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Kenya Cabinet Approves Splitting of NHIF (National Health Insurance Fund)

Kenya Cabinet Approves Splitting of NHIF (National Health Insurance Fund)

In honor of the President’s pledge to accelerate Kenya’s attainment of Universal Health Coverage (UHC), the Cabinet has considered and approved four crucial bills that promote healthcare, to be transmitted to Parliament. These are:

  1. The Primary HealthCare Bill, 2023
  2. The Digital Health Bill, 2023
  3. The Facility Improvement Financing Bill, 2023
  4. The Social Health Insurance Bill, 2023

These four bills usher in a new paradigm in the legal and institutional framework for healthcare in Kenya by repealing the current NHIF and establishing the following three funds in its place:

  • Primary Healthcare Fund
  • Social Health Insurance Fund
  • Emergency, Chronic, and Critical Illness Fund

The NHIF has experienced a steady decline in fulfilling its mandate in recent years. The Kenya Association of Private Hospitals (KAPH) had even banned the use of the NHIF card due to nonpayment by the insurer. This situation left many Kenyans in distress because the NHIF is the most popular health insurance in the country and is relied upon by the majority. Patients have had to pay in cash or go untreated. While public hospitals still accept the NHIF card as a mode of payment, the insurer only covers limited services, prompting patients to seek assistance from private hospitals. The Cabinet’s decision to repeal the current NHIF is a significant relief for Kenyans.

We will be updating the public on the provisions of these bills as they are published. We hope this information helps in understanding the current developments regarding the repeal of the National Health Insurance Fund and the establishment of the Primary Healthcare Fund, Social Health Insurance Fund, and Emergency, Chronic, and Critical Illness Fund.

Please note that the contents of this newsletter are intended to provide a general guide to the subject matter. It should not be relied upon without legal advice on its contents.

For further information or legal assistance on compliance or any other legal issue, please contact us at info@wka.co.ke, wakilihub.co.ke/, +254 798 03 580, Nairobi Hub: Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • Founding Partner: William Karoki
  • Lawyer: Florence Mwende
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A NEW DAWN FOR FOREIGN INVESTORS IN THE ICT SECTOR IN KENYA

A NEW DAWN FOR FOREIGN INVESTORS IN THE ICT SECTOR IN KENYA

The Information and Communications Technology (ICT) Sector Policy Guidelines 2020 in Kenya introduced a requirement for foreign firms licensed to provide telecommunications services to have at least 30% of their shares held by locals within a three-year grace period.

The rationale behind the 30% local shareholding requirement was to ensure national security, attract foreign investment, and create employment for Kenyans. The policy aimed to equip Kenyans with sufficient knowledge to help local ICT firms flourish. However, it did not achieve its mandate as the number of foreign investors in the ICT sector declined significantly. Foreign companies found the policy prohibitive and were reluctant to find local partners, making it harder for existing startups to increase their stake beyond the 30% equity threshold.

Consequently, President William Ruto proposed the removal of the mandatory local shareholding requirement as part of the fiscal policy changes expected in the Finance Bill 2023 and the Budget Policy Statement. This proposal was made during the American Chamber of Commerce (AmCHAM) Summit held on March 29th and 30th, 2023, in Nairobi. In a Cabinet dispatch dated July 18th, 2023, the Kenyan Cabinet approved the President’s proposal. The dispatch stated that the rationale for scrapping the 30% requirement is “part of the reforms to enhance Kenya’s overall ease of doing business index while also fortifying legislative consistency in the governance framework for foreign investments. The policy shift is geared towards facilitating technology and knowledge transfer as well as aiding the expansion of the digital economy by positioning the country for increased foreign investments in technology as envisioned in the Administration’s Bottom-Up Economic Transformation Agenda (BETA).”

