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Introduction

This article deals with many issues involving COVID-19; from OSHA to unpaid leave, salary reductions, frustration of employment contracts, force majeure and the whole shebang!

You can straight away skip to the end where I have given a summary but I encourage you to read through for a clear understanding.

Working from home – obligations under the Occupational Safety & Health Act, 2007 (OSHA)

Most of us are now working from home, what does this mean in terms of OSHA?

Our homes right now are “workplaces”. According to Section 2 of OSHA, a “workplace” includes, any land, premises, location, vessel or thing, at, in, upon, or near which, a worker is, in the course of employment.

What this means is that an employer should be concerned about that workplace.

Duties of the employer under the OSHA

According to Section 6, the Employer should, among other things,

  1. Ensure the safety, health and welfare at work of all persons working in his workplace;
  2. Provide such information, instruction, training and supervision as is necessary to ensure the safety and health at work of every person employed;
  3. Maintain the workplace in a condition that is safe and without risks to health.

What I would advise employers to do, in the current circumstances, is:-

  1. Confirm from your insurer that they will cover injuries that take place while staff are working from home;
  2. Ensure staff who are working from home have a proper workspace – desk and chair (preferably ergonomic);
  3. Provide information on safety and health while working from home – take breaks, be careful of hazards such as exposed cables etc.;
  4. Require staff to take reasonable measures to ensure that documents are protected from fire or theft and that other members of their households are prevented from accessing or using office equipment.

There has been litigation on accidents and injuries incurred while working from home in the US (since working from home is quite common there) and their courts have placed an obligation on employers. I don’t see why the situation would be different in Kenya especially considering the provisions of the OSHA.  

Annual leave

Though annual leave is supposed to be taken at such times as an employee may wish, subject to the employer’s convenience, in the present circumstances, it is, in my view, ok for an employer to request staff with accrued leave and who are not working from home, to take leave.

Leave to care for sick relatives

Sick leave, under the Employment Act, only caters for sickness by the employee. There is no provision in the labour laws for leave on account of a sick relative. It is therefore for the employer to adopt a suitable policy, for example, allow this to be taken as compassionate leave, if not, the employee may either take unpaid leave or their annual leave. Some organizations give a special type of leave for absence on account of a sick relative called “family medical leave” or “parental leave” or “dependant leave”.

Unpaid leave

Generally, unpaid leave is considered lawful only where it is requested by an employee and accepted by an employer, not where it is imposed by an employer.

Requiring staff to go on unpaid leave amounts to an amendment of the terms of the employment contract (i.e. the obligation to pay staff while on leave). Section 10(5) of the Employment Act, 2007 requires consultation prior to amendments of the terms of employment. Where the proposed change is to the detriment of staff, not only is consultation required but consent as well.

Therefore, any decision to enforce unpaid leave should be done in consultation with staff and their consent obtained.

What does the Court of Appeal have to say?

If the parties consult and consensually agree to salary cuts and/or unpaid leave, according to the Court of Appeal, the staff will not be able to recover such underpaid or unpaid salaries when normal business operations resume. This was the holding of the Court of Appeal in the case of 748 Air Services Limited vs Theuri Munyi [2017] eKLR

Therefore, if you wish to implement unpaid leave, talk with the staff and explain the situation and get their consent to the unpaid leave.

Salary reduction

As it amounts to a fundamental change in the terms and conditions of employment, the consent of staff is mandatory. A unilateral variation is unlawful.

Redundancy, Frustration & Force Majeure

These are the most drastic scenarios.

In the case of ANN vs Mediamax Network Limited [2020] eKLR, the ELRC held that where there are genuine and valid redundancy reasons, discussions with the staff should include possibilities of pay cuts and other roles before the ultimate decision to dismiss is taken.

What is force majeure?

Also known as an “Act of God”, force majeure events are events beyond the control of the parties such as pandemics, earthquakes, floods, government proclamations, war etc. which have the effect of preventing a party from performing its obligations under a contract.

When an event of force majeure occurs, depending on the terms of the force majeure clause, a party’s obligations may be suspended for a defined period or a party may be able to terminate the contract if the event persists beyond a defined period.

