Kenya proposes law to hold outsourcing firms accountable amid worker complaints
NAIROBI, KENYA — Kenya’s parliament recently introduced the Business Law (Amendment) Bill 2024, a proposed regulation targeting business process outsourcing (BPO) and IT-enabled service (ITES) companies.
The bill seeks to hold these firms accountable for employee grievances following increased scrutiny of labor conditions in the outsourcing sector, which has become a cornerstone of Kenya’s economy.
This legislative push follows a September 2024 court ruling that allowed BPO firms to be sued locally. The case stemmed from former employees of Sama, a content moderation company that worked with global clients such as Meta.
These workers alleged exploitative conditions, including being paid as little as $2 per hour — far below the $12 recommended by business partners — and inadequate protections when moderating harmful online content.
Key provisions: Employer accountability and worker protections
The proposed law mandates that employers provide all tools necessary for employees to perform their duties, regardless of ownership. It also prevents firms from evading liability by claiming they are not direct beneficiaries of the services provided.
“An employer who operates as a Business Process Outsourcing company or who is a provider of Information Technology Enabled Service shall be responsible for any claim raised by an employee in relation to the contract of service and shall not, in its defense to such claim, assert that it was not, in fact, the beneficiary of the services of the employee,” states part of the bill.
While the bill aims to align Kenya’s labor standards with global norms and curb exploitation, it has raised concerns among legal experts and industry stakeholders. Critics warn that rigid liability provisions could deter outsourcing giants from operating in Kenya due to increased compliance costs and operational risks.
Balancing worker rights with industry growth
The proposed legislation comes at a critical juncture for Kenya’s outsourcing industry, which employs thousands of workers through companies like Sama and Majorel. Sama recently exited content moderation services after legal battles with over 180 former employees who alleged unfair dismissal and psychological harm from their work. The company now focuses on AI labeling services for major tech firms such as Microsoft and Google.
Meta also faces mounting legal challenges, including a lawsuit alleging its algorithms fueled ethnic violence in Ethiopia. Petitioners are seeking $1.6 billion to establish a victim fund and ban harmful content recommendations.
Legal experts emphasize the importance of balancing worker protections with maintaining Kenya’s competitiveness in the global outsourcing market.
One expert told TechCabal that balancing worker rights with business competitiveness is critical and cautioned against unintended consequences that could stifle industry growth.
