The Employment Act, 2007, was a landmark law that established a comprehensive legal framework for managing employment relations in Kenya. It aimed to safeguard workers’ rights, regulate termination procedures, and promote fair working conditions in line with international standards, particularly those set by the International Labour Organisation (ILO). While the Act was a significant step forward, nearly two decades later, shifts in the economy, work patterns, and social dynamics suggest it may be time for reform to ensure it remains relevant and effective.

Since the Act’s implementation, the labour market has undergone substantial transformations. The rise of the gig economy, technological advancements, an expanding informal sector, and global changes in work patterns present new challenges that the current framework does not fully address. These developments, including the growing influence of informal and freelance work, the increasing prevalence of remote work, and the continuing youth unemployment crisis, all point to the need for a reassessment of the Employment Act, 2007.

Informal employment: A growing gap

The informal sector, which employs the majority of Kenya’s working population, is one area largely overlooked by the Employment Act. Currently, more than 80% of Kenya’s workforce is engaged in informal labour. These workers, who are primarily involved in small-scale farming, trade, and other forms of self-employment, often operate without the protections offered by the Employment Act. They face poor working conditions, including long hours, low pay, and a lack of social security benefits.

This gap in the law is particularly problematic, given the informal sector’s rapid growth. With millions of workers engaged in informal employment, the failure to extend legal protections to this workforce undermines the Act’s goal of ensuring fair and decent work for all. As the sector grows, there is an urgent need for legal recognition of informal workers and mechanisms to guarantee their rights, including fair pay, occupational health and safety, and social security.

The gig economy: Unrecognised work patterns

The gig economy, which involves short-term, flexible jobs often facilitated by digital platforms, has become a major component of Kenya’s labour landscape. Companies like Uber and Jumia, among others, provide employment opportunities for thousands of workers. However, these nuances are not adequately provided for under the current regulatory framework.

The Employment Act, which was drafted with traditional employer-employee relationships in mind, does not adequately address the complexities of gig work. Gig workers are often considered independent contractors, which means they lack the security and benefits that come with formal employment. This gap in the law leaves a growing segment of the workforce without adequate protection.

Furthermore, the rise of remote work, accelerated by the COVID-19 pandemic, presents additional challenges. As many workers now operate from home or other non-traditional workspaces, the current legal framework offers limited guidance on issues such as working hours, workplace safety, and compensation. The cross-border nature of remote work, where foreign companies may employ Kenyan workers, further highlights the inadequacies of the Employment Act.

To address these issues, the Act must be revised to incorporate gig and remote workers, ensuring they receive the same protections as those in traditional employment. This includes provisions for fair pay, access to health insurance, reasonable work hours, a safe working environment, and the right to organise and engage in collective bargaining.

Youth unemployment and skills mismatch

Kenya faces a significant youth unemployment crisis, with over 800,000 young people entering the job market each year. In addition, many struggle to find stable, well-paying jobs due to a mismatch between their skills and the demands of the labour market. The Employment Act, while comprehensive in some areas, does little to address these challenges, particularly in relation to skills development, internships, and entry-level opportunities.

The Act does not provide sufficient incentives for employers to invest in training programmes or internships that would offer young people real-world experience. As a result, many youths are forced into informal or precarious work, often without the protections and benefits of formal employment. A review of the Employment Act should focus on creating mechanisms that encourage employers to offer internships, mentorship, and skills development programmes. These initiatives would help bridge the gap between education and employment, providing young people with the experience they need to secure stable jobs.

Dispute resolution mechanisms: Access to justice

One of the significant challenges in Kenya’s labour market is access to justice for workers seeking to resolve disputes. While the Employment Act established the Industrial Court and a framework for resolving labour disputes, many workers still face delays and high costs when seeking justice. This is especially problematic for workers in the informal sector and the gig economy, who often lack the necessary resources and knowledge to navigate the legal system.

To improve access to justice, the Employment Act could benefit from the introduction of more accessible and efficient dispute resolution mechanisms. This might include the establishment of alternative dispute resolution (ADR) methods, such as mediation or arbitration, which would provide quicker and more affordable options for resolving conflicts. Additionally, decentralising labour dispute resolution services could ensure that workers across the country have access to timely and fair justice.

Adapting the Employment Act to contemporary needs

The Employment Act of 2007 has become increasingly outdated in light of the changes in the labour market. The rapid expansion of the informal sector, the rise of gig and remote work, and the persistent challenges of youth unemployment all highlight the need for a thorough review of the Act. Failure to update the law risks leaving a significant portion of the workforce without legal protection, exacerbating inequality and hindering Kenya’s economic progress.

A revised Employment Act would need to be inclusive, adaptable, and forward-thinking. It should provide comprehensive protections for all workers, regardless of their employment status, and address emerging issues such as mental health, work-life balance, and the challenges of precarious employment. Modernising the Act allows Kenya to ensure that its labour laws reflect the realities of the 21st century, fostering a fairer, resilient, and competitive workforce.

In conclusion, the failure to update the Act risks leaving a significant portion of Kenya’s workforce without legal protections, worsening inequality, and impeding the country’s economic growth.