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On 15 March 2020, President Kenyatta gave a speech on how the Kenyan Government intends to manage the impact of the coronavirus (COVID-19) outbreak. We outline these measures below and also provide some pointers:

Travel

• For 30 days following the announcement, or as varied by the National Emergency Response Committee, travel is suspended for all persons coming into Kenya from any country with reported COVID-19 cases.
• Kenyan citizens and any foreigners with valid residence permits entering Kenya will be required to self-quarantine or to go to a government-designated quarantine facility.
• All persons who entered Kenya within 14 days prior to the announcement must self-quarantine. If any person exhibits symptoms such as cough or fever, they should present themselves to the nearest health facility for testing.
  
  

Preventative measures

• School operations have been suspended with immediate effect and universities and other tertiary institutions are to close by Friday, 20 March 2020.
• Where possible, government offices, businesses and companies are encouraged to allow employees to work from home, with the exception of employees working in critical or essential services.
• Government registries and the courts are closed except for the handling of emergency matters. See below for more details.
• In order to avoid the risk of transmission through physical handling of money, cashless transactions such as mobile money and credit cards are encouraged. Mobile operators and banks have been implored to take into consideration the situation, and reduce the cost of transactions during this period.
• The Central Bank has issued a press statement for the relief of fiscal matters as summarised below.
• In line with the directive to avoid crowded places, citizens are encouraged to:
  • avoid congregating, including in places of worship;
  • minimise attendance to social gatherings including weddings and funerals, and to restrict the attendance to immediate family members;
  • avoid crowded places, including shopping malls and entertainment premises;
  • minimise congestion in public transport wherever possible; and
  • limit visitors to hospitalised patients in both public and private hospitals.
    
    

Health and Hygiene

• Public transport including all matatus, hospitals and shopping malls are encouraged to provide soap, water and hand sanitisers and ensure that all their vehicles and premises are regularly cleaned and disinfected.
  
  

Legal implications

Employment

• Employers are under an obligation under the Occupational Safety and Health Act 2007 to keep their place of work safe, which includes taking the necessary preventative measures to combat COVID-19.
• Salaries may not be reduced unless in agreement with the employee.
• If an employee is in quarantine for 14 days, then it may be necessary to enter into an addendum to ensure that the employee is paid for this period or to provide for whatever measure is fair in the circumstances.
• Where employees are working from home, the same rights, obligations and responsibilities arising from their employment contract will continue to apply. An employer would be required to provide the necessary resources to facilitate the employees to work from home. The employees would also continue to be under obligation to commit themselves to discharging their work responsibilities as much as possible under the circumstances lest they be in breach of their employment contracts.
• In certain cases or industries, due to the nature of the employees’ work eg, for most blue collar jobs, a work from home arrangement may not be feasible and as such, this absence would be treated as paid time off. However, given that the absence from work is necessitated by factors beyond employees’ doing, this time off would not automatically be deducted as part of the employees’ annual leave entitlement.
• Treatment of time off from work in the case of piece-rate workers, consultants or independent contractors would be different as these would not be entitled to pay where specific work has not been done unless their contracts specify otherwise.
• Where employees are working from home as part of the preventative measures being broadly taken to counter the spread of COVID-19, this would not automatically be treated as either annual leave or sick leave.
• Sick leave entitlements would only kick in once an employee is actually sick or in medically required quarantine, for instance, where the employee has been travelling or has potentially been exposed. Such an employee on sick leave should not be required to work during this period. If they are able to work and are required to work, their absence from the office would not be treated as sick leave. An employee on sick leave would be entitled to a minimum of 30 days’ sick leave with full pay, followed by 15 days’ sick leave with half pay.
• The work-from-home arrangement would also not be treated as annual leave provided that the employee is away from the office with the knowledge and consent of the employer and provided that they are required to keep working during this period.
  