Following Kenya’s Cabinet approval of abolishing the mandatory local shareholding requirement in the ICT sector, Elon Musk launched his satellite Internet firm, Starlink, in Kenya on July 19th, 2023. Starlink partnered with a local internet company, Karibu Connect, as its first authorized distributor in Kenya. The launch made Kenya the sixth African country to be explored for business by Starlink after Nigeria, Mozambique, Mauritius, Rwanda, and Comoros. Shortly after the launch of Starlink, United States (US) Ambassador Meg Whitman attended the 8th Devolution Conference in Eldoret. In her address, she strongly pitched Kenya as Africa’s best investment destination for the international community. The envoy did not hide her enthusiasm about Kenya’s investment prospects and climate, describing the country as the region’s ICT Hub and gateway to East Africa.

Local Shareholding Requirements in Other Sectors:

  • Engineering: The Engineering Technology Act No. 23 of 2016 requires a foreign firm to be incorporated in Kenya and have a minimum local shareholding of 51% to be registered as an engineering consulting firm.
  • Aviation: Regulations 5 and 12 of the Civil Aviation (Licensing) require a prospective licensee to be a Kenyan citizen or, if a body corporate or a partnership, to have at least 51% of its voting rights held by the Kenyan government, a Kenyan citizen, or both.
  • Private Security: The Private Security Regulation Act, 2016 mandates a prospective license holder to have a minimum of 25% local shareholding.
  • Pension Funds/Schemes: The Retirement Benefits Act, 1997 requires at least 60% of the paid-up share capital of a scheme administrator to be held by Kenyan citizens unless the administrator is a bank or an insurance company.
  • Shipping: The Merchant Shipping (Maritime Service Providers) Regulations, 2011 require an applicant for a license to be a Kenyan citizen or, if a body corporate, to have at least 51% of its share capital held by Kenyan citizens.
  • Insurance: The Insurance Act (CAP 487) stipulates that not less than one-third of the paid-up share capital of an insurance company must be owned by citizens of the states forming the East African Community or wholly owned by the Kenyan government.
  • Mining: Under the previous Mining Act, a mining license applicant needed 35% local shareholding for a mineral right. The 2016 Mining Act allows the Cabinet Secretary to set capital expenditure limits. If a licensee’s planned spending surpasses this limit, they must list 20% of equity on a local stock exchange within three years of production start. Small-scale operations tied to mineral rights are limited to Kenyan citizens or bodies corporate with 60% local shareholding.
  • Capital Markets: The Capital Markets (Foreign Investors) Regulations require every legal entity that offers securities to the public or a listed company to reserve at least 25% of its ordinary shares for investment by Kenyan citizens.
  • Financial Institutions: The Banking Act (CAP 488) also imposes specific local shareholding requirements.

We hope this information is helpful in understanding the 30% local shareholding requirement in the ICT sector and the effects of its abolishment in Kenya. Please note that the contents of this newsletter are intended to provide a general guide to the subject matter and should not be relied upon without legal advice on its contents.

For further information or legal assistance on compliance or any other legal issue, please contact us at info@wka.co.ke, wakilihub.co.ke/, +254 798 03 580, Nairobi Hub: Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Authors:

  • Founding Partner: William Karoki
  • Lawyer: Florence Mwende
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President Uhuru Kenyatta Signs the Military Veterans Bill into Law

President Uhuru Kenyatta Signs the Military Veterans Bill into Law

On June 15, 2022, President Uhuru Kenyatta signed into law the Military Veterans Bill, 2022 (Military Veterans Act, 2022). This legislation comes at a critical time when the world is grappling with a global mental health crisis. Many retired servicemen have reported suffering from physical and mental trauma, including post-traumatic stress disorder (PTSD), due to the challenging conditions faced during their service. Concerns have been raised over the lack of a comprehensive legal framework to address the special needs of these veterans after retirement. The most publicized mental health challenges facing veteran service members are PTSD and depression. Research suggests that approximately 14% to 16% of U.S. service members deployed to Afghanistan and Iraq have PTSD or depression, and the situation is similar in Kenya.

