Workers hang on hope as Ruto only offers them pay rise promise

Kenyan workers walked away from Labour Day celebrations with little to smile about having come with expectations of a wage increase.

This was despite an earlier push by Central Organisation of Trade Unions (Cotu) Secretary General Francis Atwoli for a 22.5 per cent increase in minimum wage.

President William Ruto, however, gave a promise of a six per cent hike, directing the Labour Ministry to look into modalities for implementing the increment.

The President appeared to be making an attempt to balance between appeasing workers who have been grappling with reduced incomes and the high cost of essentials and employers who have protested the rising costs of doing business in the country.

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“This year, we must increase the minimum wage. I know that (Federation of Kenya Employers) FKE had a request and has made a case against increasing minimum wage it but this time round, we must do something about it,” he said.

“I am directing the CS for Labour to convene the relevant committee to sit down, discuss and look into how we can increase the minimum wage by at least six per cent. We will look into how we will be doing this going forward.”

Last year, the government did not give a minimum wage increase, which has traditionally been seen a gift to workers on Labour Day. Instead, President Ruto said the country would adopt a “radical remuneration policy that will be responsive to the cost of living”.

At the time, he noted that the minimum wages would be guided by sustainability and productivity while rationalising public and private sector wages to address disparities.

During 2022’s celebrations, former President Uhuru Kenyatta increased the minimum monthly wage by 12 per cent, which was from Sh13,572 to Sh15,201 for cities, Sh14,025.40 for all former municipalities and Sh8,109.90 for all other areas.

Cotu was pushing for a 22.5 per cent increase in statutory minimum wage this year to cushion workers from the high cost of living and reduction of disposable income, hit by higher taxes such as the affordable housing levy and high taxes on petroleum products that has affected the cost of other goods and services.

Employers objected to the hike. FKE noted that wage increase should be guided by deliberations by the national wage council as well as other sectoral councils, which have not held any meetings. 

FKE Executive Director Jacqueline Mugo, addressing workers during yesterday’s celebrations, noted that there are legally mandated institutions to advise the government on wage increases but had not met to deliberate on issues such as minimum wage increase. 

“I understand where he (Atwoli) is coming from because workers are struggling with a reduction in their take-home pay, but the reality is that there is no legal framework to support general wage increases in Kenya.

“This would negate freedom of enterprise, the determination of wage review beyond minimum wage is done through negotiation of CBAs or at the employment contract level,” she said. 

Advise government

“I would like to implore us all as labour sector leaders and as a country to delink wage adjustment including minimum wages from the national Labour Day celebrations and to allow these institutions to do their work and advise the government.”

“As of today, it is unfortunate that no minimum wage council has met to deliberate and advise on the minimum wage adjustments as required by law.

Mugo noted that employers are requesting a stable, predictable and simple regulatory framework that will enable businesses to cope and grow. Such a framework should also support the informal sector. 

Atwoli said the wage council did not have to meet to advise the President on the direction to take on increasing the minimum wage and that “anything the President says is law”.

He, however, added that in requesting wage increments, Cotu and trade unions are guided by research. 

This is even as he urged the national and county governments to give room to the informal sector to grow, noting that it plays a critical role in creating employment. 

“Our formal economy is reliant on the informal economy which has made our economy resilient. I want to appeal to the President to support the informal sector with infrastructure and also ask Governors to make sure markets are built and informal sector players are not harassed by taxes and so on. These are the people who drive our economy,” he said. 

Ruto explained the rationale behind his push to send Kenyans to work abroad. He said labour migration was a critical form of employment creation. He said every year, one million people get into the job market while only 200,000 are absorbed in the formal sector. 

“Labour migration is, therefore, a critical component of our socio-economic development, benefiting both Kenya and the countries that welcome our workers. 

“This is why we continue to negotiate Bilateral Labour Agreements to facilitate safe and orderly labour migration, protecting Kenyan workers’ rights and facilitating their access to international job markets,” Ruto said.

“We are at an advanced stage of concluding several bilateral labour agreements with many countries, including the UK, Germany, Austria and Saudi Arabia, among others.”

He said every year, Kenya would send 250,000 Kenyans to work in other countries. This, Ruto noted, would increase remittances from $4 billion to $10 billion over the next five years.

Labour Cabinet Secretary Florence Bore said the government is putting in place measures that would ensure Kenyans working abroad are protected.

Other than reviewing the law, Kenya is signing BLAs to allow for the orderly movement of Kenyans abroad.  

“In pursuit to address high unemployment, the government has continued to engage with other governments who have a high demand for labour through initiating negotiations of BLAs and MOUs to provide sage and orderly labour migration,” she said. 

She said so far, the government had signed four BLAs and another seven were at an advanced stage. Bore also said another 14 agreements were in their initial stages. 

“The aim is not only to provide overseas opportunities but also to encourage the return of skilled workers with enhanced capabilities,” she said, adding that private recruitment agencies had advertised some 254,000 jobs on the National Employment Authority’s website. 

Bore also said the government is reviewing the law to improve on the conditions of Kenyans who work as online freelancers referred to as gig economy workers, who are contracted by companies, most of which do not have a presence in the country 

She noted that the gig economy workers are at a disadvantage, working without social protection and other benefits that a person in employment would have traditionally enjoyed. 

The number of Kenyans who could work in the gig economy could go up as the government pursues its digital transformation agenda. 

“The emergence of the gig economy signifies a profound shift in employment dynamics across the world. The demand for labour in the digital economy necessitates the need to devise new strategies in governance and policy framework for fair distribution of gains and opportunities,” said Bore. 

“The new jobs in the digital and gig economy come with limitations on how work is organised and regulated with workers having limited job security, restricted access to social protection and the right to organise collectively. My ministry is collaborating with stakeholders to review labour laws in this regard.”