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Termination of employment Contracts



A contract of employment in Kenya may be terminated in the following ways, namely:

  1. Termination on notice;
  2. Summary dismissal; or
  3. Termination on account of redundancy.


Termination on Notice

This refers to a situation where an employment contract is terminated by either party i.e., employer or employee, where one party gives notice to the other.

This is provided for in section 35 of the Employment Act which states that an employment contract can be terminated via notice in the following ways depending on the intervals when wages are to be paid:

  1. a one-day notice, if wages are to be paid daily e.g., casual labourers
  2. a less than one-month notice (based on the specific interval) if wages are to be paid at intervals of less than one month.
  3. a one-month notice if wages are paid at monthly intervals or more.

An employee may terminate an employment contract without reason. However, section 45 of the Employment Act provides that an employer can only terminate an employment contract if he has fair and valid reasons. These reasons could be related to employee’s conduct, capacity or compatibility or based on the operational requirements of the employer.

The process of termination of employment has to comply with fair procedure, that is, the employer must explain to the employee the reason for considering his termination before the employee and another employee or shop floor union representative and give the employee a chance to defend himself.

The following reasons are deemed to be unfair reasons for the termination of an employment contract:

  1. a female employee’s pregnancy, or any reason connected with her pregnancy;
  2. the proposal to go or the going on leave of an employee where the employee is entitled to take leave;
  3. an employee’s membership or proposed membership of a trade union;
  4. the participation, or proposed participation of an employee in the activities of a trade union outside working hours, or, with the consent of the employer, within working hours;
  5. an employee’s seeking of office as, or acting, or having acted as an officer of a trade union or a workers’ representative;
  6. an employee’s refusal or proposed refusal to join or withdraw from a trade union;
  7. an employee’s race, colour, tribe, sex, religion, political opinion or affiliation, national extraction, nationality, social origin, marital status, HIV status or disability;

If an employee is found guilty of misconduct, poor performance or physical incapacitation, the employer may terminate the employee and pay the employee in lieu of notice, in accordance with the employee’s contractual notice period.

Prior to terminating an employee’s contract on grounds of poor performance the Employment and Labour Relations Courts have established that an employer is required to first put the employee on a performance improvement plan.

The termination procedure set out under Section 41 of the Act requires:

  1. explaining to an employee the reasons why the employer is considering terminating the employee;
  2. informing an employee of his right to have either a fellow employee (if unionized) or a shop union representative (if unionized) present during the disciplinary proceedings;
  3. the employee should be allowed reasonable time to prepare a defence in response to the notification of allegations received;
  4. conduct of a hearing before an impartial disciplinary committee;
  5. communication of the decision arrived at by the disciplinary committee and reasons for the decision; and
  6. the employer’s internal disciplinary procedures should provide an appeal mechanism.


How can we assist you?

We can advise you on ways of terminating contracts for employers and employees. Please contact us for our services at info@netsheria.com or visit our website at https://netsheria.com/ for more on our services.

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