WHAT EMPLOYERS NEED TO KNOW DURING THE COVID-19 PANDEMIC
Published On 12th May 2020
The employers in collaboration with their employees are expected to:-
Employers must abide by Statutory provisions and the conditions of employment in any employment contract or Collective Bargaining Agreement (if any).
i) Sick leave
ii) Annual leave / forced leave
The Employment Act, 2007 does not foresee a situation where an employee is forced to take leave, like in a situation of the Covid-19 pandemic.
Depending on the employer’s policies and employment contracts, it may be possible to require employees to take annual leave at a specific time:-
iii) Unpaid leave / furlough
It is paramount for the employer to have consultations with the employee and with approval effect any alterations to the employment terms.
Negotiations between the employer and employee can be structured in several ways:-
In so far as may be reasonably practicable, employers may set up alternative arrangements, to allow employees to continue working outside of the workplace such as working from home or shift work systems.
Such arrangement should be undertaken in consultation with the employees.
Most contracts of employment provide for a specific place of work.
The current Covid-19 scenario does not prevent an employer reducing staff through the process of redundancy.
What is "Redundancy"
Defined under the Employment Act, 2007:- loss of employment by involuntary means through no fault of an employee.
The general principal on “redundancy” is that the position of employment is no longer sustainable or available. In declaring a position “redundant”, the employer must comply with the Statutory provisions.
The fundamental part of “redundancy” is ensuring transparency throughout the process particularly, the selection criteria used, where several employees occupying similar positions are intended to be declared redundant.
For those employees who are members of Trade Unions, there may be additional requirements.
The Employment Act provides for specific requirements when implementing "Redundancy".
What is "Force Majeure"
“Force majeure” is recognised by Kenyan law under the Law of Contract Act which adopts the position of the common law of England relating to Contracts as modified by the doctrines of equity.
A "force majeure" clause regulates the consequences of supervening events beyond the parties’ (or one party’s) control of the obligations in a contract. Not all contracts will provide for the specific words “force majeure;” but may instead, have provisions that operate in a similar manner, terms such as “events beyond the reasonable control of a party” or “Acts of God,”
If a contract includes a force majeure clause, then the precise language of the clause has to be considered. Whether the contract’s force majeure clause applies to issues caused by the COVID-19 pandemic, will be determined by the exact language in the contract.
“Force majeure” cannot be implied.
Force majeure clauses are rarely used in employment contracts.
The remedies available to a party to the contract would depend on the specific remedies provided in the contract.
What is Frustration?
"Frustration" is a common law doctrine which recognises that an event may occur through no fault of either party which makes it impossible to perform or radically changes the nature of any obligations under a contract.
A relationship between an employer and employee is a contractual relationship.
Frustration does not merely suspend performance, it discharges a contract. Accordingly, all current and prospective rights and obligations are cancelled.
What is a Frustrating Event?
Whether or not a particular contract has been frustrated is dependent on the wording of the provisions.
The threshold for establishing the occurrence of such an event (such as the COVID-19 pandemic) is onerous as a business would need to prove that:
The Frustrating Event Cannot Be Foreseeable
If the event in question was foreseen by the parties or addressed in the contract in the form of a force majeure clause then parties will be deprived of relying on this doctrine. Accordingly, the time of entry into the contract may be significant depending on the level of knowledge regarding the impact of COVID-19 at the relevant point in time.
Increased Difficulty or Inconvenience is Not Sufficient
The mere fact that an event has rendered performance more difficult or inconvenient will not constitute a "frustrating event". Consequently, in circumstances where a business experiences delays or increased costs as a result of travel restrictions or other measures arising from COVID-19, it could be difficult to rely on frustration as although performance may be substantially more difficult it is unlikely to be impossible in many cases.
Frustration of the Employment Contract
This may occur when an unexpected event prevents one or both parties from meeting the basic requirements of the employment contract. The parties would then be relieved from any obligation to provide notice or compensation for the end of employment.
However, frustration is difficult to prove. In the case of employee incapacity, where the employment contract does not involve a specific task, but instead envisages a long-term relationship, it will be more difficult to establish that the contract has been frustrated by a temporary incapacity.
Mere hardship or inconvenience to one of the parties is not sufficient to deem the contract as frustrated, nor is it sufficient show that performance of the employment contract is more onerous or unreasonably harsh. When claiming frustration, the employer bears the responsibility of demonstrating that the event is of such magnitude that it has made it impossible for its employees to continue performing their duties under the employment contract.
Before considering any actions, legal advice must be sought as there are a number of factors that have to be considered before ensuing steps are taken.
Should you have any queries or need any clarifications with respect to employment matters, please do not hesitate to contact Vikram C Kanji or Ruby Njenga at A B Patel & Patel Advocates, Mombasa.
The contents of this publication are for reference purposes only. They do not constitute legal advice and should not be relied upon. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.