COVID-19 Pandemic Impact on Business.

April 14, 2020

Preamble

Agimba & Associates, Advocates, Labor and Employment Practice Group has been keeping abreast of the rapidly evolving COVID-19 pandemic. Informed by governmental and health guidance, legislative developments, and industry practices, the
A & A team has been counseling clients grappling with legal and practical challenges. There are issues addressed in Kenyan legislation that are important for employers to consider. Some of these issues include the following:

The Corona virus epidemic is a ‘Black Swan” event. With this in mind we have provided some legal consideration to have in mind.

Operational & Risk Oversight

Monitor, identify, prioritize and manage potentially significant risks to business operations due to the business closures which may be over a prolonged period of time and all other government directives.

Business Continuity

Consider whether business continuity plans are in place appropriate to the potential risks of disruption identified, including relevant contingencies, and continually reassess the adequacy of the plans in light of developments. Key issues to consider include:

  • Employee/Talent Disruption - As more employees begin working remotely or are unable to work due to disruptions caused by COVID-19, continually assess what minimum staffing levels and remote work technology will be required to maintain operations. (Also, as noted above, consider how to mitigate the economic impact of absences due to illness as well as closures of certain operations on employees).
  • Work from Home-Impact - The viability of remote working for employees and companies preparedness.
  • Financial Impact and Liquidity - Review the near-term and longer term financial impact (including the ability to meet obligations) of the COVID-19 pandemic and the related impact of the extreme volatility in the financial markets. Consider the need to seek additional financing or amend the terms of existing debt arrangements.
  • Key Person Risks and Emergency Succession Plans - Consider whether an up-to-date emergency succession plan is in place that identifies a person who can step in immediately as Headmaster/MD in the event the Headmaster/MD contracts COVID-19. Consider the need to implement similar plans for other key persons.
  • Incentives - Consider whether incentive plans need to be reworked in light of the circumstances, to ensure that appropriate behaviors are encouraged. Consider delaying setting incentive plan goals until the uncertainty has subsided or try to build in flexibility with respect to any goals set.

There are issues addressed in Kenyan legislation that are important for employers to consider. Some of these issues include the following:

Sick Leave

The Employment Act 2007 minimum directive is that, after two consecutive months of service with his employer, an employee shall be entitled to sick leave of not less than seven days with full pay and thereafter to sick leave of seven days with half pay, in each period of twelve consecutive months of service, subject to production by the employee of a certificate of incapacity to work signed by a duly qualified medical practitioner or a person acting on the practitioner’s behalf in charge of a dispensary or medical aid centre.

Employers have the discretion to provide for longer periods of sick leave. New guidelines have to be drawn by employers for sick leave, compassionate leave and even quarantine leave.

Discrimination & Termination of Employees

The spread of the Virus has seen an increase in profiling of people of different races not only in Kenya, but around the world.

An important question to consider is how an employee would be treated in the event they were to become infected with the Virus or are suspected of having been infected. Both the Kenya Constitution and the Employment Act and Occupational Safety and Health Act (OSHA) prohibit discrimination on the basis of several factors, including race, nationality, and health status. It is therefore important for employers, whilst putting in place policies to deal with the contraction and spread of the Virus, to carefully consider their actions in order to avoid any discrimination claims or discriminatory treatment of affected staff. Employers should also consider how health information of affected employees will be protected because such information is considered as “sensitive personal data” that is protected under the Data Protection Act.

In addition, while employers are entitled to terminate one’s employment on the ground that an employee is too ill to work, due care and sensitivity must be exercised before this is done and due process for termination as a result of incapacity has to be followed. Termination of an employee because they have contracted an infectious disease may amount to discrimination and we would advise that legal advice is sought beforehand.

Work from Home Policies

Kenyan Labour laws provide for ‘place to work’ thus do not provide for ‘work from home’ guidelines as the preferred mode for employees by government in the current pandemic situation. it is advisable for employers to seek legal guidelines in establishing new contracts which include a work-from-home guidance . This is crucial in ensuring performance guidelines and targets are still met by the Employers.

Duty of Employer

According to the Occupational Health and Safety Act 2007 (OSHA ), Employers must take measures to minimise the risk of contamination and spread of the Virus in the workplace to ensure business continuity. The provision of such information, health and policy statements, instruction, training and supervision as is necessary to ensure the safety and health at work of every person there.

During this period of the Covid-19 pandemic. The government has released various directives on work-at home, curfew impositions on non-essential services. An Employer who fails to comply with a duty imposed on him under OSHA commits an offence and shall on conviction be liable to a fine not exceeding five hundred thousand shillings or to imprisonment for a term not exceeding six months or to both.

Under the Kenyan law, an employer shall not dismiss an employee, injure the employee in respect of the employee’s employment, or alter the employee’s position to the detriment of the employee by reason only that the employee makes a complaint about a matter which the employee considers is not safe or is a risk to his health.