Key Features of the Military Veterans Act, 2022

Comprehensive Support for Veterans

Proposed by the Leader of the Majority, Hon. Amos Kimunya, this newly signed law aims to improve the quality of life for military veterans (vets) and their dependents. The law covers all those who retired after serving in the Kenya Defence Forces (KDF) and its precursor, the pre-colonial unit named Kenya African Rifles. It applies to those who receive a military pension and were not dishonorably discharged from military service. Veterans discharged on medical grounds will also receive benefits under the Act.

Regulatory and Institutional Framework

The Act establishes a regulatory and institutional framework for managing military veterans’ affairs, including the creation of the Dependants’ Education Fund (DEF) by the Defence Council. The Defence Council, chaired by the Defence Cabinet Secretary, includes the Chief of the Kenya Defence Forces, the commanders of the Air Force, Navy, and Army, and the Defence Principal Secretary. This council is the primary decision-making body for veterans’ affairs.

Defence Forces Retirement Home

The Act also establishes the Defence Forces Retirement Home (the Home), where the Defence Council will determine eligibility for accommodation, services provided, and required contributions. Serving members will contribute to the establishment and maintenance of the Home.

Director of Military Veterans

A Director of Military Veterans, appointed by the Defence Council, will oversee the administrative duties of the DEF and the Home, operating under the Chief of Defence Forces.

Advisory Committee on Military Veterans

An Advisory Committee on Military Veterans will be established to advise and make recommendations to the Defence Council, Cabinet Secretary, or Director of Military Veterans on matters related to veterans and their dependents.

Policy Development and Implementation

The Defence Council is empowered to develop policies on military veterans and consider proposals from the Cabinet Secretary, Chief of Defence Forces, or Director of Military Veterans regarding funding and budgeting for veterans’ affairs. Clause 23 of the Act grants the Cabinet Secretary the authority to make regulations for the enactment and implementation of the Act’s provisions.

Conclusion

The Military Veterans Act, 2022, is a significant step toward recognizing and addressing the needs of Kenya’s retired servicemen and their families. Viva to our soldiers and decorated veterans! The rewards of patriotism are within reach.

For further information or legal assistance on compliance or any other legal issue, please contact us at info@wka.co.ke or visit wakilihub.co.ke/. Our Nairobi hub is located at Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road.

Please note that the contents of this newsletter are intended to provide a general guide to the subject matter and should not be relied upon without legal advice.

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Costly Mistakes to Avoid When Purchasing Property in Kenya

Costly Mistakes to Avoid When Purchasing Property in Kenya

  1. Money Matters
    • Don’t send money directly to the seller or their advocate unless advised by your qualified advocate.
    • Don’t pay the whole amount at once. Deposits should be at least 10%.
    • Don’t pay in hard cash! Always ensure there’s a money trail.
  2. Not Having Your Own Lawyer
    • Don’t engage in any property transaction without appointing your own qualified advocate.
    • Your advocate will advise you on the necessary documents and other important experts such as surveyors and valuers.
  3. Relying on Influencers
    • Don’t make a decision to buy land based solely on journalists, social media influencers, pastors, friends, or TV adverts.
    • Influencers cannot perform due diligence on your behalf.
  4. Buying in Secrecy
    • Don’t buy property without informing your family, close friends, confidants, or spouse.
    • They may provide valuable alternative opinions or warn you of potential risks.
  5. Not Doing a Site Visit
    • Don’t buy property without a physical site visit or through your power of attorney or qualified advocate to ensure the land is vacant.
    • Upon your advocate’s advice, engage a qualified surveyor to map out the beacons on a second site visit.

By avoiding these common pitfalls, you can make a more informed and secure property purchase in Kenya. Always seek professional advice and ensure thorough due diligence to safeguard your investment.

