THE LEGAL IMPLICATIONS OF COVID-19 SELF-ISOLATION/ QUARANTINE ON EMPLOYMENT CONTRACTS IN KENYA

We face unprecedented and uncertain times as the numbers of global Coronavirus 2 (COVID-19) cases continue to rise. Whilst still relatively early days in Kenya, the economic ramifications are likely to be significant.

Taking into consideration the fourteen (14) day quarantine/self-isolation recommendation given by the World Health Organization (the WHO) and the Government of Kenya for persons suspecting to have been in contact with COVID 19 and the steps other Countries have been forced to take, there is likely to be an effect on existing employment contracts.

In Kenya, the Employment Act 2007 (the Employment Act) provides for the terms and procedures to be undertaken by employers in fostering the right to fair labour practices. We set out the five main approaches that employers can resort to in the midst of the aforementioned recommendations:

1. Paid/Unpaid Sick Leave

Under the Employment Act, provided an employee has completed two consecutive months of employment, they are entitled to sick leave of not less than seven (7) days with full pay and thereafter to sick leave of seven (7) days with half pay.

Rather unhelpfully, the Regulation of Wages (General Order), provides different provisions.  It states that an employee is entitled to up to thirty (30) days sick leave on full pay and a further fifteen (15) days sick leave on half pay.  Employees may seek to rely on these more favorable provisions, and our Courts are likely to apply them in the circumstances.

2. Paid/Unpaid Annual Leave

 According to the Employment Act, employees are entitled to not less than twenty-one (21) working days of leave with full pay every twelve consecutive months of service.

3. Compassionate Leave

 Compassionate leave is defined as the time off work that is granted by an employer based on personal reasons.  While the said leave is mentioned in the Employment Act, it is far from detailed and remains to be issued upon the employer’s discretion.

4. Redundancy

Redundancy is defined as “The loss of employment occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous…”.

In the event that an employer declares its employees redundant, they must comply with the provisions of the Employment Act.  The provisions are not straightforward and must be followed carefully, for instance the employer must:

• Have a prior consultation with the affected employees at least one (1) month before the date of the intended redundancy;
• Give a notice to the labour officer;
• Provide severance pay at the rate of 15 days salary for every completed year of service; and
• Issue a certificate of redundancy.

Taking into consideration the vigorous procedure for rendering redundancy, it is not suitable to render an employee redundant if one is incapable of proving that the services of the employee are superfluous.  We would recommend bespoke legal advice is sort should this course of action be considered.

5. Frustration

The doctrine of frustration refers to the incapability of the performance of a contractual obligation through no fault of either party.   The contract becomes impossible to perform, and as a result the parties are discharged from their respective obligations.

For a party to succeed in claiming frustration, they have to show that, in the relevant contract, the parties never agreed to be bound in the fundamentally different situation that has unexpectedly occurred.  Further, one must illustrate that the event that frustrated the contract is permanent.

We note, the doctrine of frustration is a more viable claim for commercial contracts as opposed to employment contracts.

Conclusion

In accommodating the WHO and the Government of Kenya’s directives to-date, and keeping in mind the statutory obligations outlined above, we would encourage a more pragmatic, transparent and prepared approach, which centres around commercially minded but fair (re) negotiations between employer and employees.   It is worth noting that Section 10(5) of the Employment Act allows both the employer and employee to re-negotiate the terms of their contract to accommodate additional sick leave days, reduced pay and annual leave.

While we can remain hopeful that the impact of COVID-19 on businesses and individuals in Kenya does not worsen, Employers should prepare and plan a strategy to deal with the unpredictable and challenging times ahead.

The above is a brief summary of the relevant provisions of the Employment Act.  It does not constitute legal advice and is only provided for information purposes. Matters should be considered on a case by case basis with particular regard to the applicable Employment Contract.

For further guidance or advice, please do feel free to contact us.

23 March 2020