The Federation of Kenya Employers Interventions during Covid -19

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 (GoK) issued directives on safety and health. The Federation of Kenya Employers (FKE) issued an advisory urging members 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.

News | 10 July 2020
The Federation of Kenya Employers has worked closely with the Government of Kenya to identify and implement measures for cushioning enterprises and those who have lost livelihoods. FKE is part of the Government’s Rapid Response team and Multi-Agency taskforce under the Ministry of Labour and Social Protection to advocate for these measures on behalf of employers. In April 2019, the Federation conducted a survey on Impact Assessment of Covid-19 on Businesses and the findings have informed our recommendations and services provided to members to cushion enterprises and the economy from collapse.

As part of its advocacy initiatives, FKE engaged the government on several issues to help companies and workers deal with this unfortunate situation. Key among them was the revision of tax measures. The Federation proposed zero-rating of the PAYE tax, VAT on manufacturing companies as well as the 2% Tourism Levy on the gross revenue and a rebate to those who had already paid the said levy. Following this the government introduced tax incentives measures to cushion the country against the economic effects of the Covid -19. These include 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.

The ILO (ACTEMP) has been a wonderful partner for FKE, supporting us with international good practices that we have been able to share with member firms. With ACTEMP support FKE has been able to provide member firms with a ranage of relevant products that have helped them navigate the current envirnoment. Additionally ACTEMP supported FKE with national surveys to measure the impact of the pandemic on the private sector.

Noting that the recovery of the economy will depend on the sustainability of enterprises going forward, the Federation of Kenya Employers called upon the Government to put in place a special Fund to support Business especially MSMEs and SMEs which have been adversely affected by the disruptions. Further, to put in place funds to subsidize payment of salaries for employees for an initial period of 3 months Similarly, the protection of livelihoods and income is dependent on the survival of enterprises. FKE continues to advocate for a Wage relief fund/Wage subsidy to support employers in covering a proportion of payroll costs during this period or future crises of this nature.

In appreciation of the spirit of social dialogue, Kenya’s Social Partners entered into a Memorandum of Understanding detailing a joint approach to managing Labour Relations during the period. The Framework Agreement is a demonstration of goodwill, trust and understanding by the social partners during these unprecedented times. The Agreement emphasizes the need for social dialogue, reporting cases of infection, collaboration in data collection and enhancing safety and health at the workplace. This has been useful in managing the current terms and conditions of service arising from Collective Bargaining Agreements (CBAs) and employment contracts including monetary clauses on wages, allowances and benefits that may not be realized during Covid-19 pandemic.

In view of proposed laws aimed at guiding the Country’s response towards the pandemic, the Federation was part of the discussions on the Pandemic Response and Management Bill 2020 whose provisions would have caused further harm and burden to employers during the period. In a sitting with the Senate FKE implored upon the law makers to make use of the existing legal intruments including the Constitution of Kenya 2010, the Employment Act and Social dialogue.

The fact that the pandemic has hastened the changes expected in the concept of the Future of Work, the Federation of Kenya Employers repackaged its mode of engagement with member organizations. FKE has continuously engaged members through Webinars on various topical issues on matters affecting them during this season. Additionally, FKE enhanced online membership services through a dedicated Hotline, Telephone calls, Virtual meetings and live chats to offer real-time support and keep abreast of member concerns. A plan to enhance digitisation of FKE operations is being implemented.

As the clamor for reopening the economy gains momentum, the Federation prepared members for the resumption of work by providing protocols and guidelines. These guidelines provide details to steer enterprises to a safe return to work seeing that this is the new normal. Moreso to reassure customers, clients and employees of the general safety of their processes and products.

Lastly, the Federation continues to engage, stakeholders and the public on matters concering unemployment, employers and employees challenges, mediation during the period through the media, webinars and other platforms. FKE remains a leading influencer advocating for social dialogue in managing labour relations in the country.