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Fees, Costs, and Taxes Payable When Buying Land or Houses in Kenya (Conveyancing)

Fees, Costs, and Taxes Payable When Buying Land or Houses in Kenya (Conveyancing)

Buyer’s (Purchaser) Costs

  1. Purchase Price
    • Unless advised otherwise by your qualified advocate, let a qualified advocate hold all funds as a stakeholder, not an agent, or jointly by both parties, or by a third party in an escrow account. The purchase price is ideally paid as follows:
      • Deposit: 10% (or higher) of the purchase price on or before execution of the sale/lease agreement.
      • Balance: Remaining purchase price on completion (exchange of documents, transfer of original title, etc.).
      • If it is a gift, state clearly that it is a gift. Never pay in hard cash! Check our Vol 2, 2023.
  2. Professional Fees
    • Qualified Advocate: Minimum legal fees are regulated by the Advocates Remuneration Order (ARO) and based on the value of the subject matter. Avoid agreements for KES 2,000.
    • Qualified Valuer: To value the property.
    • Qualified Surveyor: To obtain maps/mutation at the Ministry (Maps cost about USD 4/KES 400) and resurvey the property.
  3. Nominal Duty to Stamp Agreement
    • The sale/lease agreement must be stamped to be used in a court of law in case of fraud.
    • Cost: Usually USD 20-50/KES 200-500 (expressed in denominations of KES 20, referred to as pounds).
    • The agreement will be stamped with a red dye stamp (in Kenyan pounds).
    • Must be stamped within 30 days, or penalties will accrue.
  4. Stamp Duty
    • 4% for properties within cities and municipalities.
    • 2% of the value for properties outside municipalities/cities.
    • Your advocate will advise on properties exempt from stamp duty.
  5. Bank Fees & Miscellaneous Costs
    • If taking a loan, the bank will charge the property. Charges/mortgages attract 0.1% of the amount secured.
    • Bank miscellaneous costs (RTGS/excise tax).

Seller’s (Vendor) Costs

  1. Land Rent
    • Payable to the government (if leasehold).
  2. Land Rates
    • Payable to the county government.
    • Includes all penalties for late payments.
    • Seller to provide buyer with all clearance certificates and accompanying receipts/bank cheques.
  3. Utility Bills
    • All pending water and electricity bills.
    • All the above costs will be apportioned between buyer and seller. Your advocate will advise on this.
  4. Commission
    • Payable to duly licensed estate agents/brokers.
  5. Partitioning or Subdivision of Land/Building Plans
    • Costs of engaging a surveyor, physical planner, qualified engineer/architect/quantity surveyor.
  6. Consents/Approvals
    • All costs necessary for obtaining consents referred to in our Vol 2 (Commissioner of Lands, Land Control Board, Change of User, County Council Building Permits, etc.).
  7. Probate/Succession Costs
    • In case of succession matters, all probate fees to obtain proper title.
  8. Capital Gains Tax (CGT)
    • Check our Vol 1, 2023.
    • The rate of tax is 15% of the net gain.
    • Your advocate will advise on how to calculate tax and properties exempt.
  9. Bank Loan Discharge Fees
    • If the owner had taken a loan against the property, it must be discharged with consent by the bank. Discharges/reconveyances cost 0.05% of the amount secured.
    • Bank miscellaneous costs/excise tax.
  10. VAT (16%) on Sale of Commercial Buildings
    • On January 17, 2019, KRA was granted a stay of execution on the High Court judgment (civil suit 541 of 2015) until the presumed appeal is heard. For now, VAT on the sale of commercial buildings remains payable.

Buying a House/Apartment + Costs

  • Note that for houses and apartments, the first agreement is called an offer letter, and the sale agreement is known as an agreement of lease. The purchase price is referred to as lease premium.
  • After the passage of the Sectional Properties Act No. 21 of 2020, buyers/owners of apartments will receive a title deed rather than a certificate of lease. Buyers/owners will also have one share in a corporation to manage the common areas.

Seller’s Lawyer Legal Fees

  • 1% of the purchase price.
  • Can be renegotiated by your qualified advocate.

Other Costs

  • Disbursement for Water Infrastructure Costs
  • Electricity Infrastructure Costs: Normally referred to as electricity/power meter & deposit & connection charges.
  • Provisional Service Charge and/or Service Charge: For the first 3 to 5 months, expressed as a percentage of the lease premium.
  • Initial Provisional Infrastructure Levy Deposit: May not be charged.
  • Cost of Transfer of Allotment and Setting Up of Management Corporation
  • VAT on Fees and Disbursements: VAT is payable on legal fees and disbursements at a rate of 16%.
  • Registration of Documents and Pre/Post Search Costs: Green card search and normal search before and after obtaining title, and registration of transfer documents to obtain new title/sectional title.

