The Bill seeks to provide for:
1. payment of unemployment benefits to certain employees; and
2. the establishment of the Unemployment Insurance Authority.

The Bill seeks to provide income security to employees who have lost their jobs. This means that the unemployed person, despite being jobless, will be able to eke out a living and provide for his/her family

“Authority” means the Unemployment Insurance Authority” established by section 6.

The Authority shall oversee the distribution of the Unemployment Insurance Fund to employees who have lost their jobs.

“benefits” includes the benefits paid out of the unemployment insurance fund, to an unemployed person to which this Act applies as may be prescribed by the Cabinet Secretary under regulations.

These benefits seek to provide income security to employees who have recently lost their jobs.

“child” has the meaning assigned to in the Constitution.

This definition has been used to ensure that the Bill is consistent with the provisions of the Constitution.

“contribution” means the amount payable by the employer or a contributor to the Unemployment Insurance Authority.

The contribution will be used to pay the unemployed people a percentage of their previous salaries.

“contribution” means a natural person:
1. who is or was employed
2. to whom this Act, in terms of section 3, applies; and
3. who can satisfy the Director-General that he or she has made contributions for purposes of this Act.

This definition provides the people that are contributors of the Unemployment Insurance Fund.

“employee” means a person employed for wages or a salary and includes an apprentice, intern and indentured learner.

This definition has been included to ensure the Bill is consistent with the provisions of the Employment Act.

“employer” means any person, public body, firm, corporation or company who or which has entered into a contract of service to employ any individual and includes the agent, foreman, manager or factor of such person, public body, firm, corporation or company.

This definition has been included to ensure the Bill is consistent with the provisions of the Employment Act.

“register” means a register maintained by the Authority under section 24.

The register contains a list of unemployed persons who will be entitled to unemployment insurance.

“Unemployment insurance” means compulsory insurance the purpose of which is to provide labour market services, pay labour market benefits, except unemployment allowance, provide, upon unemployment, partial compensation for the lost income to insured persons for the time of the search for work, compensation of the expenses related to the termination of employment contracts to employees and service relationships to officials in the case of lay-offs, and the protection of the claims of the employees upon insolvency of employers.

Unemployment insurance in this Bill seeks to:
1. provide income security to workers who have lost their jobs;
2. ease the pain of loss of income; and
3. provide temporary financial assistance to employees who have lost their jobs.

The object and purpose of this Act is to establish an unemployment insurance fund to which employers and employees contribute and from which employees who become unemployed or their beneficiaries, as the case may be, are entitled to benefits and in so doing to alleviate the harmful economic and social effects of unemployment.

We propose the amending of this clause to include the Government as a contributor to the Fund.

The Government can act as a Contributor in the following ways:

1. the Government can provide funding on a regular basis, as is done in countries like Turkey, Bahrain and Switzerland;
2. the Government can commit to finance any remaining deficits -this is carried out in Mauritius; or
3. the Government will only contribute to the Fund during recessions – this is done in countries like Germany, Spain and China.

This Act applies to:
1. employees under a contract of employment contemplated under the Employment Act, 2007 and their employers; and
2. b. employees in the national and county governments.

Notwithstanding subsection (1) (a), this Act shall not apply to certain cadre of public officers as may be prescribed in regulations by the Cabinet Secretary taking into consideration the advice of the Salaries and Remuneration Commission and Cabinet Secretary responsible for matters relating to finance.

This clause should be amended to also apply to self-employed workers. Countries like Finland provide unemployment insurance to self-employed workers.

Secondly, we propose that that scope of the Fund be extended to apply to employers/enterprises having financial difficulties due to factors that are beyond their control. For example, businesses which have incurred losses due to the Covid-19 pandemic. This will allow the employer to keep paying its employees until the economy stabilises.

Even though unemployment insurance has several benefits, a critique raised is that it’s not sustainable in developing countries that have a high unemployment rate.

There is established a body to be known as the Unemployment Insurance Authority.

1. suing and being sued;
2. taking, purchasing or otherwise acquiring, holding, charging or disposing of movable and immovable property;
3. borrowing money or making investments;
4. entering into contracts; and
5. doing or performing all other acts or things for the proper performance of its functions under this Act which may lawfully be done or performed by a body corporate.

