An investigation of the effect of labour law concessions on stakeholders in Kenyan Garment export processing Zones
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Date
2004
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Abstract
At the moment Kenya is experiencing high unemployment rates, over-reliance on unprocessed commodity exports, few foreign direct investment inflows and low technological capacities. The establishment of Export Processing Zones (EPZs) has been seen as a way of helping the country overcome some of these challenges. However, the incentives that have accompanied the EPZ scheme, particularly the ceding of labour legislation by the Kenya government to EPZ investors, has created EPZ employer-employee labour relations hostilities (a labour relations gap).
The purpose of this study was to establish the state of employer-employee labour relations in Kenyan garment EPZs. This was done by establishing the factors that influence the perceptions of EPZ workers towards the state of their working conditions. This study further explored the effect of labour law exemptions on EPZ investors, their employees and the Export Processing Zones Authority (EPZA). It further explored the effectiveness of existing communication and dispute settlement structures in the EPZ workplace.
The survey method was largely used to collect both qualitative and quantitative data. The respondents of the survey included EPZ employers, their employees and the EPZA. Three sets of questionnaires were used to collect data. One questionnaire was distributed to EPZ employers; the second to EPZ employees and the third was distributed to the EPZA. The collected data was then analyzed using the Statistical Package for the Social Sciences (SPSS) program.
The study found that the factors that significantly affected Kenyan EPZ employers and their employees* attitudes towards the state of their working conditions were*, age, gender, marital status, employment status, work section, leadership position in a company, salary scale and the location of an EPZ company in a public or private zone.
The study also found that employment discrimination and the state of the working relationships in Kenyan garment EPZs had big employer-employee labour relations* gaps. Besides, the working facilities in Kenyan EPZs were relatively of high quality. The EPZ employer-employee training gap was found not to be large, while the employer-employee remuneration and interpersonal relationship gaps were found to be slightly above the acceptable levels.
In addition, the study also found that employee strikes and negative publicity were the main problems EPZ investors encountered for being exempted from the minimum wage act and the factories act. Unions, politicians and Non-governmental Organizations (NGOs) were the major groups/organizations that censured EPZ operators for being exempted from labour laws. The closer EPZ investors are located to each other, the more they influenced each other's employer-employee labour relations.
The findings of the study also revealed that EPZ employees found unions, the EPZA and codes of conduct as ineffective employer-employee regulatory instruments, although some employers found these three regulatory instruments to be effective. Apart from the existing EPZ employer-employee regulatory structures the three groups also consulted the ministry of labour, when they found it difficult to resolve employer-employee working conditions' related problems amongst themselves in the zones.
Furthermore, the findings established that the majority of employee-employer communication in the zones revolves around wages. The majority of the EPZ employees channelled their working conditions' grievances to their employers via workers committees and strikes/go slows, while the majority of employers use workers committees and open meetings to address their workers. Regarding the effectiveness of their communication channels, the majority of the sampled employees indicated that their communication channels were effective. This is a view that their employers also concurred with.
Finally, the study found that the three groups (employers, their employees and the EPZA) suggested that the use of general alternative EPZ employer-employee regulatory instruments (the government, NGOs, unions and institutions of higher learning), trade instruments (preferential trade agreements and codes of conduct) and other instruments (existing laws, arbitration and unions) could ensure that EPZ working conditions improved.
The majority of workers indicated that their employer-employee working relationships could be improved with a better EPZ employment structure; improvement of employer-employee communication structures. Employees also felt that educating them on their labour rights, on the roles unions play, along with more EPZA support and better remuneration structures were required as basic working conditions that would be deemed satisfactory to them.
To minimize employer-employee hostilities (reduce the employer-employee labour relations gap) the study has recommended that EPZ employers, their employees and the EPZA adopt a compliance measuring instrument, to constantly evaluate their labour relations gaps, adopt a step by step dispute resolution approach/system to solve their working conditions' problems and a higher productivity code of conduct.
Description
A thesis submitted to the Department of Business Management for the Degree of Doctor of Commerce and Business Management, in the Faculty of Commerce and Administration at the University of Zululand, 2004.
Keywords
Industrial relations, Labour law concessions