New Labour & Company Laws in Kenya 2021

The law does not exist in a vacuum; it exists solely to regulate human interaction within our societies. As society grows and populations diversify, the need to amend various laws arises to fit our changing needs. Our labour laws for instance are constantly being amended in order to reflect the demands of the current labour market and workforce. Amendments ensure the promotion and protection of both employers and employees’ rights. On 30th March 2021, President Uhuru Kenyatta signed into law the Employment (Amendment) Act, 2021. One of three Employment Amendment Bills introduced in 2019 and the only one currently passed into law. This Act was operationalised on 15th April 2021 following its gazettement through Kenya Gazette Supplement No. 53. In this article we’ll look at some of the newly enacted labour and company laws related to your Human Resources.

  1. THE PRE-ADOPTIVE LEAVE

Section 29A has been introduced to the Employment Act. This Section provides that in the event that a child is placed in the continuous care of a person who is an employee under the Employment Act, that employee is entitled to 1-month pre-adoptive leave with full pay.

Previously, qualification for the pre-adoptive leave was based on sex and marital status. In addition, the leave period was 3 months for married female employees and two weeks for married male employees. With the new amendment, both male and female employees are entitled to 1-month pre-adoptive leave regardless of one’s marital status.

In order to apply for this leave, an employee is required to notify their employer in writing, their intention to place a child in their custody at least 14 days before the placement of the child. This notice to the employer must be accompanied by the relevant documents including a custody agreement and an existing certificate from a registered adoption society.

An employee who takes pre-adoptive leave has a right to return to the job they held prior to the leave. This amendment is a progressive move in Kenya’s employment laws with respect to adoption.

  1. HYBRID & VIRUTAL MEETINGS

Due to the COVID-19 pandemic, the Business Amendment Act now enables both private and public companies to hold virtual and hybrid meetings where their previous articles did not allow them to do so.

  1. NSSF, NHIF & NITA PAYMENTS

The National Hospital Insurance Fund (NHIF), the National Social Security Fund (NSSF) as well as the National Industrial Training Act have all been amended under the Amendment Act. The amendment harmonised the due date for the respective payroll deductions. Both the NHIF and NSSF deductions will now be due on the ninth day of every month while the Industrial Training contributions will be due on the ninth day of the month following the end of the financial year. The NSSF Act also now provides that in the event where a contribution has not been paid on or before the ninth day of the month, a five percent (5%) penalty of the respective contribution shall apply.

These amendments aim at increasing employer compliance with respect to payroll deductions.

https://www.lexgroupafrica.com/index.php/notices-publications/161-new-changes-to-the-kenyan-business-laws-here-s-what-you-need-to-know

EMPLOYEE RELATIONS

Employee relations is the process of managing the relationship between employees and the organisation as well as the relationship among employees. in order for employees to be productive and perform at their best, the need to have a safe and conducive environment. A key aspect of this conducive work environment is the relationship the employees have with each other. When employees have a good working relationship, they are more productive as this promotes communication, collaboration and cooperation among them. In today’s article we’ll look at why employee relations are important in the workplace.

  • HAPPY EMPLOYEES MAKE A HAPPY ORGANISATION

The happier your employees are, the more productive they will be. It has been proven that the most successful companies know how to manage their employee relationships in order to maximise on their satisfaction and ensure employee retention. When employees are happy in their workplace, they work harder to ensure the company as a whole succeeds. There are a number of ways an organisation can ensure that their employees are happy. Employers can show their appreciation work well done and rewording exceptional performance. The company can also organise team building trips to build and improve the relationships among employees.

  • DISCOURAGE CONFLICT

In most cases, conflict is something we all try to avoid especially so in the workplace. It is important to note however that sometimes disagreements may arise due to the presence of diverse individual opinions and work strategies. Sometimes, this conflict may be productive as it may lead to new ideas effective problem solving skills and also provides an opportunity to explore and expand their creativity. Employees who relate well with each other are able to explore their opposing ideas in a civil manner which in turn fosters innovation.

  • EMPLOYEE EMPOWERMENT

The positive relations among employees provides a great social circle and also opens up avenues for the company’s success. When employees are able to openly connect with each other and network, they are able to grow separately from the company and this may then provide them with the tools they need to venture into new individual projects. When employees know that they can count on the support of their colleagues, they are more likely to work towards the success of the company because it ensures that everyone will succeed. companies can also empower their employees by allowing them to take part in certain decisions that affect them and providing learning opportunities that will enable them to achieve their career goals.

