Know Your Rights: Unfair Termination Under Kenyan Employment Law

Losing a job is stressful, and even more so when it happens suddenly or unfairly. The good news is that Kenyan law gives employees strong protection. This article explains what amounts to unfair termination in Kenya, what procedure employers must follow, and what remedies are available. Employers will also find it a useful checklist for lawful dismissals.

The two tests: valid reason and fair procedure

Under the Employment Act, 2007, a termination is unfair if the employer fails to prove both:

1. A valid and fair reason — related to the employee's conduct, capacity or compatibility, or the employer's genuine operational requirements (redundancy); and
2. A fair procedure — the employee was told of the allegations and given a genuine opportunity to respond.

The burden is on the employer to justify the dismissal. A good reason with a bad process — or a good process with a weak reason — can still be unfair.

What a fair procedure looks like

Before dismissing an employee for misconduct or poor performance, the employer must:

• Explain the reasons being considered, in a language the employee understands
• Allow the employee to have a fellow employee or union representative present
• Hear and consider the employee's explanation before deciding

A show-cause letter, a reasonable time to respond and a disciplinary hearing with minutes are best practice.

Notice and pay in lieu of notice

Unless summarily dismissed for gross misconduct, an employee is entitled to notice as set out in the contract or the Act, or pay in lieu of notice. Even in cases of gross misconduct, the employee must still be heard before dismissal.

Redundancy must follow the law too

Redundancy is a lawful reason for termination, but only if the employer follows the statutory process: notice to the employee (or union) and the Labour Officer, fair selection criteria, payment of leave, notice and severance pay of at least 15 days' pay for each completed year of service.

What are my terminal dues?

• Salary for days worked
• Pay for untaken annual leave
• Notice pay (if notice was not given)
• Service pay or severance pay, where applicable
• A certificate of service

Remedies for unfair termination

If the Employment and Labour Relations Court finds that the termination was unfair, it may order:

• Reinstatement or re-engagement, in appropriate cases
• Compensation of up to 12 months' gross salary
• Payment of unpaid terminal dues, with interest and costs

Time limits: act quickly

Claims arising from employment must generally be filed within three years of the cause of action. However, evidence is easier to gather — and settlements easier to negotiate — soon after the dismissal. Keep your contract, payslips, letters, emails and WhatsApp messages.

Summary dismissal for gross misconduct

An employer may dismiss summarily — without notice — only where the employee has fundamentally breached their obligations. The Employment Act gives examples of gross misconduct, such as being absent from work without leave or lawful cause, being intoxicated at work, wilfully neglecting duties, using abusive or insulting language to the employer, knowingly refusing a lawful instruction, and committing or being reasonably suspected of committing a criminal offence against the employer or the employer's property. Even then, the employee must be heard first.

Constructive dismissal

Sometimes an employer does not dismiss an employee directly but makes working conditions so intolerable — for example by unilaterally cutting salary, demoting without cause or subjecting the employee to harassment — that the employee has no reasonable choice but to resign. Kenyan courts recognise this as constructive dismissal, and the employee may be entitled to the same remedies as for unfair termination.

Employees on probation

Probation allows an employer to assess a new employee, and the notice period during probation is shorter. However, Kenyan courts have held that employees on probation are still entitled to fair treatment, including being told why the employer is unhappy and given a chance to respond.

What to do if you have been dismissed

1. Ask for the dismissal and reasons in writing
2. Collect your contract, payslips, appraisals, warning letters and any messages
3. Write down a timeline of events while it is fresh
4. Request your terminal dues and certificate of service
5. Get legal advice early — many claims settle through negotiation or conciliation

Where employment disputes are resolved

Employment disputes can be resolved at several levels. Many start with an internal appeal or grievance. A dispute may also be reported to the Labour Office for conciliation, which is free and often quick. Claims that cannot be settled are filed at the Employment and Labour Relations Court (ELRC) or, for lower-value claims, before magistrates designated to hear employment matters. Throughout the process, the parties can negotiate a settlement.

Be careful with settlement agreements

When leaving a job, employees are often asked to sign a discharge voucher or settlement agreement confirming that they have received all their dues and have no further claims. Courts may uphold a discharge that was signed freely with full knowledge of its effect, which can end your right to claim more. Before signing, check the calculation of your dues carefully and, if in doubt, take legal advice. Employers, equally, should ensure that settlement terms are clear, fair and properly documented.

Tips for employers

• Have clear written contracts and an HR policy manual
• Document performance issues and warnings
• Always conduct a hearing before dismissal
• Take legal advice before redundancies

Talk to an employment lawyer

Whether you are an employee facing unfair termination in Kenya or an employer planning a restructuring, our employment lawyers give practical, honest advice. Contact us for a consultation.