Employment relationships, while vital to business operations and livelihoods, sometimes come to an end. In Kenya, employment termination is governed by various laws designed to balance the rights and responsibilities of both employers and employees. Understanding these legal provisions is essential to avoid disputes, ensure compliance, and uphold fair labour practices.

1. Legal Framework

Employment termination in Kenya is primarily governed by:

• The Employment Act, 2007

• The Labour Relations Act, 2007

• The Constitution of Kenya, 2010

• Judicial precedents and rulings from employment and labour courts

These laws set the standards for fair termination and protect employees from unlawful dismissal.

2. Types of Termination

There are several lawful ways an employment contract can be terminated in Kenya:

a) Termination by Notice

Either party can terminate the employment contract by giving prior notice as stipulated in the contract or, in the absence of such a provision, under the terms outlined in the Employment Act.

b) Summary Dismissal

An employer may summarily dismiss an employee without notice for gross misconduct, such as theft, insubordination, or negligence. However, due process must still be followed.

c) Redundancy

This occurs when a position becomes unnecessary due to business restructuring, downsizing, or closure. Employers must follow the proper redundancy procedure, including issuing notices, consulting affected parties, and paying terminal dues.

d) Mutual Agreement

Employers and employees may agree to terminate the contract voluntarily, often referred to as a mutual separation.

3. Procedural Fairness

Kenyan law emphasizes procedural and substantive fairness in termination. This means that:

• Employees must be informed of the reasons for termination.

• They must be given a chance to respond to allegations.

• A fair disciplinary process should be followed, as required under Section 41 of the Employment Act.

Failure to observe procedural fairness may render an otherwise lawful termination unfair.

4. Employee Entitlements Upon Termination

Upon lawful termination, an employee may be entitled to:

• Salary up to the last working day

• Accrued leave days

• Notice pay (if notice wasn’t served)

• Severance pay (in cases of redundancy)

• Certificate of service

5. Unfair Termination

Unfair termination occurs when an employee is dismissed without valid reason or without following due process. Remedies for unfair termination include:

• Compensation (up to 12 months’ salary)

• Reinstatement (in rare cases)

• Declaration that the dismissal was unfair

6. Best Practices for Employers

To minimize legal risks and promote fairness:

• Document all employment contracts and HR policies

• Follow the laid-out procedures in disciplinary or redundancy cases

• Seek legal guidance when in doubt

• Maintain records of communications and warnings