  • REDUCES THE WORKLOAD

Research has shown that one of the leading causes of burnout is work overload and many employees experience this at least once over the course of their careers. A company with positive employee relations is able to identify the top performers and split different workloads among them. When everyone is on the same page, and working together to achieve a common goal, tasks become manageable and less daunting.

  • REDUCED EMPLOYEE TURNOVER

Employee turnover refers to the gradual loss of talented employees in a company. High employee turnover rates can negatively impact an organisation as it puts a strain on the company’s resources and remaining employees as the increased workload fall on them. When employees feel valued, they will utilise their skills to ensure the success of the company. a company with good employee relations will have attractive benefits and wages that encourage employees to stay on. Employees who are satisfied with their work environment are less likely to quit.

https://www.managementstudyguide.com/importance-of-employee-relations.htm
https://www.linkedin.com/pulse/why-employee-relations-important-organization-sampurna-majumder
IMPROVING YOUR EMPLOYER BRANDING

The term ‘employer brand’ refers to an organization’s reputation as an employer, how it presents itself to potential employees and employees as well. Employer brand differs from the general corporate brand reputation that is often targeted towards customers. Employer branding deals with the attraction, retention and engagement strategies that enhance a company’s appeal to employees. Simply put, employer brand management addresses the reality of the employment experience. This enables companies to find the best talent in order to achieve their goals and effectively engage these employees to maximise their retention. In this article we’ll look at some employer branding strategies that you can use to boost your company’s reputation.

  1. DEFINE COMPANY GOALS & OBJECTIVES

Organizational goals inform employees the direction in which the organisation is headed and how it will get there. Employees can then assess whether these goals align with their career development and if they would want to work for your company. Employees are more enthusiastic when they know exactly what is required of them and the rewards available for meeting and/ exceeding the company’s expectations. This also makes it easier for employees to contribute to company growth and for managers to do their jobs effectively in order to improve productivity. Objectives are also key in establishing standards of employee evaluation as they act as yard sticks to identify the success and failures of the organisation and its employees.

  1. HIGHLIGHT YOUR EVP

Whether you’re hiring one employee or 100, you have to be able to answer the question, “why should I work for you?” An Employee Value Proposition (EVP) is essentially the “why” around your organisation. It is what attracts and attracts your top talent and what you as an organisation promise to your employees. Your EVP outlines how your company sets itself apart from competitors. Many top ranking companies take time to come up with the best EVPs because this is the foundation of a company’s employer branding and attracts the best talent.

  1. BUILD YOUR MARKETING GAME

Jeff Bezos, founder and executive manager of Amazon once said that “A brand for a company is like a reputation for a person.” And this sentiment is entirely true because a business is only as good as its reputation. It is therefore important to get the word out about your company as this helps to build and maintain your company’s reputation. Marketing will provide insight about your company that will attract potential employees. Invest in a good marketing team that will enable you to reach your target audience and inform potential employees on the benefits of working for your company.

  1. DEVELOP A RECRUITMENT PLAN

Your employees can either make or break your company and this is why it is important to hire the best. Knowing your company needs, will enable you to conduct proper interviews and find the right people for the job. Begin by defining the role these employees will play in your company and what your expectations are as well as the ideal person for this role. A good recruitment plan will result in a successful hiring process.

  1. WORK ON YOUR EMPLOYEE RETENTION

Companies that are known for having high employee retention often attract the best talent. Having a high retention rate means that a company is able to keep its employees long-term. This results in less time and resources spent on recruiting and training new employees. Employees that have had a long working relationship with their company are more loyal and committed. Retaining valuable employees is important because vital company knowledge that would otherwise be lost to competitors is maintained. Find ways to keep valuable employees happy through company rewards and benefits and recognition and appreciation for work well done.

https://builtin.com/employer-branding/employer-branding-strategy

https://blog.smarp.com/employer-branding-9-steps-to-build-successful-strategy

https://beamery.com/resources/blogs/employer-branding-definition-process-strategy-and-resources

Diversity in the workplace
DIVERSITY IN THE WORKPLACE

Diversity in the workplace is all about creating a workplace environment that is inclusive of everyone’s individual differences in order to enable them to achieve their greatest potential. Studies have shown that businesses with more diverse workplaces are known to perform better both culturally and financially. A diverse workplace provides employees with various learning opportunities as they interact with each other. In addition, having a diverse workplace fosters a positive working environment for your employees where they can grow as individuals. In this article we’ll look at some of the benefits of having a diverse workplace.