Force majeure clauses are frequently found in commercial contracts but seldom, if ever, in employment contracts. For a person to rely on force majeure, there should be a force majeure clause in the contract.

What is frustration of contract?

A contract is frustrated when “…without the default of either party, a contractual obligation has become incapable of being performed …”

A frustrated contract ends automatically and immediately on the occurrence of the event because the event renders it physically or commercially impossible to fulfil the contract. A good example is where a person is denied a work permit. Government directives can also frustrate contracts. Needless to say, pandemics can also frustrate contracts.

Frustration applies in employment contracts in the same way that it applies in commercial contracts. Where, for example, there is an outbreak of war, the employment contract immediately comes to an end and there is no question of declaring redundancies. The contracts automatically and immediately end because of the war.

In the case of MSN vs Kisii University [2019] eKLR the ELRC accepted that frustration applies to all contracts including employment contracts and that its effect is to kill the contract and discharge the parties from further liability under it.

Many organizations are monitoring the situation and therefore starting with options such as taking accrued leave, then unpaid leave, then salary cuts, but if the situation persists, there may be valid grounds for arguing that the employment contracts have been frustrated.

In the case of JNO & 4 others vs Relief & Missions Logistics Ltd [2017] eKLR, the Claimants were employed to drive buses at JKIA. The President of Kenya queried the decision to have the buses at the airport and ordered the business to stop. After attempting to resolve the situation in vain, the Respondent terminated the Claimants citing redundancy and frustration. The ELRC accepted that the employment contracts had been frustrated and declined the prayer for damages for unfair redundancy.

Even though the employer, in that case, opted to declare the drivers redundant, they could very well have opted solely to go with the argument that the employment contracts were frustrated.

Redundancy vs Frustration

According to Section 2 of the Act, “redundancy” means the loss of employment…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 and the practices commonly known as abolition of office, job or occupation and loss of employment.

Based on this definition, a redundancy is carried out “at the initiative of the employer”. Can we say that a force majeure event or a frustrating event is “at the initiative of God”? If so, then redundancy does not apply.

In the case of Kenya Airways Limited vs Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR, Maraga JA (as he then was) defined redundancy as,

“…I understand this to refer to a situation, in most cases an economic downturn, brought about by factors beyond the control of the employer, which leaves the employer with no option but to take an initiative the consequence of which will be inevitable loss of employment…”

Kenya Airways Limited vs Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR

Going by Justice Maraga’s definition, there may be lots of arguments regarding redundancy vs frustration/force majeure, making it safer to go with redundancy.

However, in the case of DKR vs Summit Cove Lines Company Limited & another [2019] eKLR, the ELRC found that it was impracticable to have expected an employer to go about invoking redundancy law under Section 40 of the Employment Act, issue redundancy notices and pay redundancy benefits to the Claimant, while the public-private partnership was frustrated by the Judgment of the Court.

Protective measures

Employers should consider the following:-

  1. Avoid as much as possible making detrimental unilateral decisions (unpaid leave, salary reductions, redundancy…). Engage staff and engage all recognized trade unions;
  2. Maintain open and clear communication channels with staff and trade unions;
  3. Maintain a paper trail of communication with staff and trade unions;
  4. Provide a channel for handling grievance/appeals.

Summary

  1. When staff work from home, the home is a workplace under the OSHA and therefore due consideration and regard should be had to the employer’s obligations;
  2. Annual leave – staff may be requested to take accrued annual leave;
  3. Sick leave to cater for a sick relative – employers may consider extending compassionate leave for this or establishing a special leave for this – family medical leave or dependant leave. Otherwise, annual leave applies since it is not provided for in the labour laws;
  4. Unpaid leave – only with the consent of staff;
  5. Salary reductions – only with the consent of staff;
  6. Force majeure – only applies if provided in the employment contract and if pandemics are specifically mentioned;
  7. Frustration – application is plausible but must be looked at on a case by case basis;
  8. Redundancy – employer’s safest bet after exploring the less harsher options.

***THE END***

About Anne Babu

Anne is an Advocate of the High Court of Kenya and the Founding Partner of Anne Babu & Co. She has practised employment law for over 12 years and her employment law practice has been recognized by the prestigious Chambers & Partners. Anne cares about employers and their labour issues.


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