REDUNDANCY PROCEDURE IN KENYA

Redundancy is one of the ways of terminating the contract of service. The Kenyan Employment Act defines redundancy to mean 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. However, even though the employer has the sole prerogative to reorganize their business, the same power is not exercised in a vacuum but must accord with the certain statutory prerequisites. According to section 40 of the Employment Act 2007, when an employer contemplates redundancy, he/she should:

1. Give a general notice of the intention to the employees likely to be affected. This notice should contain the reasons for and the extent of the intended redundancy.
2. Selection criteria: the selection of persons eligible for redundancy must be based on seniority in time and skill. The court is required to balance the same with other considerations such as ability, skill and reliability.
3. Compensation in lieu of notice.  An employer is not to terminate a contract of service on account of redundancy, unless the employer has paid an employee declared redundant not less than one month’s notice or one month’s wages in lieu of notice.

In sum, where an employee seeks to terminate a contract of service on account of redundancy, the employer must:

1. Give a general notice to all employees of the impending termination of employment on account of redundancy.
2. Consult with the employees targeted for redundancy
3. Select the employees to be targeted for redundancy taking into consideration skill, ability and seniority. This criteria should be applied uniformly to all employees.
4. Give a 30 day notice in writing to the employees targeted for redundancy and the labour office stating and reasons for the intended redundancy. For employees who are members of a trade union, the notice should be directed at the union.
5. Pay the employees declared redundant one month’s wages where the notice intention is less than a month
6. Pay all pending leave days in cash to the employees declared redundant. For the avoidance of doubt, the employee is entitled to a severance pay of not less than 15 days pay for each year of completed year service.

At Obore and Company Advocates, we understand that navigating the process of redundancy is often complex and therefore have a team dedicated to your employment needs. If you would like to consult further on this article, please contact us:

Email: admin@obore-advocates.com

Call: +254706 300514/ +254753 661713

Termination of the contract of employment is usually a pivotal moment for the employee because other than its economic value, work is dignifying. At the same time, the employer, in the interest of advancing his/her business has the right to restructure the same, even when such a measure results in the termination of the contract of service. In this sense, the law comes in to balance these two interests by ensuring that while the employer retains this right, the same is not exercised arbitrarily or capriciously.