  

Contracts

• Contracts should be reviewed to establish if they contain anyforce majeureclauses and if these can be implemented. Careful consideration should be given to any specific timing and notice requirements.
• Not all contracts contain such clauses and they can't be relied upon in all cases. If this happens to be the case, it is important that other remedial or mitigation steps are explored at an early stage. For instance, contract variations and appropriate extensions etc. by mutual consent.
• In the absence of an expressforce majeureprovision, parties may be able to rely upon the doctrine of frustration. The doctrine of frustration is not available if the contract contains an expressforce majeureprovision, since the provision will be regarded as the agreed allocation of risk between the parties.
  
  

Tax

• Tax must continue to be remitted in the usual manner under applicable laws, although there are some specific dispensations that may be sought under the Tax Procedures Act. There is scope for seeking extensions for the filing of tax returns and also delaying tax payments. In each case, an application will need to be made to the Kenya Revenue Authority.
• Tax payers should continue to be mindful of the broad enforcement powers of the Kenya Revenue Authority.
  
  

Government registries

• As various government registries (Companies, Lands and Courts) have been temporarily closed other than for urgent applications (see below for more specifics), it is unclear what impact this will have on statutory imposed timelines, for example. Stakeholders are advocating for temporary relaxation of these and, where possible, the use of online platforms.
• Lands Registry: In a statement sent to the media, the Ministry of Lands and Physical Planning announced a scaling down of operations at all land offices and registries throughout the country for a period of 28 days effective Tuesday, 17 March 2020.Emergency cases will only be handled by the Ministry’s customer care desk.
• Companies Registry: The Companies Registry remains closed for service to members of the public for the next two weeks.
• Immigration Registry: The Immigration Department has rescheduled individual appointments to ensure that the Registry office is not overcrowded by members of the public. New appointment dates will be notified to the public via text message. Only emergency cases will be handled by the limited Registry staff available for service.
• Courts and Court Registry: The National Council for the Administration of Justice (NCAJ) has agreed to scale down court activities throughout the country over the next two weeks effective 16 March 2020, with many civil and criminal matters being suspended. The courts only continue to handle cases under certificates of urgency, allowing the court registry open to receiving certificates of urgency only. With regard to filing of appeals, the Chief Justice and President of the Supreme Court, Hon. David K. Maraga (EGH) directed that all courts accept filing of all pleadings.
• Trademarks and Patents Registry: The Trademarks Registry remains open but with limited interaction between members of the public and the Registry officials.
  
  

Land transactions, landlords and tenants

• The registry closures will no doubt have an impact on various registration and other formalities. This will, in turn, delay the completion of land and other finance transactions.
• Specific advice should be taken with regard to the rights and obligations of either the landlord or the tenant. Underlying leases or similar will govern the relationship between landlord and tenant. It is conceivable that the pandemic will have an adverse effect on the ability of tenants to honour lease obligations, particularly payment of rent. In the absence offorce majeureprovisions, frustration will need to be proved in order for tenants to be absolved of potential breaches.
• Landlords will need to be careful about making promises and representations to tenants during this time, as those may be relied upon.
  
  

Data protection

• Businesses that will be looking to collect personal information such as the health status of an individual, dates of travel, test results, information about family members and persons with whom they have been in contact will be considered sensitive personal data under the Data Protection Act of Kenya.Care should be taken that such data is only collected, used, stored and processed with the express consent of the data subject.
• It should be noted that health data should only be used and processed by a health care provider or by a person subject to the obligation of professional secrecy under any law.It is possible for this requirement to be met if it is necessary for reasons of public interest in the area of public health.
• Guidance:
  • only collect personal data with the express consent of data subjects;
  • appropriate security measures should be put in place in respect of the storage of such data.
    
