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Uhuru Kenyatta raises minimum wage by 5pc

Tuesday May 1 2018

KENNEDY KIMANTHI
By KENNEDY KIMANTHI
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Kenya workers will enjoy a five per cent increase in minimum wage amidst concerns that some companies are yet to implement last year’s 18 per cent pay rise.

President Uhuru Kenyatta said this  was in recognition of “good work by the workers and cognisant of the rate of inflation of 4.8 per cent recorded this year”.

The President’s announcement was contained in a speech read by Labour Cabinet Secretary Ukur Yattani yesterday at Uhuru Park during this year’s Labour Day celebrations.

INFLATION

The raise comes as relief to many workers who have been hardest hit by runaway inflation driven by increased food prices therefore weakening their purchase power in the last two years.

The latest wage increase means a general labourer in Nairobi, Kisumu and Mombasa whose monthly minimum is currently at Sh12,926 will get an additional Sh646, totalling Sh13,572.

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More jobs are expected to be created by deepening investments especially in the Big Four agenda areas – affordable housing, manufacturing, food security and universal healthcare.

According to the Head of State, the action plan on these four critical areas offers an opportunity for “decent jobs.”

“We may not agree with organised labour on many issues but clearly on creating jobs, there is an agreement,” Mr Kenyatta said.

“More jobs will come from deepening investments and from a stable environment – one that is led by the spirit of dialogue and understanding. The Big Four are labour intensive and all require harmonious labour relations which all actors must strive to achieve,” Mr Kenyatta said.

The President also highlighted recent initiatives undertaken by his government which, he said, will improve the  labour sector.

These include recruitment of new labour officers to be deployed in different counties to handle the rapidly evolving sector.

LABOUR ACT

He directed the National Treasury to focus more funds on recruitment of additional officers. He also cited the posting of labour attaches to the Middle East states of Qatar, United Arab Emirates (UAE) and Saudi Arabia.

“Bilateral labour agreements were also signed with Saudi Arabia and UAE to offer employment and protection of Kenyan workers in those countries,” he said.

The President also emphasised the need to employ alternative dispute resolution mechanisms to labour disputes. Last year was marred by workers in various sectors going on strike to demand salary increases. Health and education were the hardest hit, as doctors, nurses, clinical officers and lecturers boycotted work.

The government has in the 2018/19 financial estimates proposed to allocate money for implementation of the Labour Institutions Act which outlines these alternative mechanisms.

“The tendency to down tools as the first option following any disagreement has hurt the economy and infringed on the welfare of mwananchi,” the President said.

But Central Organisation of Trade Unions (Cotu) secretary-general Francis Atwoli lamented that measures instituted by the government last year to tame the rising cost of living were yet to be implemented.

The President had issued a directive to raise non-taxable bonuses and overtime to cushion low-income earners.

Mr Atwoli said this was yet to be gazetted.

BONUSES

“Labour CS should also ensure companies implement the wage increment announced last year by the President. Non-taxable bonuses and overtime was increased to Sh100,000 but this is also yet to be implemented. This shows that some people in government are not taking his directive seriously,” Mr Atwoli said.

The Federation of Kenya Employers Executive Director Jackline Mugo proposed the formulation of a policy to offer workers decent incomes at the same time ensuring businesses remain competitive and sustainable.

She asked the State to address challenges linked to the shrinking formal sector and protect the few formal jobs remaining.

“For the country to achieve the Big Four agenda, we need to change the structure of employment in the country. We not only have high unemployment situation estimated to be at 40 per cent by the UN Human Capital Index 2018, we also have very high level of informality,” she said.