Kenya’s parliament has introduced the Business Law (Amendment) Bill 2024 to address concerns about the working conditions in the country’s growing Business Process Outsourcing (BPO) and IT-Enabled Services (ITES) sectors. The proposed law seeks to curb worker exploitation and align local labour standards with global norms, but it raises concerns about its potential impact on Kenya’s competitiveness as an outsourcing hub.
Key Provisions of the Bill
- Employer Responsibility:
BPO and ITES employers must provide employees with all necessary tools to perform their duties, regardless of ownership. - Accountability for Claims:
The bill bars companies from denying accountability by claiming they are not the direct beneficiaries of employees’ services. Employers will be liable for any claims related to service contracts. - Worker Protections:
The amendments follow a September 2024 court ruling allowing BPO firms to be sued locally, granting Kenyan workers legal recourse against international firms operating in the country.
Background and Context
The legislative push follows allegations of exploitative practices by Sama, a former Meta contractor. Ex-employees claimed they were underpaid—earning $2 per hour compared to the $12 suggested by business partners—and lacked safeguards against the psychological toll of moderating harmful online content.
Sama exited the content moderation business in 2023, shifting its focus to AI labeling for clients like Microsoft, Google, and Walmart. However, it faces ongoing lawsuits from over 180 former employees alleging unfair dismissal and inadequate protection from workplace trauma.
Implications for the Industry
While the proposed law aims to enhance worker rights, it introduces operational risks that may deter outsourcing giants.
- Increased Compliance Costs: The requirement to provide tools and liability for service-related claims could raise operational costs for BPO firms.
- Global Competitiveness: Kenya, a rising outsourcing hub employing over 3,000 workers through firms like Sama and Majorel, may lose its appeal to global firms wary of regulatory rigidity.
Legal and Ethical Considerations
The bill aligns with ongoing scrutiny of tech giants. Meta is embroiled in multiple lawsuits, including claims of an algorithm allegedly fueling ethnic violence in Ethiopia and demands for a $1.6 billion victim fund.
“Balancing worker rights with business competitiveness is critical,” a legal expert told TechCabal. Without careful implementation, the new regulations could inadvertently stifle growth in Kenya’s outsourcing sector.
Looking Ahead
Kenya’s proposed regulations reflect a broader global trend toward holding companies accountable for labour practices. However, achieving a balance that safeguards workers while fostering a competitive business environment will be crucial as the bill moves toward implementation.