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Sacking, reducing employee's salary now illegal - MPs pass 5 new laws to deal with Coronavirus crisis

Strong message to employers

Sacking, reducing employees' salary illegal - 5 laws passed by MPs over Coronavirus crisis in Kenya

The National Assembly on Wednesday passed five new laws aimed at easing the effects of Coronavirus and future pandemics on Kenyans.

The House amended the Employment Act, No.11 of 2007, to cushion employees from possible job losses and allow employers to put in place mechanisms for retaining employees in the event of inability to pay salaries.

"The law now prohibits employers from terminating contract of service, dismissal or coercion of an employee to take salary pay cuts.

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"Employers who are unable to meet their obligations are now to arrange with their employees to take unpaid leave of absence instead of sacking them," a brief from parliament read.

Kenyans will not be listed on CRB during Covid-19

Parliament also ratified measures that had been put in place to prevent Kenyans from being listed on the Credit Reference Bureau (CRB) for failing to service their loans during the pandemic.

"The House amended the Law of Contract Act (Cap. 23) so as to cushion the public from liability for not honouring contractual obligations as a result of the economic effects associated with COVID-19 pandemic.

"The House has inserted new section 3A to the Act so as to exclude a contract which was existing prior the commencement of this section, the COVID-19 pandemic shall be construed as a “force majeure” or natural act of God.

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"Listing in CRB – the Assembly has amended the Banking Act (Cap. 488) to protect persons unable to service their loans due to prevailing economic difficulties arising from COVID-19 pandemic from being referred to the Credit Reference Bureau (CRB) for listing as loan defaulters," the laws now read.

Two other laws now read: "Exemption of VAT on Personal Protective Equipment (PPEs) –Zero rated the production of Personal Protective Equipment and facemasks,for use by medical personnel in hospitals and clinics,or by members of the public in the case of a pandemic or a notifiable infectious disease.

"Easing access to housing mortgages - the House removed restrictions on use of Retirement Benefit Scheme funds to secure a mortgage loan.With the amendment passed by the House, Kenyans enrolled to the scheme can now use a percentage of the funds for purchase of a residential house."

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