For more details, visit WKA Advocates.

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President Kenyatta Announces 12% Minimum Wage Increase for Kenyan Workers

President Kenyatta Announces 12% Minimum Wage Increase for Kenyan Workers

The Employment (Amendment) Act 2022 was signed into law on April 4, 2022, by His Excellency the President of Kenya. The following changes took effect on April 22, 2022.

Key Changes:

  1. Streamlined Job Application Process:
    • Employers will no longer require job applicants to produce clearance and compliance certificates, such as certificates of good conduct, EACC clearance, and HELB clearance, at the initial point of a job application.
    • This amendment aims to ease the financial burden on job applicants, especially young, underprivileged individuals, who previously had to spend around KES 6,000 to acquire these certificates.
  2. Elimination of Application Fees:
    • The fees for applying for clearance and compliance certificates have been scrapped. It is now free to apply for these certificates from relevant institutions like HELB.
  3. Public Service Applicants:
    • Job applicants for public service positions will still be required to submit clearance and compliance certificates.
  4. Post-Offer Requirements:
    • Successful job applicants who receive a letter of offer will still need to submit the required clearance and compliance certificates.
    • Employers have the right to withdraw letters of offer if the prospective employees do not submit the requested certificates.

Recommendations for Employers:

  • Employers should review and update their Human Procedures and Policies Manual and Employment Contracts to align with these changes and ensure compliance with the law.

Please note that the contents of this newsletter are intended to provide a general guide to the subject matter. It should not be relied upon without legal advice. For further information or assistance on compliance or any other legal issues, please contact us at info@wka.co.ke.

Visit us at:
WKA Kenya
Nairobi Hub: Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road
Website: wakilihub.co.ke/

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DOES YOUR LAWYER TALK TO YOU? DO YOU UNDERSTAND?

Communicating Effectively with Clients: Simplifying Legal Opinions

Our clients, most of whom are not lawyers, often perceive that lawyers use complex language. This perception is why law schools now emphasize the use of plain English, an area where many lawyers struggle.

Having worked both in a law firm and as in-house counsel, I have had the privilege of interacting with those who issue instructions to lawyers—CEOs, CFOs, government officials, and other managers. A common theme prevails: they simply do not have the time or energy to read through 5-20 pages of dense legalese. They are more concerned with the solutions and recommendations you provide.

Think about it. How often has a client asked you to explain or summarize the advice in your legal opinion? A wise lawyer will summarize the opinion in an email or place it on the first page of the document. In-house counsel are often overwhelmed and do not have time to read the entire document. They rely on the summary you provide over the phone or via email.

Law school teaches us that every legal opinion must follow a chronological order of facts, issues, rules, application of the law/analysis, and conclusion (FIRAC). This method has remained unchanged since the 1600s. While some innovative lawyers have tweaked their opinions to include summaries, the general format remains the same.

Times have changed, and so have the ways we consume information. There is a perception that lawyers are stuck in the past, using outdated terms like “therein” and “wherein.” I strongly believe there should be a radical reform of legal opinions to benefit the client. Making information more appealing and accessible would save time and resources for both parties.

For starters, we could move away from dense prose and use tables or matrices to explain information. Additionally, we could use audio formats to package legal opinions, allowing clients to listen to them. Podcasts, videos, or PowerPoint slides could enhance the consumption of this information. A comprehensive review of how lawyers present information to clients is necessary. For instance, I have not seen the use of emojis in legal documents, yet they are common in everyday communication. The law should reflect changing societal needs.

Current legal opinions are in the dark ages of the Nokia era, while the world has moved to the iOS/Android period. Let us embrace change and develop more engaging ways to present our work.

