The Kenya Employment Act, 2007 (Employment Act), was enacted to declare and define the fundamental rights of employees and to provide basic conditions of employment to employees among other things. Employment laws and regulations in Kenya, govern the termination and dismissal of employees to ensure fairness and protect the rights of both employers and employees.

Unfair termination and summary dismissal (dismissal) can have legal consequences for employers. The employer must ensure that the dismissal was both substantively and procedurally fair and proper. This means that the reason for dismissal/termination ought to be valid and the procedure followed to dismiss/terminate the employee was fair and proper. The reason for dismissal/termination could be considered fair if it is related to the employee’s conduct, capacity and/or compatibility or where it is based on the operational requirements of the employer.

This piece by the law firm, will focus on the dismissal and unfair termination of employees in Kenya and some legal principles governing it.

Basics to Consider when Dismissing/Terminating an Employee

At this point, it would be important to define Summary Dismissal as per the Employment Act. Section 44(1) of the Employment Act states that, “summary dismissal shall take place when an employer terminates the employment of an employee without notice or with less notice than that to which the employee is entitled by any statutory provision or contractual term”.

Employers are required to follow certain procedures and meet specific conditions when terminating or dismissing employees. Here are some key aspects to consider:

  • Fair grounds for Dismissal/Termination:

Dismissal/Termination of an employee should be based on fair and justifiable grounds.

  • Employment Contract

Employment contracts in Kenya can be either oral or written, but it is advisable to have a written contract that meets the basic criteria provided in the Employment Act. The contract should clearly outline, among others, job description, the period of employment, terms, and conditions of employment, including grounds for termination and notice periods.

  • Collective Bargaining Agreements (CBAs)

If there is a collective bargaining agreement in place, it may provide additional or modified provisions related to termination or dismissal that both the employer and employees must adhere to.

  • Notice Period

Employers are required to provide notice to terminate an employee’s contract or pay in lieu of notice. The length of the notice period may be specified in the employment contract or outlined in relevant labour laws in Kenya.

The notice period is based on the terms agreed in the employment contract. However, where there is no express agreement, section 35(1) of the Employment Act, provides that notice shall be issued:

  1. Close of day without notice: Where the contract is to pay wages daily;
  2. On a periodic basis when payment is due where the contract to pay wages is less than a month: For instance, if wages are paid every fortnight, the notice issued shall at least be for the same period; and
  3. Twenty-eight days: Where the contract is to pay wages every month.
  • Due Process

Employers must follow due process when terminating employees. This includes giving the employee an opportunity to be heard, presenting evidence, and allowing the employee to defend themselves against any allegations that may be levied against them. Employees should also be made aware of, among other things, their right to present witnesses, adduce evidence in support of their position, have their chosen representative present during the hearing and their right to appeal if they are aggrieved by any decision.

  • Retrenchment and Redundancy: If a termination is due to redundancy or retrenchment, employers must follow specific procedures outlined in the Employment Act of Kenya, including but not limited to, consultation with affected employees and the payment of severance pay.
  • Reporting to the Labour Office

The employer is responsible for notifying the labour office in the district in which the employee was working. Specific information ought to be included, such as but not limited to, circumstances leading to the dismissal and period of notice.

  • Compensation

An employee is entitled to compensation as agreed in the contract of employment and/or the CBA. This includes severance pay, service pay and gratuity, where applicable. 

  • Certificate of Service

The employer must ensure that the employee receives a Certificate of Service upon termination of employment. 

  • Dispute Resolution

Kenya has various mechanisms for resolving labour disputes, including the Courts of competent authority or arbitration. Employees who believe they have been unfairly terminated can file a complaint with the relevant bodies for resolution.

1. Dismissal of Employees in Kenya

Employers may opt to dismiss their employees based on certain grounds, which include but are not limited to:

  • Gross Misconduct: An employer can terminate an employee for gross misconduct, such as theft, fraud, violence, or serious insubordination. However, due process must be followed, and the employer must prove the misconduct. 
  • Physical Incapacity: An employer can terminate the services of an employee on physical incapacity. Still, due process must be followed, including conducting medical assessments to determine whether an employee is incapable of performing their duties, convening a hearing, and granting the employee the right to appeal.
  • Poor Performance: If an employee consistently performs below the agreed milestones, an employer can terminate their employment. However, the employee should be given reasonable notice and opportunity to improve.
  • Statutory Illegality: If an employee commits a statutory illegality that is in breach of the established work place policies, the employer can terminate their contract of employment. The employer will still be required to conduct a hearing and give the employee an opportunity to defend themselves.

2. Unfair Termination in Kenya

Unfair termination in Kenya refers to the improper or unlawful cessation of an employee’s employment by their employer. It refers to the unjust and improper dismissal of an employee from their job in violation of their legal rights and the principles of fairness outlined in Kenyan labour laws. When an employer terminates an employee’s contract without proper cause, due process, and/or in contravention of the Kenya employment laws, it is considered unfair termination.

The Court of Appeal in Civil Appeal No. 31 of 2015 between Kenfreight (E.A.) Limited versus Benson K. Nguti, while considering section 45, Employment Act, included the instances that amount to unfair termination. Unfair termination can take various forms, including but not limited to:

  • Breach of Employment Contract: Violating the terms and conditions of an employment contract, including failing to provide the required notice period can constitute unfair termination.
  • Constructive Dismissal: Creating a hostile or unbearable work environment to force an employee to resign is also considered a form of unfair termination. 
  • Failure to Follow Due Process: Employers are required to follow specific procedures when terminating employees, such as conducting disciplinary hearings, allowing appeals, allowing the employee the right to have a representative present during a disciplinary hearing. Failure to do so can result in unfair termination claims. 
  • Retaliation: Firing an employee as a form of retaliation for whistleblowing, participating in a legal strike, joining, or participating in a trade union, or exercising their legal rights, is considered unfair and illegal.
  • Termination without Cause/ Wrongful Dismissal: An employer terminates an employee’s contract without a valid reason or justification, which violates the principles of fairness and due process.
  • Unlawful Discrimination: Terminating the employment contract in Kenya based on factors such as gender, race, religion, age, disability, pregnancy, political opinion, HIV status, disability or union membership is considered unfair and discriminatory.

Final Thoughts

It is especially important for both employers and employees to be aware of their rights and responsibilities under Kenyan employment laws. Failure to do so can lead to legal consequences for the employer and the possibility of remedies for the affected employee. Seeking legal advice or consulting with relevant authorities can be beneficial when dealing with termination and dismissal issues to ensure that they are managed fairly and in compliance with the law. Additionally, keeping proper records of employment contracts, performance evaluations, and disciplinary actions can help protect the rights of both employers and employees in case of disputes.

It is also key to note that employment laws and regulations in Kenya can change. It is thus advisable for both employers and employees to stay informed about the latest labour laws and consult legal experts when dealing with termination and dismissal issues. Additionally, employment contracts play a crucial role in defining the specific terms and conditions of employment, so they should be drafted carefully and reviewed by legal professionals.

Disclaimer: This piece should not be regarded as legal advice, nor should it be considered as a substitute for legal consultation and/or legal advice from the best law firm in Kenya. Feel free to contact us by calling on +254703124871 or click here book an appointment with us.