What Employment and Business Laws (Amendment) Bills entail

President Uhuru Kenyatta March 30, 2021, signed into law the Employment (Amendment) Bill of 2019 and Business Laws (Amendment) Bill of 2021. But what do these laws entail?

Employment (Amendment) Bill, 2019

The new Employment (Amendment) Bill provides that parents, who are in the process of adopting children, will now be eligible for one month of leave from work. In this case, an adoptive parent shall be required to notify his or her employer of the intention to have a child placed under their custody, and such notification shall be accompanied by the relevant adoption documents. This notification is supposed to be made at least 14 days before the child is placed under the custody of the adoptive parent.

“The pre-adoptive leave granted to an adoptive parent shall guarantee such adoptive parents an uninterrupted opportunity to make all the necessary arrangements that may be required before the adoptive parent takes full custody and responsibility for the adopted child”, the law states.

The Bill was first passed by the National Assembly on September 17, 2020, and presented to President Uhuru, who referred the Bill back to Parliament for reconsideration.

In his Memorandum, the president noted that the Bill contained provisions relating to surrogacy which is at present not regulated in Kenya.

Assenting to the Bill, as it was then, would therefore mean that the surrogacy agreements provided in the Bill would operate in a legislative vacuum, due to the absence of a substantive legal and regulatory framework to govern surrogacy in the country.

It is for this reason that the National Assembly reconsidered the Bill and amended the Bill in light of the President’s reservations.

Before the amendment, a married female employee was entitled to a fully paid pre-adoption leave of three consecutive months from the date of the placement of the child. A married male employee, on the other hand, was entitled to a fully paid pre-adoption leave for two weeks. This means that the period of leave for prospective adoptive parents has been shortened, and will therefore not be provided with an opportunity to bond with and understand their new child, compared to their counterparts who are accorded three months leave.

Business Laws (Amendment) Bill, 2021

The Business Laws (Amendment) Bill of 2021, which was introduced by National Assembly Majority Leader Amos Kimunya, gives companies and businesses the right to request information from an insolvency practitioner in respect of a company that has been placed under administration.

The insolvency practitioner is obliged to provide the information requested within five days or such other number of days agreed between the insolvency practitioner and the creditor.

The amendments further seek to clarify that an administrator can distribute routine payment to unsecured creditors without the court's permission. It also seeks to introduce a pre-insolvency moratorium period of 30 days to prevent creditors from taking an enforcement action while a company considers its option for rescue. Before the amendment, companies with large outstanding liabilities were ineligible to obtain a moratorium.

It is also no longer necessary for a Kenyan incorporated company to have a ‘common seal’ or attach seals to documentation. A company seal is a stamp used to validate official documents, like contracts, certificates, deeds, etc. Company seals contain the name and registration number of the company. The new law eliminates the requirement of affixing a company seal in the execution of company documents, contracts, and deeds.

A document, contract, or deed will instead be considered to be validly executed by a company if it is signed on behalf of the company by two authorized signatories or by a director of the company in the presence of a witness, who attests the signature.

This is intended to do away with the expensive and cumbersome process of having a sealing device and red wafers on documents that have to be embossed and then witnessed by two directors or one director and the company secretary. It also reflects the increasing use of technology to enable the execution of documents.

These changes are in line with global practices; they seek to ease doing business in Kenya. In addition, the new law will now facilitate businesses to hold hybrid and virtual meetings and support business operations as a result of the challenges experienced during the Covid-19 pandemic, saving businesses costs that would have been incurred in holding physical meetings.