Termination and dismissal of employees in Kenya are governed by the Employment Act, 2007, which outlines the rights and obligations of both employers and employees.
This article provides a detailed overview of the legal framework, grounds for termination, procedural requirements, and relevant case law.
Legal Framework
The primary legislation governing termination and dismissal in Kenya is the Employment Act, 2007. This Act ensures that terminations are both substantively and procedurally fair. Substantive fairness relates to the reasons for termination, while procedural fairness pertains to the process followed in effecting the termination.
1. Types of Termination
1.1. Termination by Mutual Agreement
Both parties may agree to terminate the employment contract. This type of termination is often less contentious and can be formalized through a written agreement.
The terms of the termination, including any severance packages, should be clearly outlined to avoid future disputes.
1.2. Termination with Notice
The Employment Act stipulates that either party must give notice before terminating the contract, unless the termination is for a serious cause. The notice period typically ranges from one to three months, depending on the terms of the employment contract.
Failure to provide notice may result in payment in lieu of notice.
1.3. Termination without Notice
This occurs when an employee is dismissed immediately due to serious misconduct or other valid reasons specified by the Employment Act. The employer must provide valid grounds and follow due process to avoid wrongful dismissal claims.
2. Grounds for Dismissal
2.1. Misconduct
Employers can dismiss employees for serious misconduct, such as theft, fraud, or insubordination. It's essential that employers follow a fair disciplinary process, which includes conducting a proper investigation and giving the employee a chance to defend themselves.
2.2. Poor Performance
If an employee consistently fails to meet performance standards, the employer may initiate dismissal proceedings. However, the employer must provide evidence of performance issues and offer opportunities for improvement before proceeding with termination.
2.3. Redundancy
Redundancy occurs when an employer reduces their workforce due to economic reasons, technological changes, or organizational restructuring. Employers must follow the legal procedures for redundancy, including consultation and compensation.
3. Legal Procedures and Requirements
3.1. Disciplinary Procedure
The Employment Act requires employers to follow a fair disciplinary process before dismissing an employee. This includes:
Issuing a Show Cause Letter: The employee should be informed of the alleged misconduct and given a chance to respond.
Conducting a Hearing: A fair hearing must be conducted where the employee can present their case.
Issuing a Decision: Based on the hearing, the employer decides whether to proceed with dismissal or other disciplinary actions.
3.2. Notice and Severance Pay
Employers must provide the required notice period or payment in lieu of notice. Additionally, if the dismissal is due to redundancy, employees are entitled to severance pay as outlined in their employment contract or the Employment Act.
3.2.1. Notice Periods
The notice period varies based on the nature of the employment contract:
Daily Wage Contracts: Terminable at the close of any day without prior notice.
Weekly Contracts: One week’s notice or payment in lieu.
Monthly Contracts: 28 days’ notice or payment in lieu.
Probationary Contracts: Seven days’ notice or payment in lieu.
3.2.2. Severance Pay
Section 40(1)(f) of the Employment Act stipulates that employees who are made redundant are entitled to severance pay. This payment is calculated based on the employee’s duration of service and is typically equivalent to 15 days' wages for each completed year of service.
4. Employee Rights and Remedies
Employees who believe they have been unfairly dismissed have several avenues for seeking redress:
4.1. Filing a Complaint
Employees can file a complaint with the Directorate of Occupational Safety and Health Services or the Industrial Court if they believe their dismissal was unfair or unlawful.
4.2. Unfair Dismissal
An employee may claim unfair dismissal if the termination does not meet the criteria of substantive and procedural fairness. Grounds for unfair dismissal include:
Discrimination: Termination based on race, gender, religion, or other discriminatory factors.
Retaliation: Dismissal for whistleblowing or filing a complaint against the employer.
Violation of Rights: Termination for exercising legal rights, such as taking maternity leave.
4.2.1. Remedies for Unfair Dismissal
If an employee successfully proves unfair dismissal, the court may award remedies such as:
Reinstatement: Returning the employee to their former position.
Compensation: Monetary compensation for loss of earnings and benefits.
Damages: Additional damages for emotional distress or reputational harm.
Case Law
Several landmark cases have shaped the understanding and application of termination and dismissal laws in Kenya:
Walter Ogal Anuro v. Teachers Service Commission [2013] eKLR: The court held that for a termination to be deemed fair, it must be both substantively and procedurally fair. The employer must prove the reasons for termination and demonstrate that due process was followed.
Kenfreight (EA) Limited v. Benson K. Nguti [2016] eKLR: This case emphasized the importance of procedural fairness. The court ruled that failure to conduct a disciplinary hearing rendered the termination unfair, regardless of the reasons for dismissal.
Shekue Kahale Kombo v. Governor Lamu County & 2 others [2022] eKLR: The court reiterated that issuing a notice of termination alone is insufficient. Employers must conduct a thorough inquiry and allow the employee to respond to allegations before making a termination decision.
Conclusion
Understanding the legal framework and procedural requirements for termination and dismissal in Kenya is crucial for both employers and employees. Adhering to the principles of substantive and procedural fairness ensures that terminations are legally sound and minimizes the risk of disputes.
Employers are encouraged to seek legal advice and conduct thorough due diligence before terminating an employee to avoid potential legal repercussions.
For more detailed information, please refer to the Employment Act.