BROADEN YOUR TALENT POOL

When your business is diverse, you have vast talent resources at your disposal. This is because your employees will have a multitude of skills and experiences from their various backgrounds. This will in turn enable them to collaborate and learn from each other making earning your organisation a team of well-rounded employees.

PROMOTE INNOVATION

Diverse teams become are better prepared for decision-making and accomplishing the task at hand. A sense of complacency and sameness in thinking is more likely in homogeneous teams than in diverse teams. Differences among team members force each person to anticipate that there will be alternative and unexpected viewpoints to consider and evaluate. Reaching consensus takes effort. People will work harder to communicate their own thinking, and as a result broaden their own views to consider unexpected perspectives of others. This takes more work and preparation, but it’s more significantly valuable for businesses. s

GROW YOUR BUSINESS

In most cases, businesses with a diverse employee workforce are known to also have an equally diverse customer base. This is primarily due to the fact that customers are attracted to business that demonstrate solutions for their needs. Ergo, by understanding the diverse needs of their customer base, these businesses are able to flourish. Diverse employees can also help grow your business by synthesising communication specific to their various socio-economic groups.

IMPROVE YOUR BUSINESS REPUTATION

A business is only as good as its reputation. A diverse workforce enables your employees to form positive and meaningful relationships. These positive relationships turn into positive stories that will be shared and spread which then propagates a positive relationship for your business. In addition, potential employees and customers are drawn to employers and businesses that are accepting and tolerant of individuals from different backgrounds.

EMPOWERS MARGINALISED WORKERS

In many instances, members of the workforce have found themselves marginalised and experienced some form of discrimination due to racism, ageism, ableism, sexism and sexual orientation. This discrimination, and its various combinations is both unethical and illegal [in most territories]. Having a diverse workforce allows people in these diverse marginalised groups to showcase their talents and support themselves financially in order to improve their standard of living while still earning their organisations a profit.

ENCOURAGE POSITIVE CONFLICT.

When a group of people are around each other for extended periods of time, conflicts will inevitably occur. The workplace is no different. However, employees who work in a diverse environment are able to acknowledge others’ differences and can find similarities, among them that will enable them to quickly move past the disputes and get back to work.

ENRICHES COMPANY CULTURE

A diverse workplace is generally happier and more productive. This is because it is open to people of all backgrounds, ages, cultures etc. which serves to ensure that everyone id represented and each voice is heard. A diverse workplace fosters a more accepting and adaptable company culture as people are more tolerant towards each other. This in turn creates high performing teams.

https://www.forbes.com/sites/forbesinsights/2020/01/15/diversity-confirmed-to-boost-innovation-and-financial-results/?sh=2d0039bc4a6a

3 changes to company law in kenya
3 MUST KNOW CHANGES TO COMPANY LAW IN KENYA

Like most institutions in this country and the world over, there are laws set up by the government to ensure legality as well as the promotion and protection of individuals rights in these institutions. These laws also serve to ensure the efficient functioning of these institutions. There are various laws that govern how business is conducted in this country as well as how companies are to conduct their dealings. In this article we’ll look at some of the new laws and amendments to these laws.

  1. BUSINESS REGISTRATION SERVICE ACT

The Business Registration Service Act of 2015 establishes the Business Registration Service as the body in charge of administering laws relating to the incorporation, registration, operation and management of companies, partnerships and firms.

This Act will be responsible for matters relating to business registration. This body will also take over the existing company law functions of the State Law office. The Business Registration Service Act, 2015 will become operational on a date to be set by the Cabinet Secretary by notice in the Kenya Gazette. 

  1. COMPANIES ACT

The Companies Act of 2015 is one of the laws intended to streamline the manner in which business is conducted in Kenya. The intention behind this is that the new provisions will be more flexible, in line with modern business practices and will in turn lead to growth and innovation in various commercial transactions in Kenya. Among the many significant changes, the Act now has provisions that allow companies to have a single shareholder as well as provisions that require a company to have at least one natural director except for in cases where the company’s sole director is a corporation.  

