The Federation of Kenyan Employers (FKE) has issued demands to the government after it revealed that 5,567 Kenyans were declared redundant across various workplaces over the past three years.
FKE CEO Jacqueline Mugo while addressing the press on Friday, January 24, noted that this figure is likely to be higher, as it only accounts for members of the federation.
The manufacturing sector was the hardest hit, with numerous job cuts affecting its workforce.
“Generally, the 2024 business environment posed significant challenges, including low demand, liquidity constraints, rising costs, challenging tax regime, frequent legislative changes, a shrinking market and loss of competitiveness,” read the statement in part
“These challenges strained employers, reduced productivity, and hindered job creation. They also led to redundancies, closure of businesses and difficulty in compliance with the Employment Act regarding the two-thirds limit set on payroll deductions for each month.”
FKE Wants Government to Clear Ksh 1.1 Trillion Pending Bills
In addition to addressing redundancies, employers are urging the government to clear Ksh1.1 trillion in pending bills.
They argue that settling these outstanding debts would significantly alleviate the financial strain on businesses and improve the overall economic environment, creating a more conducive atmosphere for growth and investment.
FKE called upon government to put in place policies that support business growth and sustainability to spur job creation and improve the living standards of Kenyans.
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The employers urged the government to maintain fiscal responsibility in the upcoming 2025/2026 budget by prioritizing efficiency in public service delivery and honoring contracts, including Collective Bargaining Agreements (CBAs).
Others include ensuring timely payment of bills including clearance of pending bills, strengthening accountability and transparency in budget-making and execution to curb waste, fraud, and abuse.
Additional steps include cutting non-essential government spending, reallocating resources to key development programs, managing debt wisely, reducing bureaucracies, and eliminating role duplication.
Demand of Lower Taxation from Government
To lower the cost of doing business, the Federation urged the government to adopt a stable, predictable, and progressive tax regime to foster business planning and long-term investment.
“The employers appeal to the government not to introduce any new taxes that could burden businesses and increase payroll deductions,” said FKE.
“To support businesses and foster economic growth, there is a need to lower administrative, production and service taxes while streamlining regulatory requirements to reduce compliance costs.”
At the same time, FKE proposed the formalization of informal enterprises to stop shrinking in the private sector.
The federation stated that opening new market access opportunities, particularly for small and medium-sized enterprises, will support their growth and innovation.
“Increasing access to credit for production will help drive business development while supporting the growth of village household cottage industries can serve as a solid foundation for rural economic growth, creating jobs and fostering local entrepreneurship,” it added.
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Employers Asks Govt to Strengthen Labor Relations
Furthermore, FKE said the government needs to strengthen labor relations through enhancing the financing of labor market institutions and strengthening the quality of social dialogue in the country.
The employers also demand the gazettement of members of the tripartite labor institutions, including the wages council that awaits gazettement, such as the private security wages council, hotel and catering trade wages council, and the seafarers’ wages council.
“Effective social dialogue is vital for industrial harmony. However, non-implementation of negotiated agreements, such as return-to-work formulas, undermines trust and disrupts essential sectors like healthcare and education,” the employers noted.
“The Federation of Kenya Employers calls for strengthened tripartite structures to ensure transparent, respectful, and constructive engagement.”
They noted that social dialogue must be a priority for fostering sustainable industrial peace and development and the overall quality of discourse should be measured to enhance social harmony and unity in the country.
This, according to them, will enhance confidence in Kenya as an investment destination and contain capital flight.
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