This purpose of this clause is to give the Authority legal capacity to be able to act in its own name.

The headquarters of the Authority shall be in Nairobi.

The Authority shall ensure reasonable access of its services in all parts of Kenya, so far as it is appropriate to do so having regard to the nature of the service.

Notwithstanding subsections (1) and (2), the Authority shall keep and maintain an up-to-date data system and other service delivery mechanisms that are accessible in all parts of Kenya.

We propose that the Authority should take reasonable measures to ensure it has an office in each county. This will be in line with Article 6 (3) of the Constitution.

The functions of the Authority shall be to:
1. advise the Cabinet Secretary on unemployment insurance policy, unemployment policy and legislation;
2. advise the national and county governments on policies for minimising unemployment;
3. advise the national government on the creation of schemes to alleviate the effects of unemployment;
4. advise both the national and county governments on any policy matter touching on unemployment and unemployment insurance;
5. facilitate the implementation of national government policies and county government policies on unemployment insurance; and
6. perform such other function as may be assigned to it by any other written law.

We propose that the Authority should take reasonable measures to ensure it has an office in each county. This will be in line with Article 6 (3) of the Constitution.

The Authority shall be governed by a Board consisting of:
1. a chairperson appointed by the President
2. the Principal Secretary of the Ministry for the time being responsible for matters relating to finance
3. the Principal Secretary of the Ministry for the time being responsible for matters relating to labour;
4. the Secretary of the Public Service Commission;
5. two youths, one man and one woman, nominated by the National Youth Council and appointed by the Cabinet Secretary ;
6. one person competitively recruited and nominated by the Federation of Kenya Employers;
7. one person competitively recruited and nominated by the Central Organization of Trade Unions;
8. one person competitively recruited with relevant academic qualifications nominated by the Council of Governors; and
9. the Director-General, who shall be the secretary

A person shall be qualified for appointment as the chairperson of the Board if that person:
1. is a citizen of Kenya;
2. meets the requirements of Chapter Six of the Constitution; and
3. has at least five years experience in labour matters

We propose the addition of the following as members of the Authority:
1. an advocate of the High Court of Kenya with at least fifteen years’ experience – the advocate will be able to give his input from a legal perspective; and
2. two members of the public.

Members of the Board, other than the ex-officio members, shall hold office for a term of three years and shall be eligible for reappointment for one further and final term of three years.

The clause provides clarity on the maximum period a member of the Board can stay in office.

The Authority shall operate under the supervision of the Cabinet Secretary.

Where the Authority fails to maintain any prescribed standard in the fulfilment of its functions under this Act, the Cabinet Secretary may give general or special directions to the Authority describing the extent of the failure and stating the steps required to remedy the situation.

The Cabinet Secretary in this clause is granted supervisory powers to ensure that the Authority properly and effectively performs its functions so as to meet the objectives stipulated in this Bill.

There shall be a Director-General of the Authority who shall be appointed competitively by the Board.
A person shall be qualified to be appointed as a Director-General if that person:
1. holds a degree from a university recognized in Kenya in a relevant field;
2. meets the requirements of Chapter Six of the Constitution; and
3. has at least ten years experience, two of which shall be in a management level.

The Director-General shall hold office for a period of three years, on such terms and conditions of employment the Board may determine and shall be eligible for reappointment. The Director-General may be removed from office by the Board in accordance with the terms and conditions of service for:
1. inability to perform the functions of the office of the Director-General arising out of physical mental incapacity;
2. gross misconduct or misbehaviour;
3. incompetence or neglect of duty;
4. violation of the Constitution; or
5. any other ground that would justify removal from office under the terms and conditions of service.

Prior to removal under subsection (4), the Director-General shall be given:
1. sufficient notice of the allegations made against him or her; and
2. an opportunity to present a defence against the allegations.

The Director-General shall:
1. subject to the direction of the Board, be responsible for the day to day management of the Authority;
2. in consultation with the Board, be responsible for the direction of the affairs and transactions of the Authority, performance of its objectives, functions and duties, and the general administration of the Authority;
3. be the secretary of the Board.