Previously, financial assistance was prohibited except in a limited number of cases. This is no longer the case as companies are now able to buy back their own shares in order to create treasury shares which may then be re-issued. 

  1. INSOLVENCY ACT

To begin with, insolvency occurs when a company is unable to pay its debts. The Insolvency Act of 2015 contains laws relating to matters of insolvency for both individuals and companies which were previously contained in the Bankruptcy Act. The Insolvency Act provides debtors with an alternative to bankruptcy. It creates the legal framework that enables companies to be put into administration which is an alternative to liquidation under the supervision of an insolvency lawyer.

In Kenya, our laws are constantly changing and various amendments are done to ensure that the laws serve the Kenyan people accordingly. It is important to keep up-to-date with these changes.

 Kindly visit http://kenyalaw.org/kl/ to find out more about our laws.

ADVICE FOR SMALL BUSINESSES
ADVICE FOR SMALL BUSINESS OWNERS

Entrepreneurship comes with a host of challenges. Rewarding challenges, but difficult challenges nonetheless. This is especially true if you’re venturing into an unfamiliar industry or designing the next generation of products. For new entrepreneurs there’s little to no training and sometimes no mentors to guide and support you through the process. This is why it’s so important to gather as much information before you start your new business venture. Here’s what you need to do:

  1. GATHER YOUR TOOLS

The journey of a thousand miles begins with a step; make sure you’re wearing the right shoes. Before starting your business. You should gather as much information about the industry you plan on delving into. How are the thriving businesses structured? How big is the market and who should you target first? What marketing techniques work for the industry?

Speak to other business owners and find out how they operate and what success have they’ve had. Look for the potential and predicted shifts the sector is facing and how your business could respond.

Before you even begin hiring employees, you need to do the job you need them for. This means you’ll be familiar with role and its requirements and can therefore properly recruit for it.  Preserve your cash flow by avoiding unnecessary spending like unqualified employees.

  1. SET SPECIFIC AND REALISTIC GOALs

When starting a business, it is absolutely important that you set specific goals. Goals help you stay on track with your vision and inform all the decisions you make. Setting specific goals enables you to prioritise actions instead of taking random shots in the dark. While it is essential to set goals, it is also vital that you remain realistic about them as well.

In the initial stages of your business, you should set short term goals that are easy to achieve. For instance, having a five-year growth plan that is both specific and realistic will guide your efforts and ensure your actions are focused. Realistic goals are important because they are achievable. Setting unrealistic goals will only serve to demotivate you in the event you don’t achieve them.

  1. BE PATIENT

Rome was not built in a day. When you start your business, you may focus on growth and expansion. This is completely reasonable because this is the point of starting a business in the first place. However, don’t rush yourself remember that any progress, no matter how small is still progress.

In its initial stages, progress may be slow. In the pursuit of growth, you may neglect your focus on improvement. Check your systems and processes, is your business a well-oiled machine? In order for your business to achieve the success you’re working for, all the elements that make it up must be properly maintained. Be patient and persistent and you will begin to see results.

  1. GET THE WORD OUT

Marketing plays a huge role in the success of your business. Now is the time to invest in a content marketing strategy. This will get the word out on your business and draw customers in. Take advantage of social media which has grown to be one of the most powerful marketing tools available. There are many benefits to this marketing strategy such as free traffic and continuous growth as people engage with your content. Keep an eye out for all the new apps and websites that are coming up and use them to your advantage. Your business is only as big as the people who know about it.

  1. KNOW THE LAW

As tedious as it may seem, it is absolutely important that you know the law when starting a business. It is important to know the laws surrounding your industry in order to avoid penalties and legal hurdles. It is also important to ensure that you are in compliance with the legal requirements of running a small business. These include financial regulations, tax obligations and employment laws. Ensure that your new company complies with all its legal responsibilities so you can get back to focusing on growing your business.

“Success is not final; failure is not fatal: it is the courage to continue that counts.”

Winston Churchill

https://www.success.com/11-game-changing-tips-for-small-business-owners/

https://www.forbes.com/sites/mikekappel/2017/07/12/10-tips-for-starting-a-small-business-that-you-havent-heard-a-thousand-times-already/?sh=7a360d416e19

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