee contracts were further adjusted to provide that employees will work from home for a day within the week for six hours.
It is an expectation that the Supreme Court of Israel will consider changing the provisions of their employment laws to ensure working from home has been covered. As an internal policy by the firm which was also put in place, the return to work on a shift basis would only apply to employees who have been vaccinated.
Employers in Kenya can seek to adopt such internal measures/policies on vaccination to reduce the spread of the virus at the workplace on a shift basis. Also, employment contracts can be adjusted to ensure that working virtually has been expressly provided for as section 10 of the Employment Act provides that the place of work must be provided for.
Further, the working from home policy has been adopted by several employers here in Kenya. This is a move that is seen to be cost effective from both sides of the divide, employers and employees. It is a move which has introduced flexibility in most industries in as much as there is reduced business. Such a policy has also seen the reduction of employees salaries and it is imperative that employers continue seeking consent from employees before the adoption of such measures.
2. Salary adjustments
Kenya’s labor laws as well as the Constitution of Kenya have been drawn to ensure the protection of individual rights and freedoms. Article 41 of the Constitution provides for fair labor practices which includes fair remuneration under Article 41 (2). This is an important aspect of ensuring the employee’s welfare for an employee to be able to live decently by affording the basic commodities of food, shelter and clothing.
It also means remuneration that is adequate to the services rendered by an employee. It involves a measure of certainty which is why it is important that the remuneration paid to an employee is discussed and agreed upon before services are rendered.
While the Employment Act has not expressly provided for the reduction of salaries, the Courts in Kenya have had to decide on what entails salary reduction. In the case of Ibrahim Kamasi Amoni versus Kenital Sotal Limited [2018] eKLR, the Court stated that for a reduction of salary to be valid, an employer must obtain the approval of the employee by communicating the reduction to such an employee through a letter/notice. Such a letter or notice must be accepted by the employee.
Further, the terms of an employment contract cannot be altered by the employer alone. Consent has to be obtained by the employer. Due to the adverse effects of the pandemic, employment contracts can be altered after obtaining consent from employees. Such employment contracts will be based on reduction of salary, among other items, during the period of the pandemic or until when such a time that the employer is able to sustainably pay remuneration to the employee.
3. Taxes
The government of Kenya introduced tax incentives measures to cushion the country against the economic effects of the COVID 19. These included the reduction of VAT from 16 percent to 14 percent, Corporate tax from 30 percent to 20 percent, turnover tax from 3 percent to 1 percent and a total tax exemption for workers earning Kshs.24,000 and less plus revised Pay As You Earn (PAYE) tax brackets which will greatly improve liquidity.
However, that was since been revised on 24th December 2020 and a reversion of the original tax rates done by the government. The National Treasury also revised the tax bands for salaried workers, which will see them pay a maximum 30 per cent tax on any earnings above Kshs. 32,333. The government has however retained the 100 percent tax relief for those who earn less than Kshs. 24,000.
In Israel, the government on 27th March 2020 published Temporary Regulations to provide tax-relief measures related to the pandemic. This included including extending tax deadlines, freezing enforcement actions, creating a special loan facility for SMEs as well as increasing flexibility in the employment market. The government was also seen to allow entrepreneurs affected by the pandemic apply for decrease of social security advance payments.
4. Way forward
Several employment contracts, if not all, lack a clause on the steps to be taken when there is a pandemic. Many employers have been left at a dilemma on how to ensure sustainability of their business and at the same time avoid the economic risk of claims arising from unfair labor practices.
It is important that for employers to come up with clauses that will provide for the steps that need to be taken in the event of a pandemic such as COVID 19. This is because there is no guarantee as to how long the pandemic will be with us. Employers also need to come up with internal policies that will ensure the proper functioning of such an organization/a company during this pandemic as well as any other unseen pandemic. What is likely to happen will be a hybrid model in which employees will work partly from home and partly from the office.
Article by Rodgers Muyodi who is a Junior Associate at MMAN. His areas of specialisation are around employment law, pensions law, corporate and commercial work and trademark law.
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