In Kenya the minimum wage fixing parameters are outlined in the Wage Guidelines and Section 44 (5) of the Labour Institutions Act (2007).
Internationally, we refer to the ILOs Minimum Wage Fixing Convention, 1970 (No. 131) and Article 23(3) of the UN Universal Declaration on Human Rights.
Intuitively, these benchmarks mutually draw from Chapter Four on the Bill of Rights of the Constitution of Kenya. In particular, Article 41 of the Constitution confers every worker the right to fair Labour practices (Article 41 (1); fair remuneration (Article 41 (2a); and reasonable working conditions (Article 41 (2b) while Article 43 grants workers with social and economic rights, which include the right to social security.
There is a dire need for creation of decent work where workers will freely access quality and productive work, have their rights protected and enjoy social protection in a mutual dialogue set up.
In reference to the current wage guidelines issued on November 23, 2005, these guidelines aim to sustain and promote economic performance and are based on the gains realised on productivity, ability of the economy and the employers to sustain increased labour costs and the cost of living compensation.
The guidelines provide that workers should be accorded at least a just minimum standard of living. Compensation should be based on erosion of purchasing power due to inflation and also due to claims from greater Labour productivity.
In this regard, lower wage earners should get up to 100 per cent compensation measured by the Nairobi Lower income Group CPI since the most recent revision of wages.
Compensation award should be on a decreasing percentage of the rise in the cost of living to the higher wage earners to narrow the wage differentials.
Further, Section 44(5) of the Labour Institutions Act (2007) provides that in the performance of its functions, a wage council shall take into consideration the needs of employees and their families, economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high-level of employment and the need to encourage investment and the ability of employers to carry on their business successfully as well as the operation of small, medium and micro enterprises while valuing the cost of living and alleviation of poverty.
Any proposal for wage increment on 2018 must take into consideration the minimum subsistence level. This the likely impact of any proposed conditions of employment on current employment or the creation of employment and any other relevant factors.
Workers wage increment should appreciate that Kenya’s economy grew by 5.8 per cent in 2017 compared to a growth of 5.6 per cent in 2016. Efforts made by the Governor of Central Bank has in the same period controlled interest rates at manageable levels.
Such economic improvements were supported by strong macroeconomic environment and greater sectorial improvements in Agriculture, real estate, construction, finance and insurance. In 2016, economic growth was expected to have hit the 6 per cent mark.
The last revision of minimum wage was in 2017 in which it was increased by 18 per cent. However, in 2016, there were no adjustments though the workers’ purchasing power suffered from erosion by the rising cost of living.
However, based on the changes in cost of living and the wage differential index in line with the provisions of the wage guidelines, the employers should consider a wage increment in 2018.
Workers covered by the Regulation of Wages (General) (Amendment) Order and the Regulation of Wages (Agricultural Industry) (Amendment) Order are entitled to a compensation of up to 20 per cent under the two wage councils in 2018. —The writer is the secretary-general of the Central Organisation of Trade Unions (K)