redundantThe situation…


To all typists: –

You must have noticed the installation of the latest voice recognition software in your respective bosses’ offices. Unfortunately, this means that your services are no longer required. Your last day of employment shall be on Friday, 31st (which is four weeks away). Please arrange to collect your salary cheque on that day after clearing with all departments. The company wishes you all the best in your future endeavours.”

The Law…

A redundancy is defined in the Employment Act, 2007 as: –

The loss of employment, occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous and the practices commonly known as abolition of office, job or occupation and loss of employment.

In Kenya, the words “redundancy”, “retrenchment”, “lay-off”, “staff rationalisation” are used interchangeably.


If the employee is unionisable then the CBA will provide the procedure to be followed prior to terminating an employment contract on account of redundancy. This will incorporate the procedures spelt out in the Employment Act and may include additional obligations such as giving the employee first priority should a job opening arise in future etc.

step 1

Where the employee is a member of a trade union, notify the union and the labour officer in charge of the area where the employee is employed, of the intended redundancy and of the reasons for and the extent of the redundancy.

Where an employee is not a member of a trade union, the employer should notify the employee personally in writing and the labour officer.

The notice should be for not less than 30 days.

For the avoidance of doubt, where the employee is unionisable, the notice should be issued to the union only and not to the employee – Thomas De La Rue (K) Ltd v David Opondo Omutelema [2013] eKLR – Court of Appeal.

It is quite clear to us that section 40(a) and 40(b) provide for two different kinds of redundancy notifications depending on whether the employee is or is not a member of a trade union. Where the employee is a member of a union, the notification is to the union and the local labour officer at least one month before the effective redundancy date. Where the employee is not a member of the union, the notification must be in writing to the employee and the local labour officer…

The Court of Appeal has also clarified that only one notice should be issued – Africa Nazarene University v David Mutevu & 103 others [2017] eKLR. Previous intepretations of Section 40 were that a notice of intent to declare redundancy should be issued at the beginning and a notice of termination issued at the end of the 30 day period.


It has been held both by the Court of Appeal and by the Employment & Labour Relations Court that the notice opens up the door for a consultative process with the key stakeholders – trade unions and employees. In holding as such, our courts have relied on ILO Convention 158 on Termination of Employment Convention, 1982 as well as on ILO Recommendation 166 on Termination of Employment Recommendation, 1982.

The Convention is only binding upon the countries that have ratified it (Kenya has not) whereas the Recommendation has no binding force and is meant to provide guidelines which may or may not be adopted through legislation in ILO member countries. The Convention is not binding in Kenya since we have not ratified it but in light of the court decisions, particularly those of the Court of Appeal, employers are expected to consult. The purpose is to consult on measures that can be taken to avert or minimise the redunduncies and to mitigate the effects of the redundancy.

The relevant provisions of the Convention are: –


Article 13 (1) When the employer contemplates terminations for reasons of an economic, technological, structural or similar nature, the employer shall:

(a) provide the workers’ representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out;

(b) give, in accordance with national law and practice, the workers’ representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.


Article 14 (1) When the employer contemplates terminations for reasons of an economic, technological, structural or similar nature, he shall notify, in accordance with national law and practice, the competent authority thereof as early as possible, giving relevant information, including a written statement of the reasons for the terminations, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out.

14. (3) The employer shall notify the competent authority of the terminations referred to in paragraph 1 of this Article a minimum period of time before carrying out the terminations, such period to be specified by national laws or regulations.

The relevant provisions of the Recommendation are: –

Article 19(1) All parties concerned should seek to avert or minimise as far as possible termination of employment for reasons of an economic, technological, structural or similar nature, without prejudice to the efficient operation of the undertaking, establishment or service, and to mitigate the adverse effects of any termination of employment for these reasons on the worker or workers concerned.

(2) Where appropriate, the competent authority should assist the parties in seeking solutions to the problems raised by the terminations contemplated.

Consultations on Major Changes in the Undertaking

Article 20 (1) When the employer contemplates the introduction of major changes in production, programme, organisation, structure or technology that are likely to entail terminations, the employer should consult the workers’ representatives concerned as early as possible on, inter alia, the introduction of such changes, the effects they are likely to have and the measures for averting or mitigating the adverse effects of such changes.

(2) To enable the workers’ representatives concerned to participate effectively in the consultations referred to in subparagraph (1) of this Paragraph, the employer should supply them in good time with all relevant information on the major changes contemplated and the effects they are likely to have.

Measures to Avert or Minimise Termination

Article 21. The measures which should be considered with a view to averting or minimising terminations of employment for reasons of an economic, technological, structural or similar nature might include, inter alia, restriction of hiring, spreading the workforce reduction over a certain period of time to permit natural reduction of the workforce, internal transfers, training and retraining, voluntary early retirement with appropriate income protection, restriction of overtime and reduction of normal hours of work.

Article 22. Where it is considered that a temporary reduction of normal hours of work would be likely to avert or minimise terminations of employment due to temporary economic difficulties, consideration should be given to partial compensation for loss of wages for the normal hours not worked, financed by methods appropriate under national law and practice.

