Redundancy Law in Kenya

Redundancy Law in Kenya

Redundancy is an important yet sensitive topic in Kenya’s employment landscape. It refers to the loss of employment due to the employer’s operational changes, economic factors, or restructuring. The Kenyan Employment Act, 2007, provides a clear framework for redundancy, ensuring fair treatment of employees and compliance by employers. Here, we delve into the key provisions and legal obligations surrounding redundancy in Kenya.

What Is Redundancy Under Kenyan Law?

Section 2 of the Employment Act, 2007, defines redundancy as the loss of employment through no fault of the employee. This may result from the employer’s operational needs becoming non-essential, technological advancements, or financial constraints. Importantly, redundancy is not a termination based on poor performance or misconduct.

Employer Obligations in Redundancy

When considering redundancy, employers must adhere to specific legal requirements to ensure fairness and legality:

1. Justification for Redundancy

An employer must have a valid and justifiable reason to declare redundancy. Reasons could include business closure, departmental restructuring, or cost-cutting measures. Arbitrary or discriminatory redundancies are unlawful.

2. Consultation Process

Section 40 of the Employment Act mandates employers to engage in a consultative process with the affected employees or their representatives. This involves explaining the reasons for redundancy and exploring possible alternatives, such as redeployment or reduced working hours.

3. Notice of Redundancy

Employers must issue a written notice to:

• The affected employee(s)
• The employee’s trade union (if applicable)
• The area’s Labour Officer

The notice should be issued at least one month before the redundancy takes effect. This ensures adequate time for preparation and dialogue.

4. Criteria for Selection

The law emphasizes fair and objective criteria when selecting employees for redundancy. Common considerations include length of service, skill levels, and productivity. Discrimination based on race, gender, or any other prohibited grounds is strictly prohibited.

5. Severance Pay

Employees declared redundant are entitled to severance pay, which is calculated as at least 15 days’ salary for every year of completed service. This payment is distinct from other terminal dues such as accrued leave.

Employee Rights During Redundancy

Redundancy laws protect employees by outlining their rights and ensuring they receive fair compensation and treatment. Key rights include:

• Notice Period or Pay in Lieu: If an employer fails to provide a redundancy notice, they must compensate the employee with payment equivalent to the notice period.
• Severance Pay: As stated above, severance pay is a statutory entitlement.
• Unpaid Dues: All pending salaries, overtime, and accrued leave must be settled before the redundancy takes effect.
• Certificate of Service: Employers must provide a certificate of service, which can aid employees in securing future opportunities.

Consequences of Non-Compliance

Employers who fail to comply with redundancy laws risk facing legal action. Courts may order compensation, reinstatement of employees, or penalties for breaching labor laws. Compliance with these provisions protects employers from costly disputes and reputational damage.

How Employees Can Challenge Unlawful Redundancy

Employees who believe their redundancy was unfair or unlawful can:

1. File a Complaint with the Labour Office: The Labour Office can mediate disputes and investigate compliance with redundancy procedures.
2. Seek Legal Redress: Employees can file a claim with the Employment and Labour Relations Court. Remedies may include compensation for unfair termination or reinstatement.

Best Practices for Employers

To avoid redundancy disputes, employers should adopt the following practices:

• Maintain Transparency: Clearly communicate the reasons for redundancy and involve employees in the decision-making process.
• Explore Alternatives: Consider alternatives such as voluntary exits, retraining, or temporary pay reductions.
• Document All Steps: Maintain comprehensive records of all notices, consultations, and payments to demonstrate compliance.
• Seek Legal Advice: Engage legal professionals to ensure adherence to redundancy laws.

Conclusion

Redundancy, though sometimes necessary, must be managed lawfully and compassionately in Kenya. Employers should comply with the Employment Act’s provisions to uphold fairness and minimize disputes. Employees, on the other hand, should be aware of their rights and take appropriate action if those rights are violated. By adhering to these principles, the workplace can navigate redundancy with dignity and integrity.