Kenya’s parliament has introduced the Business Law (Amendment) Bill 2024, aimed at regulating business process outsourcing (BPO) and IT-enabled service (ITES) companies amidst increasing scrutiny over worker conditions.
This legislative move follows a September 2024 court ruling that permitted BPO firms to be sued within Kenya. The case stemmed from allegations by former Sama employees who claimed they moderated harmful content for clients, including Meta, under exploitative conditions and with insufficient safeguards. Reports revealed that some workers earned as little as $2 per hour, far below the $12 rate proposed by business partners.
The proposed bill mandates that employers provide all tools necessary for employees to perform their duties, irrespective of ownership. It also seeks to prevent firms from avoiding accountability by asserting they are not direct beneficiaries of the services rendered.
While the law could reduce worker exploitation and align Kenya’s labor practices with global standards, it has sparked concerns. A commercial lawyer noted that rigid liability provisions could deter outsourcing giants wary of heightened operational risks and compliance costs.
An employer operating as a Business Process Outsourcing company or as a provider of Information Technology Enabled Services shall be held accountable for any employee claims related to the service contract and cannot defend itself by asserting it was not the direct beneficiary of the employee’s services.
Sama, which previously offered content moderation services to Meta, exited the business after facing lawsuits from over 180 former employees. The plaintiffs alleged unfair dismissal and a lack of psychological support for the mental toll of moderating harmful online content. Sama has since pivoted to providing AI labeling services for companies like Microsoft, Google, and Walmart.
Meanwhile, Meta faces a separate lawsuit alleging that its algorithms contributed to ethnic violence in Ethiopia. Petitioners, represented by Mercy Mutemi of Nzili and Sumbi Advocates, are calling for a ban on harmful content recommendations and the establishment of a $1.6 billion victim fund.
Balancing worker protections with maintaining Kenya’s competitiveness in the global outsourcing market is vital, another legal expert emphasized. Without careful implementation, the bill risks undermining Kenya’s growing reputation in the outsourcing industry. Notably, firms like Sama and Majorel have collectively employed over 3,000 Kenyans.
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