24 Mar 2021

Social Partners in a High - Level meeting organized by the International Labor Organization (ILO) had the opportunity to consult on the proposed establishment of a Unemployment Insurance Fund. This will facilitate the protection of unemployed workers from the loss of livelihood even as they seek employment opportunities. According to the ILO, 38.6% of the global Labour force is covered by law and only 21.8% of unemployed workers receive unemployment benefits. 

The Ministry of Labour and Social Protection, led by the Cabinet Secretary Hon. Simon Chelugui and Principal Secretary Eng. Tum noted that proposal was geared towards Insuring employees against the risk of redundancy and give short time relief to workers when they lose their incomes, are on unpaid leave or when they fall ill and cannot work. The Ministry has put in place an inter - agency committee to map out what is happening in other jurisdictions and inform the proposals for Kenya.

Workers representative Mr. Nadome from the Central Organization of Trade Unions – Kenya expressed concern on burdening the already overburdened workers. He called for clarity in terms of reimbursement should employees never get to a point of using the funds in their lifetime. He noted that in operationalizing the fund we should consider Kenya’s unique situation as a highly informal sector. 

The Federation represented by the Executive Director Mrs. Jacqueline Mugo reiterated the need for solutions that support both workers and employers to bear the storm. This arises from the fact that the state of enterprises are still dire, due to restrictions posed by Ministry of Health. In her remarks noted the need for clear strategy “Together we must come up with a plan that takes into account all these realities.” she said. 

In as much as employers support the formation of the Unemployment Insurance Fund, FKE proposes that the discussions be subjected to a wide and meaningful social dialogue for purposes of building consensus on the best structure and financing model to adopt.  

 Further to this, employers are concerned about the specific coverage and financing of the Unemployment Insurance Fund. The Federation is aware that the proposed changes could increase the insurance rates and the overall cost of employment. On this note, FKE is keen to see that the Unemployment Insurance Fund does not lead to an increase in the cost of doing business and further reduce the ease of doing business. Mrs. Mugo also asked partners to think about how to strengthen the capacity of the National Employment Authority as provider of employment services closely linking it to active Labour Market policies

Moving forward, FKE proposes that a technical tripartite team is formed to do an in-depth discussion and examination and propose the best way forward. Any proposals must also consider and be predicated by the national realities on the ground and what best suits or works for and in Kenya. 

The Federation will seek members views on the structure and implementation of the Fund. Other participants during the deliberations include; Ministry of Labour and Social Protection, Central Organization of Trade Unions- Kenya, National Social Security Fund, Safety and Health Secretariat and the International Labour Organization among others.