The Federation of Kenya Employers (FKE) has condemned a proposal by the Central Organisation of Trade Unons (COTU) to increase the general wage by 15 percent.
The hard stance comes as Kenyans across the country mark Labour Day celebrations with lots of expectations from President Uhuru Kenyatta.
COTU had indicated that the wage increase would support the 1.5 percent housing levy proposed by the government, a move that would see Kenyans subscribe to the Affordable Housing Scheme under the Big 4 Agenda.
The union’s Secretary General Francis Atwoli said the government will overburden employees with the housing levy, arguing that increase in wages is the only way to ensure the housing levy is implemented.
However, FKE Chairman Mark Obuya has opposed the proposal saying it is not the government’s mandate to increase salaries of private entity employees.
Obuya noted that FKE has appending case in court, accusing the government of failing to involve the employers body before coming up with the housing levy.
“General wage increases have a knock effect on the cost of doing business and the competitiveness of enterprises. Factors of wage determination such as productivity and ability of employers to pay must be taken into account. The proposal by COTU is therefore ill-advised,”stated FKE in a statement on Tuesday.
The housing levy has faced several hurdles with the recent one being the Labour Court’s move to suspend the 1.5 percent levy which was expected to begin in May.
A notice in the local dailies had indicated that employers were to deduct and remit the levy by 9th of every month.
The court said that the tax will stay on hold until the matter is heard on May 20 in a case filed by the Consumers Federation of Kenya (COFEK).
COFEK argued that the levy is not a priority as the country has more pressing matters including drought, rising cost of living and health challenges to deal with.