COVID-19
COVID-19 Impact on Labour
Apart from the obvious health concerns, Covid-19 has brought with it serious economic ramifications to businesses. As a business, you want to deal with your labour in a manner that will not land you into difficulties with the law, and also enable you to bounce back once we are back to normal operations.
Summary of worldwide ongoing events
The International Air Transport Association has warned that global airline revenue losses would ‘probably be above’ the figure of $113bn (£90bn). This is the loss the airlines were experiencing before the Trump administration’s announcement of US travel curbs on passengers from much of continental Europe. Nations worldwide are closing their borders to foreign nationals to curtail the spread of the virus.
The Dutch floricultural industry employs 150,000 people. In addition, around 35% of global flower and plant exports, worth 6.2 billion euros a year, pass through the Netherlands has fallen as no flowers are being imported. The western world is not stocking up on fresh produce, their government agencies are advising them to stock up on canned produce and non-perishables meaning that agricultural produce for export is also affected.
The shipping industry is also coming to a standstill as ships are not bringing in raw materials from China and South Korea for the past month which will eventually affect the manufacturing industry. The hospitality industry in Kenya and across the world has seen massive cancellations of bookings with the government directive to suspend all gatherings and conferences.
As a business you want to have an operational outfit once the crisis is over.
His Excellency, the President of the Republic of Kenya issued a directive on Sunday, 15th March 2020 that citizens self-quarantine and employees work from home in non-essential industries. Following this directive, the Judiciary has issued directives that no courts will be sitting, the Ministry of Lands has also issued a directive that the registries will be closed for the next 28 days and the Business Registration Registry is also closed. The obvious impact on a business is that there is no lending that will happen as no securities can be registered in any of the registries. Some lending institutions have already ceased lending operations due to this.
Labour Solutions to a Business?
The big question is, do you lay off your employees or suspend operations in light of the gloom forecasts?
We opine that all are viable options however the same has to be done in the right manner. Taking into consideration the provisions of the Employment Act, 2007 and the Constitution of Kenya, 2010 every citizen has the right to the highest attainable standard of health and also the right to life which ideally satisfies the requirement to self-quarantine.
To this end, as a business, you can consider letting employees take their sick leave in the interim as the situation is monitored to limit the risk of infection and contagion. The Employment Act provides for 7 days of full pay and 7 days on half-pay in cases of sick leave. In the event, the situation does not improve, then the employee can take their annual leave. An employee is entitled to 21 days annual leave in a year and where the same has been expended then prorate leave would apply.
All this is subject to the financial implications to the business as both sick leave and annual leave are paid.
Some businesses may consider reducing the salaries payable to an employee in the intervening period.
This carries the risk, especially where the employer varies the terms and conditions of employment to the detriment of an employee which is an unfair labour practice. The terms and conditions of employment can only be varied with the agreement of both parties.
As a last resort, businesses can consider redundancy. This should be done after a business has considered all the financial implications attached to the options discussed above. While considering redundancies, businesses should consider the provisions of the Employment Act in ensuring that the process is fair and not marred with irregularities as an irregular process would lead to an unfair labour practice and which is also punishable by the courts and attracts penalties.
For entities that have negotiated Collective Bargaining Agreements in the different fields, it is important to consider the individual circumstances as the Employment Act only provides the minimum standards.
Conclusion
We are hopeful that the tripartite Labour stakeholders being the Ministry of Labour, the Federation of Kenya Employers, and the Central Organisation of Trade Unions and the bodies under them do come up with a way forward in an effort to preserve labour which is a key component of any business. In the interim, the stakeholders should come up with policies that keep people in jobs, create new jobs, change the model of traditional working methods and provide income support to the unemployed
This opinion is not conclusive and has only outlined a few scenarios that are facing our world. Be further advised that we shall not be held liable in the event you rely on the information herein without a further in-depth consultation based on your unique circumstances as the same is a general guideline. Our team at Wachira Wanjiru & Company Advocates continue to be available for any consultations that you may require with regard to arising legal issues. Contact us on info@wachirawanjiru.co.ke or +254720790133 for your business needs. www.wachirawanjiru.co.ke
