Learn the redundancy process in Kenya with this comprehensive guide for companies, covering legal steps, employee rights, and best practices for smooth transitions.
Our Litigation and Dispute Resolution Team at F.M Muteti & Company Advocates closely monitors the labour law and employment space both locally and internationally. We are ardent in identifying specific areas of law which have potency to contribute to the sustainability, growth and development of our Clients’ businesses and organizations. One such area is compliance with labour and employment laws and regulations and specifically, legally sound redundancy process in Kenya.
The Employment Act, 2007 defines redundancy as “the loss of employment, occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous and the practices commonly known as abolition of office, job or occupation and loss of employment.
In simpler terms, the law allows an employer to terminate the employment of an employee (s) even in circumstances where the employee (s) has not breached either the work place policy or the contract of employment but for the organization’s own internal and external dynamics.
Various factors such as business relocation and/or closure, financial difficulties, mergers and acquisitions, technological advancements and skill obsoleteness may push an employer to consider declaring an employee (s) redundant.
What is the Mandatory Redundancy Process in Kenya?
However, before eventually terminating employment on account of redundancy, an employer is required to comply with the following MANDATORY redundancy process in Kenya and considerations.
- Where the employee is a member of a Trade Union
If the employee under consideration for redundancy is a member of a Trade Union, the employer is required to notify the union to which the employee is a member and the labour officer in charge of the area where the employee is employed of the reasons for and the extent of the intended redundancy not less than one (1) month prior to the date of the intended date of termination on account of redundancy.
2. Where the employee is not a member of a Trade Union
In this case, the employer is obligated to notify the employee (s) personally in writing regarding the decision to terminate the employee (s) on account of redundancy. The employer is also required to notify the labour officer in charge of the area where the employee is employed.
3. Appraisal and performance review
For the process of termination of employment on account of redundancy to be deemed fair and reasonable, the employer is required to demonstrate that before reaching the decision to terminate an employee for being redundant, he had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy.
4. Where there is a Collective Bargaining Agreement
If there is a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy, the employer must demonstrate that he has not placed the employee at a disadvantage for being or not being a member of the trade union.
- Payment of all terminal dues
Having complied with the above procedures, the employer is then finally required to pay the following to the employee being considered for redundancy:-
- Leave pay to be paid in cash;
- One month’s wages in lieu of notice; and
- Severance pay at the rate of not less than fifteen (15) days’ pay for each completed year of service.
We have a fully-fledged Employment & Labour Relations Department in which we handle labour disputes on behalf of corporate and individual Clients. We are committed to render comprehensive and impactful services to our Clients including Legal Opinions on compliance with labour laws, drafting codes of conduct and work place policy, offering training on employment law, negotiating labour disputes and representing our Clients in Court. Contact us today to schedule a consultation and learn how we can support you, your company, business or organization in matters Labour Law and Employment.
Disclaimer: The information provided in this article is provided for information purposes only and does not constitute a legal advisory. We advise prospective Clients to get in touch with us for more comprehensive and contextualized legal advice.
