8 August 2022 by and Employment Law Alert

The legality of Oppo Kenya Ltd’s employment policy

On 10 April 2022, the Daily Nation wrote an article entitled “Oppo imposes fines on its staff for lateness, unanswered calls” after complaints were made about the apparent stringent policy with regard to the employees of Oppo Kenya Ltd (Oppo). According to the article, Oppo through a memorandum which took effect on 1 April 2022 introduced a policy (the Policy), in which several fines for lateness to work, leaving work early and not responding to calls when working from home, were introduced.

According to the article, employees who reported to work 15 minutes late from the start of the workday or left the workplace 15 minutes earlier than the end of the workday, were fined KES 200 for each occurrence (fines). Moreover, any employee reporting to the office later than 15 minutes from the start of the workday, would be considered to have worked a half day and therefore, half of their wages for the day would be deducted.

The Employment Act of 2007 (Act) requires an employer to pay an employee the entire amount of the wages earned by or payable to an employee in respect of work done at the expiry of every month for an employee. The Act generally does not allow an employer to deduct employee wages in the manner described in the Policy and so we have sought to question the legality of such an arrangement.

Although an employment contract is a contract and therefore able to be varied and amended, it is a special category of contract, in that employee rights are protected rights. In this respect, the Act requires that employee consent is sought prior to any amendment of their contract and in accordance with section 9 of the Act, that consent must be in writing. This is backed by case law in James Ang’awa Atanda and 10 Others vs Judicial Service Commission [2017] eKLR. In that case, the court found that the unilateral variation of the petitioner’s employment contract to include changes such as: shifting from an open-ended contract to a fixed-term contract; undefined probationary period; and the reduction of the employee’s wages as unlawful as it went against the right to fair labour practices protected under the Constitution.

In Joyce Mukolwe v Mustek East Africa Limited [2021] eKLR the claimant’s contract was unilaterally amended to include a similar policy to the Policy. Subsequently, the claimant’s salary was deducted on account of her late arrival to work in conjunction with other deductions. The court deemed this action to be unjustifiable and ordered the employer to refund the deducted amount. Yet the objection, in this case, was not to the policy but its unilateral implementation.

Even if consent is sought, it is worth bearing in mind that the Act sets out the minimum provisions applicable to an employment contract. In this respect, the Act states in section 19 that employers may only make deductions, in the following circumstances:

a) any amount due from the employee as a contribution to any provident fund or superannuation scheme or any other scheme approved by the Commissioner for Labour to which the employee has agreed to contribute;

b) a reasonable amount for any damage done to, or loss of, any property lawfully in the possession or custody of the employer occasioned by the wilful default of the employee;

c) an amount not exceeding one day’s wages in respect of each working day for the whole of which the employee, without leave or other lawful cause, absents himself from the premises of the employer or other place proper and appointed for the performance of his work;

d) an amount equal to the amount of any shortage of money arising through the negligence or dishonesty of the employee whose contract of service provides specifically or his being entrusted with the receipt, custody and payment of money;

e) any amount paid to the employee in error as wages in excess of the amount of wages due to him;

f) any amount the deduction of which is authorised by any written law for the time being in force, collective agreement, wage determination, or arbitration award;

g) any amount in which the employer has no direct or indirect beneficial interest, and which the employee has requested the employer in writing to deduct from his wages; and

h) an amount due and payable by the employee under and in accordance with the terms of an agreement in writing, by way of repayment or part repayment of a loan of money made to him by the employer, not exceeding 50% of the wages payable to that employee after the deduction of all such other amounts as may be due from him under this section.

If Oppo seeks to rely on c) above, it should ensure that the total deductions made in any given month, do not exceed a full day’s wages. It will be interesting to see if this Policy or similar policies are challenged in the future and if the outcomes are different.

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