This clause creates the post of Director-General who shall ensure the smooth running of the Authority’s day to day operations.

A person seeking employment may register with the Authority.

The Authority shall not charge a fee or any form of charges for registration under this Act.

We recommend this clause to be amended to add sanctions on a former employee who refuses suitable job offers. For example, a reduction or suspension in employment benefits. In countries like Belgium and Denmark, the unemployment benefits can be suspended after the unemployed person rejects the second job offer.

A person shall be eligible for registration under this Act if the person:
1. is a citizen of Kenya or a person who is ordinarily resident in Kenya;
2. is subject to the Act; and
3. is of sound mind.

We propose the addition of a sub-clause that provides the instances in which a person will not be eligible for registration.
The proposed instances are as follows:
1. the unemployed person quit his/her job;
2. the unemployed person voluntarily resigned from work;
3. the unemployed person was fired for just cause;
4. The unemployed person absconded duty; and
5. the unemployed person was suspended from work.

It shall be the responsibility of the applicant to continuously update or communicate to the Authority any changes on their biodata as and when they arise.

This clause ensures that the Authority has the most current biodata of the applicants. This will help in the disbursement of the Fund to the unemployment people.

An applicant shall at all times ensure that all information given to the Authority is factual.

The Authority shall not be responsible for false or inaccurate information submitted by an applicant.

An applicant who offers false or inaccurate information to the Authority commits an offence and shall be liable, on conviction, to a fine not exceeding fifty thousand shillings, or to imprisonment for a term not exceeding three months, or both.

This clause acts as a deterrence to persons who intend to give false information to the Authority.

The Authority shall keep and maintain an up-to date register of all unemployed persons. The register referred to under subsection (1) shall contain:
1. particulars of the unemployed person;
2. academic qualifications of the unemployed person;
3. work experience, if any, of the unemployed person;
4. contact details of the unemployed person;
5. the county from which the unemployed person comes from;
6. ethnicity and tribe of the unemployed person, if known;
7. details of whether the unemployed person is living with any form of disability or challenge;
8. gender;
9. area of specialization, interest or qualifications;
10. such other detail as the Authority may consider necessary.

The register will assist the Authority to know the people who will be entitled to unemployment insurance i.e., you will receive the unemployment benefits if your name is in the register.

The Authority shall seek authorization from each particular person seeking employment to share with prospective employers all or any particular details of the youth seeking employment contained in the register.

The consent and authorization obtained under subsection (1) shall be given to the Authority at the registration of the unemployed persons under section 21.

Where the Authority wishes to use the data for any other purpose other than the purposes authorized under this Act, the Authority shall seek individual consent from the respective or affected unemployed person.

Authorization for use of personal data ensures the Bill is consistent with the provisions of the Data Protection Act.

The Authority shall, at all times, take measures to ensure protection of data on unemployed persons in its possession against abuse or any other adverse consequences.

The right to privacy and other constitutional and statutory rights of unemployed persons shall not be compromised.

This clause ensures the Bill complies with article 31 of the Constitution and the Data Protection Act.

Upon successful interview and securing of employment by a person registered under this Act, the successful applicant shall communicate the same to the Authority in the prescribed manner.

The Authority shall maintain a record of all successful applicants who have secured employment through the Authority.

The Authority shall update its records accordingly and remove an applicant who obtains employment from the register kept under section 25.

The rationale for this is for the Authority to stop paying unemployment insurance to the successful applicant.

We propose adding a clause that makes it an offence for a successful applicant to not disclose to the Authority that he/she has secured employment.

The Unemployment Insurance Fund is hereby established.

The Fund is a body corporate with perpetual succession and a common seal and shall have power, in its corporate name, to sue and to be sued and, in the exercise and performance of its powers and functions, to do and permit all such things as may lawfully be done or permitted by a body corporate in furtherance of its objects.

We propose the creation of unemployment individual savings accounts. This is being carried out in countries like Colombia and Jordan.

It requires workers to accumulate savings in individual accounts that then determine the total entitlement of unemployment benefits to be received in case of job loss. Other contributors will be required to deposit their contributions into the unemployment individual savings account.

Furthermore, we propose that employees cannot use the funds in the unemployment individual savings accounts until their names are included in the register.

