Pay & working terms · 4 min read
Redundancy in Kenya: notice, severance pay and your rights
What counts as redundancy, the seven conditions section 40 of the Employment Act sets, how severance is worked out, and what to do if the rules were not followed.
Redundancy is the one way of losing a job that is not about you. The law treats it strictly: an employer must give notice, choose fairly and pay specific amounts. Here is what the Employment Act requires, how to check the figures and where to complain.
What redundancy means in law
Section 2 of the Employment Act defines redundancy as the loss of employment by involuntary means through no fault of the employee, at the employer's initiative, where the employee's services are superfluous. It includes what is commonly called abolition of office.
If the real reason is your conduct or performance, it is not redundancy, and the employer must follow the procedure for those reasons instead.
The seven conditions in section 40
- Notice to the union and the labour officer, if you are a union member: the reasons and extent of the redundancy, not less than a month before the date of termination (section 40(1)(a)).
- If you are not in a union: notice to you personally in writing, and to the labour officer (section 40(1)(b)).
- Fair selection, with due regard to seniority in time and to the skill, ability and reliability of each employee in the affected group (section 40(1)(c)).
- No disadvantage for being or not being a union member, where a collective agreement sets terminal benefits (section 40(1)(d)).
- Leave due paid off in cash (section 40(1)(e)).
- At least one month's notice or one month's wages instead of notice (section 40(1)(f)).
- Severance pay of not less than fifteen days' pay for each completed year of service (section 40(1)(g)).
These conditions do not apply where the job ends because the employer is insolvent. Part VIII of the Act covers that case (section 40(2)).
Work out your severance
Severance is at least fifteen days' pay for each completed year. Ask the employer in writing which daily rate it used, and whether it is based on basic or gross pay under your contract or collective agreement.
Completed years of service: 6 Daily rate used by the employer: KSh 1,300 Severance: 6 x 15 x 1,300 = KSh 117,000 Plus one month's notice or one month's pay, plus earned leave in cash.
A collective agreement or your contract may promise more than the statutory minimum. Use the higher figure where it applies.
What to ask for in writing
- The redundancy notice with the reasons and the date of termination.
- The selection criteria used for your group.
- A calculation listing notice pay, leave pay, severance and any other benefit.
- Your certificate of service and certificate of pay and tax.
If the rules were not followed
A redundancy that skips the notice, the fair selection or the payments can be challenged as unfair termination. You can complain to a labour officer within three months of the termination (section 47(1)), and you can also go to the Employment and Labour Relations Court (section 47(3)).
Where a labour officer finds a termination unjustified, the remedies they can recommend include the wages for the notice period and compensation of up to twelve months' gross pay (section 49).
This guide is general information, not legal advice for your situation.
Sources and further reading
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Frequently asked questions
How is redundancy pay calculated in Kenya?
Severance pay is at least fifteen days' pay for each completed year of service (Employment Act, section 40(1)(g)), on top of one month's notice or pay instead of notice, and any leave due paid in cash.
How much notice must an employer give before redundancy?
Where you are a union member, the union and the labour officer must be notified at least a month before the termination date. You are also owed one month's notice or one month's wages.
Can an employer choose anyone for redundancy?
No. Section 40(1)(c) requires due regard to seniority in time and to the skill, ability and reliability of each employee in the affected group.
Where do I complain about an unfair redundancy?
To a labour officer within three months of the termination, or to the Employment and Labour Relations Court.