At PROW, we strive to communicate with our clients by issuing brief and succinct legal opinions, focusing on solutions rather than merely restating the law.

For assistance with any legal issues or general advice, please contact us at info@wka.co.ke.

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Do You Know Your Role in a Construction Project?

Do You Know Your Role in a Construction Project?

“We shape our buildings; thereafter they shape us.” – Winston Churchill

Introduction

Kenya has witnessed numerous instances of collapsing and sinking buildings over the last decade, resulting in the loss of lives and significant economic investments. Additionally, many buildings continue to be condemned by the National Construction Authority (NCA) as unfit for habitation. A final report from an audit ordered by President Uhuru Kenyatta on the state of buildings in Kenya concluded that building collapses are due to poor-quality concrete, lack of proper foundations, and the use of substandard building materials.

It is crucial to understand the roles and responsibilities of different professionals in preventing construction defects.

Owner/Employer/Client

An employer can be an individual, partnership, corporate entity, commercial developer, or the government, who eventually owns the project or sells it after completion.

The employer generates the idea and arranges funding for the project, often securing construction mortgages and other loans. Additionally, the employer provides a scope definition of the work to be done.

Project Manager

A project manager is typically well-versed in the construction industry, often holding a Bachelor’s or Master’s degree in construction-related fields. Employers, who usually have little to no experience, appoint project managers to oversee and manage projects. Once the design phase is complete, project managers assign contractors through a bidding process.

Project managers are responsible for advising the owner on cost estimates, organizing payments, negotiating contracts with architects, vendors, and contractors, scheduling different project phases, and supervising project completion.

Geotechnical Engineer

Geotechnical engineering is essential for high-rise buildings and structures like bridges, ensuring strong foundations. It is a regulated profession under Civil Engineering, and engineers must be registered with the Engineers Registration Board of Kenya (ERB). The ERB website lists all registered engineers at ERB Registered Engineers.

Geotechnical engineers study soil and rock mechanics to determine the properties affecting the project. They assess risks like earthquakes, soil erosion, landslides, and sinkholes, design earthworks, and advise on suitable foundations. They also propose ground improvement techniques to enhance soil load-bearing capacity.

Architect/Designer

An architect plays a significant role in construction projects and must be registered with the Board of Registration of Architects and Quantity Surveyors, as established under the Architects and Quantity Surveyors Act. Registered architects can be found at BORAQS Registered Architects.

The architect conceptualizes the employer’s ideas into blueprints, draws up plans, specifies building materials, and interior finishes, and makes necessary plan variations. Acting as an agent of the employer, the architect ensures the work aligns with the drawings and specifications, coordinating with contractors and project managers. They also collaborate with structural engineers to design safe and aesthetically pleasing structures.

General/Prime Contractor

All contractors must be registered with the National Construction Authority (NCA). The contractor’s role is to realize the architect’s design. In Design & Build contracts, the contractor has additional design responsibilities and provides materials for the architect to select from.

Contractor responsibilities include obtaining permits and approvals, planning and coordinating construction activities, hiring and supervising workers, obtaining materials, managing budgets, and ensuring project completion within stipulated timeframes.

General contractors engage subcontractors for specialized tasks such as electrical wiring, plumbing, carpentry, masonry, air conditioning, painting, and steel fixing.

Quantity Surveyor

A quantity surveyor, registered with the Board of Registration of Architects and Quantity Surveyors, quantifies resources like labor, supervision, plant, and materials required for a project. They provide project budget estimates and analyze the impact of design changes on the budget.

The primary role of the quantity surveyor is preparing the Bill of Quantities (B.Qs), crucial for producing tender documents, managing the tender process, controlling variations, negotiating and assessing claims, valuing completed works, and providing expert witness reports in disputes.

Lawyers/Advocates

Construction law is an exciting field for legal practitioners. Lawyers assist in drafting complex agreements, creating instruments for banking facilities, negotiating construction contracts, warranties, advising on compliance, and guiding dispute resolution processes.

