Questions & Answers
Hiring Workers in East Africa
May 17, 2011
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Q: I think in Kenya maternity leave allowed to women is 3 months. That is what I have been advised by my HR manager. Please confirm.
Sonal Sejpal
A: As per Kenyan Employment Act 2007, maternity leave is specified to be at least 90 calendar days + annual leave entitlement for the year.
Eve Hawa Sinare
A: in Tanzania maternity leave is 3 months and paternity leave is 3 days
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Q: What is the legal compliance for expatriates working in East Africa (i.e., an Indian or US person working for a US company in Uganda)?
-Sonal Sejpal
A: In order to be employed in Kenya, a foreign national would need to obtain a work permit from the Immigration Department under the Immigration Act (Cap 172).
The foreign national’s employment would be governed by Kenyan Law and the employee would need to be registered under various laws as follows:
a)income tax registration under the Income Tax Act (Cap 470);
b)NSSF registration as a contributor under the National Social Security Fund Act (Cap 258); and
c)NHIF registration as a contributor under the National Hospital Insurance Fund Act, 1998.
Further, the Employment Act requires an employee’s salary to be paid in the currency of Kenya (Kenya Shillings).
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Q: How do you compute a daily salary rate from a monthly salary since employers use different formulas?
Eve Hawa Sinare
A: In Tanzania, the daily rate is calculated from the basic salary of the employee divided by the number of days in the month usually 30 days.
Sonal Sejpal
A: In Kenya, wages are computed based on working days. You should divide the monthly salary by the working days.
-Moses Adriko
A: In Uganda, most employers do not provide for a daily rate except if the work is manual and if so the daily rate would not be based on 30-day wages rate
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Q: Please comment on the issue of statutory overtime pay in Kenya. The Employment Act 2007 seems silent on this.
Sonal Sejpal
A: Overtime entitlement is provided for in the wages orders under the Labour Institutions Act. Under the General Wages Order, overtime above normal hours is must be paid at 1.5 times the normal hourly rate. Overtime for rest days and public holidays is 2 times.
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Q: Kindly talk about defined contributions being introduced in Kenya beginning 1st July.
Sonal Sejpal
A: the Public Service Ministry had early this year announced a scheme planned to roll out on 1st July, 2011 in which civil servants would benefit from a medical cover that would run parallel to the NHIF. There have been concerns raised by various stakeholders. Consultations are still ongoing mainly on who will run the scheme and if this will duplicate services offered by NHIF
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Q: What is legality of having a specific period employment contract -- say one year? Is there any term specified in law after which an employer is bound to take an employee on a permanent basis, rather than keeping for specific period?
Sonal Sejpal
A: There is no period after which an employer is obligated to retain an employee permanently. However, in the case of redundancy, or unfair termination, where there is no break in employment, the continuous period running between one fixed term contract and another fixed term contract may be considered by the court.
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Q: "Managers are not entitled to overtime pay."What is your view on this?
Sonal Sejpal
A: In Kenya, there are no definite provisions on this issue. This is respected, in our experience, by custom. We are not aware of any challenges by managers.When we draft management level contracts, we make no reference to overtime.
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Q: In Kenya, are we required to pay for the off day?
Sonal Sejpal
A: An employee is entitled to at least one rest day.Where an employee works on the rest day, he or she would be entitled to overtime.
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Q: What happens in situations where the sick leave days provided in cap 299 is not consistent with the employment act?
Sonal Sejpal
A: In Kenya, under the Employment Act, the MINIMUM sick leave is 7 days with full pay and 7 days with half pay subject to a medical certificate.The General Wages Order provides for MAXIMUM sick leave of 30 days with full pay and 15 days with half pay.
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Q: in Kenya, which law should we follow for sick leave?
-Sonal Sejpal
A: provisions relating to sick leave as well as other conditions of employment are provided for both in the Employment Act, 2007 and in the General Wages Order promulgated under the Labour Institutions Act, 2007. With regard to sick leave, there is no overlap between the provisions of the Employment Act and the General Wages Order. The Employment Act provides for the minimum sick leave applicable and the General Wages Order provides for the maximum sick leave applicable.
Section 30 of the Employment Act provides that after two (2) consecutive months of service with his employer, an employee shall be entitled to sick leave of not less than seven (7) days with full pay and thereafter of seven (7) days with half pay, in each period of twelve (12) 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.
Regulation 12 of the General Wages Order provides that after two (2) continuous month’s service with an employer, an employee shall be entitled to a maximum of thirty (30) days’ sick leave with full pay and thereafter a maximum of fifteen (15) days’ sick leave with half pay in each period of twelve (12) consecutive months’ service provides that an employee shall not be entitled to such payment unless he produces to the employer a certificate of incapacity covering the period of the sick leave claimed signed by a medical practitioner in charge of a dispensary or medical aid centre, or by a person authorized by him in writing and acting on his behalf. An employee shall not be eligible for sick leave in respect of any incapacity due to gross neglect on his part.
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Q: Is compassionate leave an entitlement in Kenya by common practice? Should a contract include the travel allowance and if so how do you state it?
Sonal Sejpal
A: The General Wages Order makes provision for compassionate leave but this is deductible from the annual leave entitlement. Many employers give compassionate leave as a matter of practice.
Eve Hawa Sinare
A: In Tanzania compassionate leave is for 4 days within a leave cycle of 12 months. Any additional compassionate leave will be deductable from annual leave
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Q: What about the construction wages order?
