New State agency to monitor staff layoffs

A new State agency is set to keep track of employee recruitment and layoffs data in both private and public corporations in a move intended to provide more accurate national labour statistics.
The National Employment Authority (NEA), formed through an Act of Parliament, has put on notice employers with a workforce of more than 25 to submit records on vacancies, abolished positions and job terminations within two weeks from the time such decisions are taken.

NEA, in the notice, says employers have until today (July 8) to submit returns for the period ended December 31, 2018.

The recently-operationalised agency, tasked with enhancing and managing employment opportunities, plans to prepare and maintain an up-to-date database of job openings, redundancies and sackings in companies.

"For us to come up with a sound and responsive employment policy and strategy for Kenya, we normally need this data. The government has to come from a position where it can provide some kind of guidelines to employers," NEA acting director-general Edith Okoki said in an interview on Friday.

Government policy

The data collected is intended to inform government policy on skills and training gaps in the job market.

Kenya does not have a reliable, up-to-date record of employment numbers especially in the informal sector of the economy.

"An employer shall notify the termination of every employment and of each layoff of a person in writing to the nearest employment service office within two weeks of the termination or lay-off."

The data will be used in computing the official unemployment rate, Ms Okoki said.

The Kenya National Bureau of Statistics (KNBS) collates official data on new jobs created every year through the annual Economic Survey report but does not publish regular unemployment reports.

The bureau reported that the economy created an estimated 800,000 new jobs in both the formal and informal sectors last year.

The latest available official unemployment rate of 7.4 percent, which was released last year, is based on data collected by KNBS through a household survey carried out in the year ended June 2016.

The unemployment rate was criticised for appearing unrealistic in the face of widespread unemployment, compelling KNBS to clarify that it only reflected unemployed persons who were actively looking for jobs.

"We (will) work very closely with KNBS. We want to enforce this so that KNBS will be able to give even better data," Ms Okoki told the Business Daily.

Companies are under the law required to keep updated records of name, age, sex, occupation, date of employment, nationality and educational level of each of employees on their payroll.

Such data covering the period through December should be filed to NEA by end of January every year, the employment law says.

"When a post, which has been notified to the director (NEA) as vacant, has been filled or has been abolished before being filled, the employer shall notify the employment service office of this in writing within two weeks of the filling of the post or of its abolition, as the case may be," reads sections 77-78 of the law.

Annual register

NEA, which was officially launched on May 17, wants companies to file their annual register of employees which by law is supposed to be submitted in January.

The authority says employers who will not have complied with the directive face up to Sh100,000 or a maximum jail term of six months or both on conviction in a court as provided in the law.

The Federation of Kenya Employers (FKE), an industry lobby, has however, protested the decision by NEA to slap non-compliant employers with enforcement measures.

"FKE’s position is that awareness raising be done to encourage voluntary compliance by employers rather than pushing the threat of penalties," said FKE executive director Jacqueline Mugo in an interview.

FKE supports the intended establishment of a centralised system of employment data collection and reporting, arguing this will save companies costs and time associated with periodic filings made to "multiplicity" of State agencies.

"We agree that we need the employment data that NEA is seeking to collect, and FKE supports this as it will help in human resource planning and skills forecasting," said Ms Mugo.

"The challenge is how to reduce the administrative and regulatory burden on employers."

Rarely published

Companies rarely publish data on redundancies and recruitment, with those publicly traded on the Nairobi Securities Exchange (NSE) #ticker:NSE only stating total workforce in their annual reports to shareholders.

An analysis of company reports shows eight listed firms– KCB, Equity, Barclays, Standard Chartered, Stanbic, Housing Finance, Britam and Bamburi – cumulatively cut their staff numbers by 1,637 last year.