Legal Framework for Employment Termination in Kenya
Employment termination in Kenya is governed primarily by the Employment Act, 2007 (Act No. 11 of 2007) and the Labour Relations Act, 2007 (Act No. 14 of 2007). These laws establish comprehensive procedures for dismissal, notice requirements, and severance compensation to protect both employers and employees in the termination process.
The Employment and Labour Relations Court, established under the Employment and Labour Relations Court Act, 2011, has exclusive jurisdiction over employment disputes, including wrongful termination cases.
Types of Employment Termination
Lawful Termination Categories
- Termination by notice: Either party may terminate employment by giving appropriate notice
- Summary dismissal: Immediate termination for gross misconduct
- Constructive dismissal: Employee resignation due to employer's fundamental breach
- Redundancy: Termination due to operational requirements
- Mutual agreement: Both parties agree to end the employment relationship
- End of fixed-term contract: Natural expiration of contract period
Notice Periods and Requirements
Statutory Notice Periods
Under Section 35 of the Employment Act, 2007, minimum notice periods are:
- Daily paid employees: 24 hours notice
- Weekly paid employees: 7 days notice
- Monthly paid employees: 28 days notice
- Employees with over 5 years service: Additional notice may be required as per contract
Notice in Writing
All termination notices must be in writing and clearly state:
- The effective date of termination
- Reasons for termination (except for notice termination)
- Employee's right to appeal or seek redress
- Details of final payments and benefits
Payment in Lieu of Notice
Employers may pay salary equivalent to the notice period instead of requiring the employee to work during the notice period. This payment should include all benefits and allowances the employee would have received during the notice period.
Dismissal Procedures
Fair Dismissal Process
For dismissals based on misconduct or poor performance, employers must follow due process:
- Investigation: Conduct thorough investigation of allegations
- Charges: Present written charges to the employee
- Response opportunity: Allow employee to respond to charges
- Disciplinary hearing: Conduct fair hearing with employee representation allowed
- Decision: Make decision based on evidence presented
- Appeal opportunity: Provide internal appeal mechanism
Summary Dismissal
Summary dismissal without notice is permitted only for gross misconduct, including:
- Theft or fraud
- Violence or threats in the workplace
- Serious breach of confidentiality
- Willful disobedience of lawful orders
- Conviction of criminal offense affecting employment
Severance Pay and Compensation
Statutory Severance Pay
Under Section 40 of the Employment Act, 2007, employees are entitled to severance pay when employment is terminated for reasons other than:
- Summary dismissal for gross misconduct
- Resignation by employee
- End of fixed-term contract
Severance Pay Calculation
Severance pay is calculated as follows:
- 15 days pay for each completed year of service for the first 10 years
- 20 days pay for each completed year of service exceeding 10 years
- Minimum payment: 15 days regardless of length of service
- Based on gross monthly salary at time of termination
Additional Payments Due
Upon termination, employees are entitled to:
- Outstanding salary: All unpaid wages up to termination date
- Accrued leave pay: Payment for unused annual leave days
- Pro-rated 13th month: If applicable under employment contract
- Bonus payments: Pro-rated bonuses as per contract terms
- Repatriation costs: If employee was recruited from outside Kenya
Redundancy Procedures
Redundancy Definition and Process
Redundancy occurs when employment termination results from operational requirements of the business. Employers must:
- Provide 30 days advance notice to affected employees
- Consult with employee representatives or trade unions
- Consider alternatives to redundancy
- Use fair selection criteria if choosing specific employees
- Pay redundancy compensation
Redundancy Compensation
Redundancy pay is calculated at:
- 15 days pay for each completed year of service
- Based on gross monthly salary
- Minimum payment equivalent to one month's salary
- Additional benefits as per employment contract
Appeal Rights and Dispute Resolution
Internal Appeals
Employers should establish internal grievance and appeal procedures allowing employees to:
- Challenge dismissal decisions within reasonable timeframe
- Present their case to impartial panel
- Have representation during appeal process
- Receive written decision with reasons
External Dispute Resolution
Employees may seek redress through:
- Labour Officer mediation: Free mediation services through Ministry of Labour
- Employment and Labour Relations Court: Filing case within 60 days of termination
- Trade union assistance: If employee is union member
Remedies for Unfair Dismissal
Courts may order:
- Reinstatement: Return to employment with back pay
- Compensation: Payment in lieu of reinstatement (typically 12 months salary)
- Additional damages: For procedural violations or discrimination
Special Considerations
Protected Categories
Special protection applies to:
- Pregnant employees: Cannot be dismissed due to pregnancy
- Employees on sick leave: Protection during medical treatment
- Trade union officials: Additional procedural requirements
- Employees on maternity/paternity leave: Job protection guaranteed
Certificate of Service
Employers must provide terminated employees with a certificate of service within 14 days, containing:
- Employee's name and identification details
- Period of employment
- Position held and duties performed
- Reason for termination (if requested by employee)
Compliance and Best Practices
Employers should maintain comprehensive employment records, follow consistent disciplinary procedures, and ensure all termination payments are made within 7 days of termination date. Regular review of employment policies and procedures helps ensure compliance with current labor law requirements.
Note: Specific collective bargaining agreements may provide enhanced benefits beyond statutory minimums. Professional legal advice should be sought for complex termination cases.