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Employers oppose paying NHIF contributions for staff

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Employers oppose paying NHIF contributions for staff


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NHIF Building in Upper Hill, Nairobi. FILE PHOTO | NMG

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Summary

  • Kenyan employers have rejected proposals in a Bill that require them to match workers’ monthly contributions to the National Hospital Insurance Fund (NHIF).
  • Doubling the Sh1,700 that top contributors make to the fund ranks high on the list of targeted changes to the NHIF Act.

Kenyan employers have rejected proposals in a Bill that require them to match workers’ monthly contributions to the National Hospital Insurance Fund (NHIF).

The Federation of Kenya Employers (FKE) warned compelling employers to match the contributions to the public health insurer would destroy private medical insurance and force firms to deepen job cuts.

Doubling the Sh1,700 that top contributors make to the fund ranks high on the list of targeted changes to the NHIF Act, which will be introduced to Parliament on Wednesday morning.

The plan is to have the workers continue paying same amounts and employers matching in a structure modelled on the National Social Security Fund (NSSF).

This will see employers pay at least Sh25 billion to the NHIF, an added burden to firms that are yet to recover from coronavirus-induced slump, which triggered job cuts, hiring freezes and business closures.

“This will not only affect the wage bill and sustainability of enterprises but also destroy the capacity of enterprises to create new jobs and sustain the existing jobs,” Jacqueline Mugo, the FKE chief executive, told Parliament.

In a memorandum to the National Assembly committee on Health, Ms Mugo said the proposals contained in the NHIF (Amendment) Bill, 2021 overlook the fact that some employers provide medical insurance for their staff

The NHIF had 8.898 million members at end of June 2020, with 4.452 million drawn from the formal sector and 4.546 million from the informal segment.

Formal workers contributed Sh24.89 billion to the NHIF in the financial year ended June 2017, the latest available detailed financial statement shows, a pointer that employers will pay at least Sh25 billion.

This has the potential of making the NHIF the richest State-backed firm with annual collections of close to Sh100 billion given its receipts of Sh60 billion in the year to June. It paid out Sh54.3 billion to hospitals as members’ claims.

Yesterday, Ms Mugo told the Health committee most employers in Kenya operate private medical insurance schemes for their employees.

“Making it mandatory for the employers to match their employees’ contribution will mean that they are paying double for the health insurance. This will not only lead to unnecessary increase in the cost of labour in Kenya, but it will also destroy the private health insurance industry and the competitiveness of Kenya’s business operating environment,” she said in the memorandum.

Employers who remit the money late or beyond the 9th of each month will be liable to a penalty of 25 percent of the outstanding contribution and also foot all medical bills for workers who fall sick within the default period.

Individual contributors who fail to pay their premiums by the 9th of every month pay a 50 percent penalty.

“Employer shall be liable to pay the penalty prescribed in subsection (I) and pay the costs incurred by the employee when seeking treatment from a contracted health care provider during the period when the contribution is due,” says the government-backed Bill.

The proposal comes barely six years after the NHIF raised workers’ contributions from Sh320 to a graduated scale of between Sh500 and Sh1,700 per month based on monthly pay.

Ms Mugo told a virtual public participation forum on the Bill that all employers will be saddled with the cost of matching their employees’ contributions.

The employers also rejected a section of the Bill that requires the NHIF to only pay hospital bills after patients who have private covers exhaust the limit from private insurers.

The proposal in the Bill is a shift from the current practice where the NHIF makes the first payment — usually a small portion of the total bill — leaving the rest to private insurers.



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KQ resumes Mumbai flights after 4 months

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KQ resumes Mumbai flights after 4 months


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A Kenya Airways aircraft at JKIA. FILE PHOTO | NMG

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Summary

  • Kenya Airways will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
  • The airline in a notice to its customers yesterday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.

Kenya Airways #ticker:KQ will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.

The airline in a notice to its customers Monday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.

The airline will then resume full operations on the route on September 20, flying three times per week on the Indian route, which is one of the most lucrative destinations on its network.

Passengers on the route will part with Sh46,000 ($419) for one-way air ticket on economy class seats from Nairobi to Mumbai- prices that are relatively the same compared to what it was charging before the Covid-19 pandemic.

