Kenya Association of Manufacturers (KAM) has proposed a scheme that is set to cushion workers that lose jobs to unforeseen crises such as the coronavirus pandemic.
The policy proposal will work like an unemployment insurance fund.
KAM suggests that the worker and the employer can contribute something monthly to the fund; alternatively, the government can take the whole of it over and fund it.
In the scheme, manufacturers want workers who find themselves out of work to continue earning some income for the time they are unemployed or work part-time.
The policy toolkit, drafted by KAM jointly with consultancy firm KPMG, and offered to the Treasury and Labour ministry comes in the wake of Covid-19, which has triggered jobs cuts and unpaid leave.
“[They] should set up an unemployment insurance fund to pay benefits to covered workers who become involuntarily unemployed and meet specified eligibility requirements to cushion them in times of unemployment,” say KAM and KPMG researchers in the document.
Nearly 2 million workers lost jobs in three months to June when Kenya imposed coronavirus-induced lockdown that included restrictions on travel, mass gathering and a dusk-to-dawn curfew.
Data from the Kenya National Bureau of Statistics (KNBS) shows the number of people in employment fell to 15.87 million between April and end of June compared to 17.59 million the previous quarter.
KPMG and KAM suggest the proposed fund should be designed to allow workers to either work part-time or remain “formally with the business even if not working at all to ensure quick resumption of activity once normalcy returns”.
KAM lead researcher Simon Githuku said Kenya could borrow from Germany’s and France’s frameworks in setting up such a scheme.
“This is abroad policy proposal that will require more parties to come up with suggestions on how it can be designed. It could be the employee contributing and the money is put in a kitty like an insurance scheme,” Dr Githuku told the Business Daily.
“If you reach retirement age and a pandemic or any other major crisis has not happened, it becomes part of your pension.”
Some countries in the west such as Germany have such schemes.
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