In Kenya, the employment relationship between employers and employees is governed by labor laws designed to protect workers’ rights and ensure fair treatment in the workplace. One of the most critical areas in employment law is the termination of employment, which must be done fairly and within the confines of the law to avoid disputes and costly litigation.
In this blog, we will explore the rights of employees under Kenyan law, the legal grounds for terminating employment, and the steps employers should take to ensure fair dismissals.
1. Understanding Employment Rights in Kenya
Kenya’s labor laws are primarily outlined in the Employment Act, 2007, which provides comprehensive guidelines on employee rights, contracts, working conditions, and termination. The Act aims to create a balanced working environment that respects the rights of both employers and employees. Some key employment rights include:
- Right to Fair Remuneration: Employees are entitled to fair wages and benefits, which must be paid in a timely manner as agreed in their employment contract.
- Right to a Written Contract: All employees must be provided with a written contract of employment. This contract should specify key terms such as salary, working hours, job description, and termination procedures.
- Right to Leave: Employees are entitled to annual leave, sick leave, maternity/paternity leave, and public holidays as per the Employment Act.
- Right to Safe Working Conditions: Employers must provide a safe and healthy working environment and comply with occupational health and safety regulations.
- Protection Against Unfair Dismissal: Employees cannot be dismissed arbitrarily. The law requires that dismissals must be based on valid reasons and follow a fair procedure.
2. Legal Grounds for Termination of Employment
While employers have the right to terminate employment, Kenyan law strictly regulates the process to protect employees from unfair dismissals. According to the Employment Act, there are three main legal grounds for terminating employment:
a) Termination by Mutual Agreement: This occurs when both the employer and the employee agree to end the employment relationship. It may be part of a negotiated settlement, early retirement, or a voluntary resignation.
b) Termination with Notice: An employer may terminate employment by giving the employee the required notice, as stated in the employment contract. If no notice period is specified, the law provides a minimum notice period of 28 days for employees on a monthly salary and seven days for those on a weekly wage.
c) Summary Dismissal: This is immediate termination without notice, usually due to gross misconduct. However, summary dismissal must be based on valid and fair grounds, as outlined in the Employment Act, to avoid being deemed unlawful.
3. Grounds for Summary Dismissal
Summary dismissal is the most severe form of termination and should only be used in cases where the employee’s conduct warrants immediate action. The Employment Act provides a list of reasons that may justify summary dismissal, including:
- Gross misconduct (e.g., theft, assault, or fraud).
- Willful neglect of duty or poor performance.
- Being under the influence of alcohol or drugs at work.
- Insubordination or refusal to follow lawful instructions.
- Absenting oneself from work without a valid reason.
Employers must have concrete evidence to support summary dismissal. Failure to follow the proper procedure or dismissing an employee for reasons that do not meet the threshold can result in claims of unfair dismissal.
4. The Fair Termination Process: A Step-by-Step Guide
To ensure that an employee’s dismissal is fair and lawful, employers must follow a procedure that is consistent with the Employment Act and good industrial practices. Here’s a step-by-step guide to ensure fairness in the termination process:
a) Provide Valid Reasons
Before terminating an employee, the employer must provide valid and fair reasons for the dismissal. The reasons must be based on either misconduct, poor performance, incapacity, or operational needs of the business (such as redundancy).
Employers must provide evidence to support their claims, such as performance reviews, records of misconduct, or financial reports in the case of redundancy.
b) Give Notice or Pay in Lieu of Notice
If an employer wishes to terminate the employment contract for reasons other than gross misconduct, they must provide notice as stipulated in the contract. If the employer opts to terminate the contract immediately, they must compensate the employee by paying salary in lieu of notice.
The notice period is usually outlined in the employment contract, but if it is not specified, the Employment Act prescribes a minimum notice period based on the employee’s pay cycle (e.g., monthly, weekly).
c) Conduct a Disciplinary Hearing
Before dismissing an employee for misconduct or poor performance, the employer must conduct a disciplinary hearing. The employee must be informed of the accusations against them in writing and given an opportunity to defend themselves.
The hearing should be fair, and the employee has the right to be accompanied by a colleague or a trade union representative. After hearing both sides, the employer must make an informed decision on whether to proceed with the dismissal.
d) Issue a Termination Letter
Once the employer has decided to terminate the employment, they must issue a written termination letter outlining the reasons for the dismissal, the effective date, and any entitlements such as severance pay, notice pay, or accrued leave. This ensures transparency and provides the employee with a clear record of the termination.
5. Redundancy and Termination
In cases where an employer terminates employment due to redundancy (i.e., the position is no longer needed), the process is governed by specific rules. Redundancy must be justified by the operational needs of the business, and the employer is required to:
- Notify the employee and the labor officer of the impending redundancy at least 30 days in advance.
- Follow a fair selection process to determine which employees will be laid off.
- Pay severance pay, which is at least 15 days’ salary for each year of service.
- Provide notice or payment in lieu of notice, and pay any other due entitlements.
Failure to follow these procedures can lead to claims of unfair dismissal.
6. Remedies for Unfair Dismissal
If an employee believes they were unfairly dismissed, they have the right to file a complaint with the Employment and Labour Relations Court. The court may order several remedies for unfair dismissal, including:
- Reinstatement: The employee is reinstated to their previous position without loss of benefits.
- Compensation: The court may order the employer to pay compensation, which can be up to 12 months’ salary.
- Payment of Due Entitlements: The employer may be ordered to pay any outstanding dues such as severance pay, accrued leave, and salary in lieu of notice.
7. Protecting Employer Interests: Avoiding Litigation
For employers, it’s essential to protect themselves from litigation by adhering to the legal procedures outlined in the Employment Act. Here are some tips for ensuring fair dismissals and avoiding costly legal disputes:
- Document Everything: Keep detailed records of the employee’s performance, any warnings issued, disciplinary actions taken, and reasons for dismissal. Documentation is key in defending against claims of unfair dismissal.
- Conduct Performance Reviews: Regular performance appraisals allow employees to understand their strengths and weaknesses. If dismissal is based on poor performance, a record of performance reviews will support the employer’s decision.
- Provide Training and Warnings: Before resorting to dismissal, provide the employee with training or counseling and issue written warnings if their performance or conduct does not improve.
- Consult Legal Experts: If in doubt, consult a legal expert or labor officer to ensure compliance with labor laws and avoid procedural mistakes.
Conclusion
In Kenya, the termination of employment must be handled carefully to ensure fairness and compliance with the law. Both employers and employees have rights that must be respected throughout the dismissal process. By understanding employment rights, adhering to legal procedures, and following best practices, employers can ensure fair dismissals while protecting their businesses from legal challenges.
At the same time, employees are encouraged to know their rights and seek legal redress if they believe they have been unfairly dismissed.