“Welcome back onboard! Fly from Nairobi to Mumbai starting Thursday 16th September with normal schedules resuming from Monday 20th September 2021,” said the airline in a notice to its customers yesterday.

KQ Suspended passenger flights to and from Mumbai on April 30 until further notice, following a government directive on travel between India and Kenya due to a Covid-19 crisis in that country.

The airline said on Friday that passengers who had booked tickets after May 1, the date of the last flight from Mumbai to Nairobi, will have to change their plans.

Affected passengers, KQ said, could also take vouchers for the value of their fare for future travel within 12 months.

India has seen soaring infection rates in the recent days, since the discovery of a new virus variant. Last month, India put on lockdown one of the states following a spike in cases of Covid-19.

Other countries that have banned flights to India include France, the UK Bangladesh, Oman and Hong Kong that have banned travel to and from India or asked their nationals coming from the Asian country to isolate themselves in government-approved hotels.

India has so far detected 33,264,175 corona virus cases with the number of deaths hitting 442,874 as at September 13.

A large number of patients from Kenya also travel to India every year for specialised medical treatment, especially cancer care, helping to drive medical tourism in the densely populated country that boasts affordable and easily accessible healthcare.



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Lower import volumes push mitumba prices to new highs

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Lower import volumes push mitumba prices to new highs


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Man pulls a cart loaded with second-hand clothes at Gikomba Market in Nairobi. FILE PHOTO | NMG

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Summary

  • Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
  • Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
  • Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.

The average price of a tonne of second-hand clothing items imported into the country crossed the Sh100,000 mark for the first time last year on reduced volumes in the wake of safety protocols and guidelines to curb spread of coronavirus.

Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.

Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.

Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.

Last year’s drop was the first dip since 2011 when 76,533 tonnes were shipped in compared with 80,423 tonnes the previous year, the official data collated by the Kenya National Bureau of Statistics (KNBS) shows.

The import bill for the merchandise amounted to Sh12.24 billion, a drop of 31.11 percent, or Sh5.53 billion, year-on-year.

TIn imposing the temporary ban on used clothes, Kebs had applied a standard which prohibits buying second-hand clothes from countries experiencing epidemics to ensure disease-causing microorganisms are not imported into Kenya.

Higher quality and relatively lower prices for mitumba has continued to drive demand for used clothes at expense of locally-made products amid higher margins enjoyed by traders largely operating in informal markets.

The lucrative second-hand clothing market has seen traders from China —a key source market for the merchandise —open shops in Gikomba, Kenya’s largest informal market for mitumba, in recent years to cash in rising demand.

Earnings from exports of articles of apparel and clothing accessories fell 5.32 percent to Sh32.92 billion last year compared with 2019, data indicates.



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Court backs Atwoli union in horticulture membership feud

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Court backs Atwoli union in horticulture membership feud


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Cotu boss Francis Atwoli. FILE PHOTO | NMG

Summary

  • A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
  • Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.

A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.

Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.

Mr Atwoli is the secretary-general of KPAWU. The rival union claimed KPAWU had encroached on its area of workers’ representation.

Justice James Rika, however, dismissed the claim and ruled that the dispute should have been taken through conciliation, and was therefore presented in court prematurely.

He also stated that Kefhau must go beyond its registration and recruit sufficient members from the employers, to be granted recognition and organisational rights.

“Registration on its own, does not afford the claimant (Kefhau) recognition. Until there is proof that Kefhau has satisfied Section 54 of the Labour Relations Act, the status quo must be maintained,” said the judge.

“Kefhau must recruit at least 50 percent plus one, of the unionisable employees in the floriculture and horticulture industry, members of the Agricultural Employers Association to be considered for recognition,” he stated.

He noted that there is a Recognition Agreement and CBA, binding Mr Atwoli’s union and Agricultural Employers Association, affecting 73 Flower Growers Group of employers, and over 60,000 employees.

“It is objectionable for Kefhau to be allowed organisational rights, and the legitimacy to receive trade union dues and agency fees, from over 60,000 employees, just on the strength of registration as a trade union,” said the judge.

Kefhau wanted the court to declare that it is the sole trade union, which is allowed by its constitution to carry out activities in the export floriculture and vegetable industry, and an order restraining Mr Atwoli’s from representing workers in that area.



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