Kenyan labor laws on termination of employment: What they say

Today we shall look at the main provisions of the Kenyan labor laws on termination of employment.

First, the Kenya employment act is very specific when it comes to termination of employment by either the employer or the employee.

And it’s because it wants the separation process to be fair to both parties.

Indeed, the act covers everything from temporary termination to summary dismissal.

Take a look..

Kenyan labor laws on termination of employment: what the law says

The procedure for termination of employment in Kenya starts with either party serving an employment termination.


What is a Termination notice

Under the Kenyan labor laws on termination of employment, this is simply a letter notifying an employee/employer of the intention to end the employment contract.

People often refer to it as the termination letter since it’s supposed to be in writing.

Bear in mind the following:

  • Where the employment contract required the payment of wages daily, the termination notice shall be served by either side at the end of any day without notice.
  • Where the employment contract specified that the wages be paid periodically (within less than a month), like weekly or bi-weekly, the termination notice shall be given one week or two-weeks before.
  • Where the employment contract required wages to be paid monthly like it often happens, the termination notice shall be supplied twenty-eight days before the next pay day.
  • Lastly, where the employment contract has different provisions, the two parties shall have agreed on the appropriate notice period.

Importantly, the agreeable duration shall be the same for both parties.

Also note that it’s the duty of the employer to ensure that the employee understands the served notice in the event that the employee fails to comprehend the termination letter.

In fact, the termination of employment rules demands that the employer orally explains the letter to the employee in a language he/she understands.

Let’s now look at what happens if no notice is issued…


Payment in lieu of notice in Kenya

Either party may terminate the employment contract without issuing notice but it comes at a cost…

The non-compliant party must pay the other party an amount equivalent to what they would have earned in the course of the notice period.

To put it simply, the employer shall compensate the abruptly terminated employee with wages they could have accrued if they were to work for the notice period.

The employee is similarly to pay his/her employer for abandoning work without due notice.


Waiver of termination notice by employer

If an employee has given notice of employment termination but their employer waives a part or the whole of the notice, he (the employer) shall remunerate the employee equivalently for the waived days.

This can, however, be set aside where there is an agreement for such a waiver between the two parties.


Types of termination of employment under the Kenyan labor laws on termination of employment

There are several grounds that an employment can be terminated in Kenya.

These include:


1. Termination caused by redundancy

Employees are occasionally laid off to cut payroll costs mostly during tough economic times or as a result of inventions that disrupt work, for instance, digitization of services.

Ordinarily, the employees are given clear terms as set under the prevailing policies which provides for payment in lieu of notice (where applicable) and compensation for any unused leave days.

The agreement also specifies the applicable severance pay.


2. Termination on account of business insolvency

Employees are also laid off automatically if the business becomes insolvent.

In most cases, the two parties strike an accord on the procedure to follow during the termination to avoid inconveniencies such as litigation and payment of pending dues.


3. Termination on grounds of misconduct

Subject to employment act section 42(1), the employer can halt the employment of a staff on the basis of misconduct.

Misconduct is taken to be any action by the employee that’s detrimental to the business or reputation of an employer.

The employer is however obligated to listen to any representations by the employee about their poor performance prior to acting.


4. Termination on grounds of incapacity

Besides misconduct and poor performance, continued incapacitation caused by ill-health or an injury might be considered sufficient grounds for cancelling an employment contract.

The employer is supposed to be fair and where possible, to try to adapt the working circumstances of the affected employee instead of termination.

But that largely depends on the employer and the nature of work.

Kenyan labor laws on termination of employment

Summary dismissal in Kenya: What does the Kenyan labor laws on termination of employment say?

In case of a serious misdemeanor, the employer has the leeway to summarily dismiss an employee without any notice or without giving adequate notice as provided in the law.

This can occur if the employee has by his admission accepted that he has seriously breached his/her obligations under the employment contract.

Here are some of the grounds under which a summary dismissal is warranted:

  • An employee has absented himself/herself from work without leave or alternative lawful causes.
  • The employee renders him/herself incapable to work properly by becoming intoxicated.
  • An employee intentionally neglects to perform assigned work or carelessly and improperly undertakes any duty specified under his contract.
  • An employee uses insulting or abusive language or behaves in an insulting manner to his/her employer or supervisor.
  • An employee knowingly refuses or fails to observe lawful and proper commands as issued by the employer or their appointed agent yet they are within their job scope.
  • An employee is lawfully arrested for a cognizable felony punishable by imprisonment and is subsequently not released within fourteen days on bond or bail.
  • An employee has committed or is reasonably suspected of committing a crime that harms the employer or their property.


Remedies for unfair dismissal in Kenya

An employer cannot wake up one morning and summarily fire an employee in the absence of justifiable grounds.

For example, an employee shall not be dismissed because of joining a labour union, proceeding on leave, participating in lawful strikes, filing a complaint etc.

An employer who does this is guilty of unfair termination and he/she suffer the consequences including possible prosecution in the industrial court.

Employees have the following remedies if they suffer unfair termination of employment in Kenya.

  • Reinstatement to work.
  • Payment of full pay and accrued benefits.
  • Compensation in form of damages.
  • Re-engagement of the employee in comparable work at the same pay.

Where to go in case of unfair dismissal in Kenya

The aggrieved employee should file their complaint at the nearest labour office within 3 months of the unfair termination date.

The labour office doesn’t allow legal representation but allows the employee to bring a trade union representative along.


Termination of probationary employment contracts

Any party to a probationary employment contract may terminate service by issuing at least a seven days’ notice of the intended termination or by paying a seven days’ salary in lieu of the notice.

Terminations done during the probation period for whatever reasons aren’t considered unfair whatsoever.


As you have seen, the Kenyan labor laws on termination of employment are quite elaborate.

Perhaps the most crucial bit to put in mind is that either party must follow the due process during the termination especially issuing a termination notice.

Also, remember that an employer will be guilty of unlawful termination if he/she summarily dismisses an employee on frivolous grounds.


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