However, a disadvantage of this proposal is that there will be insufficient funding to people with low contribution capacities.

The object of the Fund is to provide benefits to employees who become unemployed or their beneficiaries in order to alleviate them from the harmful economic and social effects of unemployment.

We propose amending this clause by adding the words “through no fault of their own” immediately after the word “unemployed”.

This will be consistent with the changes proposed in clause 21 of this Bill.

Secondly, the Bill has not stated the period in which the unemployed person will be entitled to the unemployment benefits. We propose a period of eight months. This will be in line with the South African unemployment insurance scheme where unemployed persons are paid for a period of 238 days.

Thirdly, the Bill needs to state if the period for receiving the unemployment benefits can be extended.

Fourthly, the Bill needs to state the percentage of the salary that the unemployed person will receive as unemployment benefits.

The monies of the Fund shall consist of monies:
1. appropriated by Parliament from the national budget for the purposes of the Fund;
2. provided to the Fund by a county government;
3. contributed by employers;
4. received by the Fund from donations, grants, and bequests from other sources; and
5. payable into the Fund under any Act.

Firstly, we propose adding the contribution of employees’ monies to the Fund.
Secondly, the Bill needs to state the amount to be contributed by both the employers and the employees. We propose an even split of 2%. This practice is carried out in countries like:
1. Austria-3% each.
2. Germany1.5% each.
3. Bahrain-1% each.

However, in countries like Colombia and Kazakhstan, employers’ contributions are higher than worker contributions. We do not agree with this approach as it will impose a huge financial burden on the employer.

The funds of the Authority shall comprise:
1. such funds as may be appropriated by the National Assembly for purposes of the Authority;
2. such moneys or assets as may accrue to or vest in the Authority in the course of the exercise of its powers or the performance of its functions under this Act of any other written law; and
3. all moneys from any other source provided for, donated or lent to the Authority.

Notwithstanding subsection (1) (c), the Authority shall not accept funds, gifts or other donations from any person it regulates.

Any moneys donated to the Authority shall be declared at the end of each financial year.

There shall be paid out of the funds of the Authority all sums required to defray the expenditure incurred by the Authority in the exercise of its powers and the performance of its functions under this Act.

This clause states how the Authority can raise funds to conduct its activities.

At least three months before the commencement of each financial year, the Authority shall cause to be prepared estimates of revenue and expenditure of the Authority for that year.

The annual estimates shall make provision for the estimated expenditure of the Authority for the financial year, and in particular, the estimates shall provide for:
1. the payment of salaries, allowances, pensions, gratuities and other charges in respect of the staff of the Authority;
2. the proper maintenance of the buildings and grounds of the Authority;
3. the maintenance, repair and replacement of the equipment and other property of the Authority
4. the creation of such reserve funds as the Authority may consider appropriate to meet the recurrent expenditure and contingent liabilities of the Authority.

The annual estimates shall be approved by the Authority before the commencement of the financial year to which they relate and shall be submitted to the Cabinet Secretary for approval with the concurrence of the Treasury, and thereafter the Authority shall not increase the annual estimates without the consent of the Cabinet Secretary.

Preparing revenue and expenditure estimates helps the Board to implement plans that have been made.

AThe Authority shall cause to be kept all proper books and other records of accounts of the income, expenditure, assets and liabilities of the Authority.

The accounts of the Authority shall be audited and reported upon in accordance with the provisions of the Public Audit Act, 2003.

The records of accounts show how the Authority raises and spends its funds.

At the end of each financial year or upon request by the Cabinet Secretary, the Authority shall submit an annual report on the discharge of its functions under this Act or any other written law.

The report referred to under subsection (1) shall include:
1. number of unemployed people registered in the period under review;
2. number of unemployed who have secured employment during the period under review;
3. any impediment encountered in the discharge of the functions of the Authority;
4. any policy matters that the Authority may require to be addressed by the Cabinet Secretary, national or county governments;
5. any other matter pertinent to the discharge of its functions under this Act.

An annual report referred to under this section shall be published and publicized.

The annual report will help the Cabinet Secretary know the amount the Government will be contributing to the Fund.