Conclusion

The construction sector is a diverse industry involving multidisciplinary professions. It is in the best interest of society for these professionals to collaborate harmoniously to construct safe, durable, and environmentally friendly structures.

For assistance with real estate and property development, contractual management, construction, infrastructure projects, public-private partnerships, conveyancing, real estate financing, or general advice, please contact us at info@wka.co.ke.

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A Comprehensive Guide to Annual Leave in Kenya: Entitlement, Accrual, Carrying Over, and Forfeiture

A Comprehensive Guide to Annual Leave in Kenya: Entitlement, Accrual, Carrying Over, and Forfeiture

By Admin | May 27, 2022

This article aims to clarify Section 28 of the Employment Act of Kenya (“the Employment Act”), which grants employees the statutory right to annual leave.

In my previous role as in-house counsel, I found that many employees are unaware they are entitled to at least two (2) uninterrupted working weeks of leave. Have you experienced disapproval from your employer for taking extended leave?

Annual leave is a common source of dispute among employers, HR, and employees. These conflicts are evident in the numerous cases filed in the Employment and Labor Relations Court.

Article 41 (1) of the Constitution of Kenya, our supreme law, states that every person has the right to fair labor practices. This is crucial as employers typically have greater bargaining power than employees. Employees must have the ability to take time off from their work duties to rest. The European Court of Justice (ECJ) in ANGED v. FASGA and Others (C-78/11) emphasized that the purpose of paid annual leave is to allow workers to rest and enjoy a period of relaxation and leisure.

The Employment Act, Section 28 (1) (a), states that an employee is entitled, after every twelve consecutive months of service, to at least twenty-one (21) working days of leave with full pay. This provision closely mirrors Section 20 (2) of South Africa’s Basic Conditions of Employment Act (BCEA), which mandates a minimum of 21 consecutive days of annual leave with full remuneration for each leave cycle.

Kenyan Employment and Labor Relations Court judgments on annual leave issues are relatively sparse, often focusing more on calculating contested awards than interpreting Section 28 of the Employment Act.

Regarding forfeiture, the law clearly states that any statutory leave not taken within 18 months (not 6) will be forfeited. Non-statutory leave terms are regulated by agreements between the parties.

Employers must ensure their employment policies comply with the Employment Act.

For assistance with Employment Law, policy formulation, or related matters, please contact us at info@wka.co.ke.

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Salient Features of the Amendments to the Employment (Amendment) Act 2022

Salient Features of the Amendments to the Employment (Amendment) Act 2022

The Employment (Amendment) Act 2022 was signed into law on April 4, 2022, by His Excellency the President of Kenya. These changes took effect on April 22, 2022.

Key Amendments:

  1. Ease of Application Process:
    • Employers no longer require job applicants to produce clearance and compliance certificates, such as certificates of good conduct, EACC clearance, and HELB clearance, at the initial point of a job application.
    • This amendment aims to alleviate the financial burden on job applicants, particularly young, destitute youth, who previously had to spend around KES 6,000 to acquire these certificates.
  2. Free Clearance and Compliance Certificates:
    • The fees for applying for clearance and compliance certificates have been eliminated. It is now free to apply for these certificates from relevant institutions like HELB.
  3. Public Service Applicants:
    • Applicants for public service positions are still required to submit clearance and compliance certificates.
  4. Post-Offer Requirements:
    • Successful job applicants who receive a letter of offer must still submit the required clearance and compliance certificates.
    • Employers have the right to withdraw letters of offer if the prospective employees do not submit the requested clearance and compliance certificates.

Recommendations for Employers:

  • Employers should review and update their Human Procedures and Policies Manual and Employment Contracts to align with these changes and ensure compliance with the law.

Please note that the contents of this newsletter are intended to provide a general guide to the subject matter. It should not be relied upon without legal advice. For further information or assistance on compliance or any other legal issues, please contact us at info@wka.co.ke.

Visit us at:
WKA Kenya
Nairobi Hub: Parklands, Valley View Business Park, 6th Floor, City Park Drive, Off Limuru Road
Website: wakilihub.co.ke/