Job losses, pay cuts and unpaid leave in Kenya as Coronavirus bites
The government estimates that as at the end of April, 133,657 people in Kenya’s formal sector had lost their jobs and another 350,000 sent on unpaid leave due to effects of the COVID-19 pandemic.
According to the Cabinet Secretary in the Ministry of Labour and Social Protection, Simon Chelugui, the redundancies, which represent 4.6 per cent of formal jobs in Kenya, resulted from reduced revenues, lost business, shortage of raw materials and restructuring due to tough economic times.
“Majority of the jobs are in the manufacturing sector especially in Economic Processing Zones where 500 workers are affected; and the security and protective sector where 300 workers are affected,” Mr Chelugui told the National Assembly’s Departmental Committee on Labour and Social Welfare, adding that the job losses could spike since some companies are yet to formally notify the ministry of redundancies as required by the law.
Whereas no statistics are available for effects of the pandemic on the informal sector, it is feared that it could be worse. Travel restrictions, closure of bars, restaurants, salons and barbershops have affected the informal sector that employs many Kenyans. This has been coupled by a slump in the retail sector, particularly for businesses that rely on Chinese imports and those affected by curfew and cessation of movement by government to contain Coronavirus
Besides job losses, some firms have had to send workers on paid and unpaid leave, with tourism and horticulture industries among the worst hit.
In the tourism industry, 300,000 workers have been sent on leave since April with more likely to follow if the situation persists. The tourism industry, a major employer, providing livelihoods directly and indirectly for 1.1 million workers in Kenya, has been severely affected by restriction of movement and closure of borders to contain the disease.
For the horticulture industry, which has been affected by reduced business due to travel restrictions to Europe and other key markets, 50,000 employees have been sent on unpaid leave. Another 900 people working in the industry are on their way to losing their jobs, after four flower firms issued redundancy notices.
Effects of the pandemic on the labour market have also hit Kenyan workers in the diaspora, a situation that has been worsened by travel restrictions and lockdown in some countries. According to the Labour Ministry, 247 distress cases have been reported, mainly from United Arab Emirates and Saudi Arabia, with complains of non-payment of salaries, poor health and restricted movement.
As companies in Kenya grapple with the labour headache, some have pledged that no member of staff will be negatively impacted by the pandemic. Philip Morris International has promised employment security, financial stability and special recognition to all staff, arguing that support to staff is an integral part of its efforts to address impact of the pandemic on communities. In an announcement, the firm indicated that no employment contract will be terminated during the crisis and any planned restructuring put on hold. Staff have also been assured of compensation during this period, irrespective of their ability to deliver on their duties. The firm’s Human Resources Director for Sub-Saharan African Region, Khady M.N.Sarr, said: “It is precisely in such difficult and unprecedented circumstances that as an employer we need to stick together with our employees. Whatever the impact the COVID 19 crisis will have on our business, we commit not to terminate any employment and to continue paying salaries whether or not our colleagues can fulfill their professional obligations. People are our greatest assets and here we are putting our money where our mouth is”.
With no end in sight for the COVID-19 pandemic, it is feared that the economy could shed more jobs and more workers sent on unpaid leave, among other measures that could hurt livelihoods.
The Labour Cabinet Secretary says that his ministry is establishing response mechanisms to protect jobs, enhance safety and health of workers and promote social dialogue during the period of the pandemic and beyond.
“Several meetings and deliberations have been held with stakeholders and appropriate interventions identified for implementation to minimize and avert job losses,” he stated in a briefing to the parliamentary committee. This includes: workers taking annual leave, leave with half-pay or unpaid leave in some instances, particularly for the hospitality, tourism, and horticulture industries. Mechanisms are also being forged to facilitate working from home in shifts and leveraging technology.
A Labour and Employment Response Team has been established to receive employment-related complaints and issues affecting work places. The Inter-Agency Technical Committee on the Labour sector’s response to COVID-19 pandemic has also been set up.
In order to understand the full impact of the pandemic, the Labour Ministry, in collaboration with the International Labour Organization and the International Organization for Migration is planning an impact assessment on labour, employment and labour migration. Consequence of measures implemented by the Government such as working from home, social distancing, ban on international travel and the night curfew on job security, productivity, labour relations and cost of doing business will also be investigated. From the study, the government intends to make skills development plans for the post-pandemic period, based on understanding of skills demand across key sectors of the economy.