How to terminate an employee in Kenya under the Employment Act

How to terminate an employee in Kenya under the Employment Act

The Employment Act, No. 11 of 2007 (“the Act”) provides clear guidelines on termination and dismissal in employment matters. Employers and employees alike must understand their rights and obligations to ensure fairness and compliance with the law.

1. Termination Notice

Under Section 35(2) of the Act, if an employment contract specifies a written notice period for termination, that period takes precedence. This means both parties must adhere to the agreed-upon notice duration before ending the contract.

2. Payment in Lieu of Notice

In cases where either the employer or the employee terminates the contract without giving prior notice, Section 36 mandates that the party initiating the termination must compensate the other. This payment is equivalent to the wages the employee would have earned during the notice period.

3. Waiver of Notice Period

According to Section 38, an employer and an employee may mutually agree to waive the notice period. In such cases, the employer is generally required to pay the employee for the notice period unless both parties agree to forgo the payment.

4. Termination Due to Redundancy

Section 40 outlines the procedure for terminating an employee on the grounds of redundancy. Employers must issue a proper notice or provide payment in lieu of notice. However, these provisions do not apply in cases where termination arises due to insolvency.

5. Termination on Grounds of Misconduct

When an employee faces termination due to misconduct, Section 41 requires the employer to provide notice and conduct a fair hearing. Misconduct may include violations outlined in the employment contract, poor performance, or physical incapacity. The employee has the right to be heard and to present a defense before termination.

6. Employer’s Duty to Prove Reason for Termination

Under Section 43, the employer must provide a valid and justifiable reason for terminating an employee. Failure to do so renders the termination unfair and unlawful.

7. Summary Dismissal

Section 44 of the Act specifies circumstances where an employer may summarily dismiss an employee without notice. These include:

• Absenteeism without cause;
• Reporting to work intoxicated and unable to perform duties;
• Neglecting or carelessly performing assigned tasks;
• Using abusive or insulting language toward an employer or supervisor;
• Willfully disobeying a lawful and reasonable command;
• Being arrested for a cognizable offense and not securing release within 14 days;
• Committing or being suspected of committing a criminal offense that harms the employer or their property.

8. Unfair Termination

Section 45 defines unfair termination as:

• When an employer fails to provide a valid reason for termination;
• When termination is not based on the employee’s conduct, capacity, or operational needs;
• When proper procedures are not followed during termination.

Conclusion

Employment laws in Kenya provide significant protections to employees, recognizing that they often have less bargaining power compared to employers. To ensure fair and lawful termination, employers must follow due process.

Key considerations include:

• Providing the required notice period or paying in lieu of notice;
• Allowing employees to serve their notice period without undue frustration;
• Ensuring that summary dismissals follow legal procedures, including giving the employee a fair hearing.

The best practice for employers is to issue clear, written termination notices that specify the reasons for termination. If necessary, they should compensate employees instead of requiring them to work through the notice period. Following these legal guidelines reduces the risk of labor disputes and ensures compliance with the Employment Act, 2007.

This article does not constitute legal advice.