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Economy

Firms declare 14,400 jobs redundant since March

Some 14,401 jobs in the formal sector have been declared redundant since March
Some 14,401 jobs in the formal sector have been declared redundant since March. FILE PHOTO | NMG 

Some 14,401 jobs in the formal sector have been declared redundant since March, pointing that majority of the 1.7 million layoffs in the wake of Covid-19 were not linked to scrapped positions.

Labour ministry report tabled in Parliament shows that 628 firms issued the redundancy notices—which are for job positions that were deemed unnecessary.

This means that most firms shed jobs due to lower sales following reduced economic activity in the race to protect profits.

Redundancies come when a business has shut down or scrapped some job positions while layoffs are triggered by reduced work for employment segments that are still needed.

“The ministry has continued to receive redundancy notices affecting employees in the formal sector from employers… ,” Labour, Social Security and Services Cabinet Secretary Simon Chelugui says in the report.

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Some 4,983 redundancy cases worth Sh124.75 million in compensation claims had been resolved at start of the month.

Employers who are not members of trade unions are by law required to personally inform the affected employee and the Labour office of any intended redundancies.

The Employment Act (2007) further compels employers who are affiliated to trade unions to inform the union of any intended redundancy at least 30 days before the termination date.

Mr Chelugui, however said that most firms are yet to issue redundancy notices to the ministry, making it hard to ascertain the extent of the coronavirus economic meltdown amid the unprecedented job losses.

Data by the Kenya National Bureau of Statistics shows that about 1.72 million workers lost their jobs between March and June following imposition of coronavirus-induced lockdown that led to layoffs and pay cuts.

The three months to June was a grim period for workers and businesses during the peak of Covid-19 restrictions that covered travel, mass gathering and a dusk-to-dawn curfew.

At least 3, 022 workers in the manufacturing sector have been served with the notices in line with the law followed by their 2, 965 colleagues in the agriculture sector mainly drawn from the flower businesses.

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