    

Central Bank of Kenya measures

• Following a meeting between the Central Bank of Kenya (“CBK”) and commercial banks in Kenya, the CBK issued a press statement on 18 March 2020 providing emergency measures to alleviate the economic effects of the COVID-19 pandemic. It is noteworthy that these emergency measures are only applicable to borrowers whose loan repayments were up to date as at 2 March 2020.
• The emergency measures to be undertaken by the commercial banks include:
  • provision of relief to borrowers on their personal loans based on their individual circumstances arising from the pandemic. It is not immediately clear what “relief” it is intended the banks provide.
  • review of requests initiated by the borrower for extension of personal loans for periods of up to one year.
  • assessment and restructuring loans taken by corporate borrowers (and SMEs) based on their respective circumstances arising from the pandemic.
  • meeting all costs related to extension and restructuring of loans by the banks.
  • facilitating use of mobile digital platforms by waiving attendant charges for balance inquiry; and
  • eliminating all charges for transfer of money between mobile money wallets and bank accounts.
• While these measures may offer some comfort to borrowers, we note that the CBK press release is persuasive in nature and the implementation of these emergency measures will largely depend on the various commercial banks’ goodwill as the restructuring of loans will need to be renegotiated and agreed between the parties, and only on application of the borrower with each case being examined on its own merit.
• We also note that no special relief measures have been put in place by the CBK or the National Government to:
  • meet cash flow and working capital constraints; or
  • to place any moratorium on repayment of principal and/or interest on loans as we have seen in other jurisdictions.
    
    

Telecommunications media and technology

• The Communications Authority of Kenya (“CA”) is still actively receiving all applications for licences and there is no closure of their offices. Applications sent via email to the CA are also being received, however hard copies of the application documents are required for the approval process.
• The CA has also partnered with mobile network operators (Safaricom, Airtel and Telkom) to allow them to send bulk information messages on COVID-19 to all local mobile phone users. This is to ensure there is accurate dissemination of information about the virus.
• The CA regulations on provision of postal services allows postal services licensees to suspend the provision of postal services in the event of occurrence of aforce majeureAt the moment, no postal services licensee has suspended any of the postal services.
• The CA regulations require that all interconnection agreements haveforce majeureprovisions in the event of occurrence of aforce majeure.We are yet to see any of the licensees suspending any interconnection agreements due to the COVID-19 pandemic.
  
  

Price control

• The president has warned traders against hiking prices as a result of the unfortunate situation in the country. It should however be noted that under the provisions of Price Control (Essential Goods) Act, the government has the power to declare any type of goods as essential goods and determine the maximum prices of the commodities in order to secure their availability at reasonable prices. We would expect essential commodities such as maize meal, oil, sugar, milk and bread to have controlled prices. The Act however, does not extend to essential services.
• Further, the Competition Authority of Kenya has extensive powers under the Competition Act to investigate and impose sanctions for any conduct that amounts to an unconscionable conduct and restrictive trade practices. We understand that the CAK is actively monitoring such practices.
  
  

Statutory timeframes

• Stamping of documents: The Stamp Duty Act (Cap 480) provides powers for the Collector of Stamp Duties to stamp documents out of time. The Law Society of Kenya will be engaging with the Collector on 20 March 2020 and it is anticipated that there will be further guidance regarding the reprieve on the payment of stamp duty.
• Other Statutory Time Frames: The Law Society of Kenya will be engaging with the relevant ministries from 20 March 2020 and it is hoped that further guidance will be forthcoming after the meetings.
  
  

Conclusion

COVID-19 will inevitably impact on the Kenyan business environment. The business environment will need to be proactive and adaptable and at the same time ensure that it operates within the confines of the law.

Please do not hesitate to contact us if you have any particular concerns from a legal perspective. We would be happy to assist.

As His Excellency Uhuru Kenyatta stated, there is no need to panic but rather to work together with all the government offices to ensure that a stable and economic future for the business environment in Kenya is realised.

For more information, please contact:

Nigel Shaw, ENSafrica Kenya Managing Partner, [email protected], +254 795 932422

COVID-19, also known as the Coronavirus, is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) that was declared a pandemic by the World Health Organization on 11 March 2020. The disease has since been reported in over 190 countries.