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Termination of Employment Contracts: Termination on Account of Redundancy (PART 3)



Termination on Account of Redundancy

Redundancy is defined as the involuntary loss of employment, occupation, job or career of an employee through no fault of his/her own but rather at the employer’s initiative. An employee can be declared redundant in certain situations like the downsizing of operations at his/her place of work, reduction of staff members at his/her place of work etc.

Pursuant to Section 40 of the Act the following conditions should be satisfied prior to declaring an employee redundant:

  1. if the employee is a member of a trade union, the employer must notify that union and the labour officer in charge of the area where the employee is employed of the reasons for, and the extent of, the intended redundancy at least a month prior to the date when the employee will be declared redundant;
  2. if the employee is not a member of a trade union, the employer must notify the employee personally in writing and the labour officer;
  3. the employer must consider the seniority, skill, ability and reliability of each employee if a particular class of employees will be affected by the redundancy;
  4. the employer must not place the employee at disadvantage for being or not being a member of a Trade Union where a collective agreement exists between the employer and that union with regard to terminal benefits being payable upon redundancy;
  5. the employer must pay the employee for leave days not taken;
  6. the employer must pay the employee at least one month’s notice or one month’s wages in lieu of notice; and
  7. the employer must pay the employee a severance pay at the rate of at least fifteen days’ pay for each completed year of service.


It should be noted that the above conditions do not apply if the employee’s redundancy is a result of the employer’s insolvency. In such a situation the employee can apply to the Cabinet Secretary in charge of Labour and Social Services for payment of:

  1. any outstanding wages of between 1 to 6 months,
  2. any payment in lieu of notice,
  3. any payment for annual leave days not taken,
  4. any basic award of compensation for unfair dismissal and
  5. any reasonable reimbursements, in whole or part, for any fee or premium paid by an apprentice.


In addition to the above conditions, Kenyan courts have stated that an employer should hold consultations with the employees after the notice of intention to render the employees redundant is issued but before the termination.

The employer is also required to consider whether there are other alternatives to declaring the employees redundant such us re-deployment



Upon termination of an employee’s employment, the employer is required to issue the employee with a certificate of service.


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