-Sonal Sejpal
A: There are two orders which may be relevant: The Regulation of Wages (Electrical Construction Industry) Order and the Regulation of Wages (Building and Construction Industry) Order, 1998. The former Order applies to all persons (other than managers) employed in an undertaking or part of an undertaking which consists in the carrying on of work in the electrical construction order. The latter Order relates to works carrying on work in the construction of buildings and construction of railway lines or any lattice work structure.
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Q: Are written agreements needed in Kenya, Tanzania, Rwanda?
Eve Hawa Sinare
A: It is not mandatory to have a written contract but written particulars must be given to an employee if the contract is oral. In practice employers are advised to have written contracts.
Sonal Sejpal
A: In Kenya, it is mandatory to provide a written contract if the employment is for a period of three (3) or more months.
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Q: Is there an at-will concept in these jurisdictions or must all terminations be for good reason and subject to challenge?
Eve Hawa Sinare
A: In Tanzania, we have no at will concept under the new law. A reason has to be given and the reason has to be fair and the process of termination has to be fair as well.
Sonal Sejpal
A: In Kenya, we do not have an "at will" concept. Under the Employment Act, an employee has a right to claim unfair termination if employed for 13 months or more. In this case, the employer should have fair reasons for termination.
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Q: Did you say probation in Tanzania is a maximum of 7 months?
-Eve Hawa Sinare
A: No, it is 6 months and may be extended to 12 months
-Sonal Sejpal:
A: Probationary contracts in Kenya should not be more than six (6) months but may be extended for a further period of six (6) months with the consent of the employee.
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Q: Is compassionate leave an entitlement in Kenya by common practice?
-Sonal Sejpal
A: Yes, the entitlement to compassionate leave in Kenya is a common practice. Under the Regulation of Wages (General) Order, compassionate leave would be offset from the employee’s annual leave. In addition, under the order, an employee may be granted up to 5 days compassionate leave without pay in any one year. However, this is not a legal obligation on the employer.
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Q: Can an employee who is serving their notice period be summarily dismissed?
-Sonal Sejpal
A: The Employment Act provides for the various ways in which a contract can be terminated including termination with notice or pay in lieu of notice and summary dismissal for gross misconduct. There are no provisions in law on whether an employee who is already serving a notice period can still be summarily dismissed and we have not come across any case law that addresses this question. On the face of it, it would appear prejudicial (depending on the circumstances) to the employee to subject them to two consecutive modes of termination and this may be a basis for an unfair termination claim by an employee especially where the subsequent summary termination leads to loss of salary or termination benefits. Having said that, I don’t see why an employee cannot be summarily dismissed in this situation if the facts relating to misconduct etc emerge after notice is given to him.
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Q: What is the legality of having a specific period employment contract -- say one year? Is there any term specified in law after which an employer is bound to take an employee on a permanent basis, rather than keeping the employee for specific period?
-Moses Adriko
A: In Uganda there is general freedom of contract and you can have a fixed term contract, which can include or exclude a probationary period. Generally an Employer can not include a probation period of longer than 6 MONTHS.
-Sonal Sejpal
A: The Employment Act recognizes both fixed term employment and permanent employment. An employer who has engaged an employee for a certain period would not be obligated to turn the fixed term employment into permanent employment. The only term after which an employer is bound to take an employee on a permanent basis relates to casual employees. Any casual employee that either works for a continuous period of more than one (1) month working days or performs work which cannot reasonably be expected to be completed within a period of three (3) months or more shall be deemed to be an employee entitled to a contract of service paid on a monthly basis.
Unlike the case in Kenya, some jurisdictions have provisions which obligate an employer to convert successive fixed term contracts to permanent employment contracts after a certain successive period of employment. In England, the Fixed Term (Prevention of Less Favourable Treatment) Employees Regulations (2002) contains a specific provision which provides for the recognition of among others, fixed term employee rights in redundancy cases and the conversion of fixed term employment to permanent employment where an employee serves on successive fixed term contracts for more than four (4) years.
We have not come across a Kenyan case that examines the principles of legitimate expectation and continuity of employment.
The question of continuity of employment would most likely arise in the calculation of termination payments such as redundancy pay and contractual gratuity. Under the Employment Act, 2007, in the event of a redundancy, an employee is entitled to a minimum severance pay of fifteen (15) days pay for every year worked. Automatic renewal of fixed term contracts would have implications on the employer as there is a likelihood of a court presuming that the employment was continuous even though it was under multiple contracts. Furthermore, where a fixed term contract expires and the employer continues to engage the employee, it may be imputed that the employer intended for the employment to continue on the same terms.
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Q: In Kenya, if you provide Social Security, is it obligatory to provide pension? If yes, how is the pension calculated?
-Sonal Sejpal
A: In Kenya, there is no statutory obligation to provide pension to your employees. There is a statutory obligation to ensure that your employee is registered for statutory social security (NSSF) and to remit contributions. If there is a pension scheme applicable, this should be stated in the contract.
-Désiré Kamanzi
A: In Rwanda, apart from the mandatory social security contributions, no other pension scheme would be mandatory... For the social security, both the employer and employee contribute (5 and 3% respectively of the net salary).
-Moses Adriko
A: In Uganda, there is no obligation to provide pension. However there is a mandatory Social Security Scheme to which an employer must contribute 10% of the employees’ wages and the employee would contribute 5% of his wages. The employer is entitled to receive a lump sum payment from the Social Security Fund on reaching the retirement age of 55
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Q: For single termination in Kenya, kindly repeat the treatment of severance pay. Is severance pay expected? If yes, how is it calculated? Thanks.
-Sonal Sejpal
A: The Employment Act only requires that severance pay is paid to an employee if the employee is declared redundant.
It is calculate at 15 days pay for each complete year worked.
The Employment Act does not contain provisions which differentiate between single employee redundancies and group redundancies.