Criteria for Selection for Termination

Article 23(1) The selection by the employer of workers whose employment is to be terminated for reasons of an economic, technological, structural or similar nature should be made according to criteria, established wherever possible in advance, which give due weight both to the interests of the undertaking, establishment or service and to the interests of the workers.

In Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR, about 450 employees of Kenya Airways sued the airline for unfair termination. On the issue of consultations, 2 out of 3 of the Judges held that consultation was mandatory…

My understanding of this provision is that when an employer contemplates redundancy, he should first give a general notice of that intention to the employees likely to be affected or their union. It is that notice that will elicit consultation between the parties, and I will shortly show that consultation is imperative, on the justifiability of that intention and the mode of its implementation where it is found justifiable. At that initial stage, the employer would not have identified the employee(s) who will be affected. So that notice cannot have the names of the employees as Mr. Mwenesi contended…

I am of the firm view that the requirement of consultations implicit in these provisions. The purpose of the notice under Section 40(1) (a) and (b) of the Employment Act, as is also provided  for in the said ILO Convention No. 158-Termination  of Employment Convention, 1982, is to give the parties an opportunity  to consider “measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations  on the workers  concerned  such  as finding alternative employment.” The consultations are therefore  meant to cause the parties to discuss and negotiate a way out of the intended redundancy, if possible, or the best  way of implementing  it if  it is  unavoidable. This  means that if parties put their heads together, chances are that they could avert or at least minimize the terminations resulting from the employer’s proposed redundancy.  If  redundancy  is  inevitable, measures should  to be taken to ensure that as little hardship  as possible is caused to the affected employees. In  the circumstances,  I  agree  with  counsel for  the 1st    respondent  that consultation  is an imperative requirement  under our law.

Based on the above, the employer is not expected to have the names of those who will be affected by the time the first notice is being issued. The employer should have the numbers and categories of employees who will be affected as well as the proposed selection criteria. The list of those to be declared redundant is confirmed after the consultations and when it’s clear whose job has not been saved through the mitigation measures which may be udnertaken.


step 2

Determine the specific employees who will be impacted by the redundancy.

The employer must score the employees in the various affected categories, for example, drivers could be one category and packers could be another category, on the basis of their skills, ability, reliability and seniority. In some cases it has been held that the employer can use any other obejctive criteria.

In Kenya Plantation and Agricultural Workers’ Union v Harvest Limited [2014] eKLR, the Court held that: –

Section 40(1) (c) of the Act clearly provides that in selecting employees for redundancy, the employer shall have regard to seniority in time and to skill, ability and reliability of each employee of the particular class of employees affected by the redundancy.

The court holds that the idea of last in first out satisfies the seniority criterion. As far as skill, ability and reliability are concerned, it is the opinion of the court that the employer must have, prior to the redundancy exercise, instituted objective qualifications for skill, ability and reliability attached to the office held by the workers against which the skills, ability and reliability possessed by the individual workers targeted in the redundancy will be scored or measured against. The employer, in the court’s opinion, must demonstrate the objective score sheet and the ranking of the targeted employees against that score sheet with respect to the selection factors set out in section 40(1) (c) of the Act failing which, it is difficult to establish compliance with the section.

The court also holds that the selection parameters in section 40(1) (c) are not in alternative so that in a redundancy process, the employer must establish that all the parameters have been taken into account and in an objective manner. It is the opinion of the court that the employer enjoys the discretion to place given weights on each of the parameters but none can be applied in exclusion of the others.

In Thomas De La Rue (K) Ltd  v David Opondo Omutelema [2013] eKLR, the Court observed as follows:-

The second issue under section 40 relates to the selection criteria.  In determining the employees to be declared redundant, section 40 (c) requires the employer to consider seniority in time, skill, ability, reliability of the employees.  Although Mrs Guserwa, learned counsel for the respondent argued that there was no evidence adduced by the appellant to show that it had applied the criteria set out in section 40 (c) to the employees who were to be declared redundant, Exhibits Resp 4 and Resp 5 showed that 12 Kugler operators, among them the respondent, were evaluated on 14 criteria covering skill levels, ability, performance appraisal record, attendance, reliability and dependability, length of service and disciplinary record.  The respondent scored an average 16.5 out of a possible 35 points.  Two other Kugler operators, who had scored 17 and 14.5, were selected for redundancy with the respondent.

In Kenya Union Of Domestic Hotels Educational  Institutions And Hospital Workers (Kudheiha)  v  Aga Khan University Hospital Nairobi  [2015] eKLR, the Court quoted from the case of Banking Insurance and Finance Union (Kenya) versus Murata Sacco Society Limited, Cause No. 616 of 2010 where the Court held:

Thus reading the applicable law together with jurisprudence on how a redundancy should be undertaken, conducted and or processed; it involves the existence of genuine business reasons that require consultations, development of a pre-set criteria looking at seniority of affected staff; skill, ability, reliability and the class of each employee before arriving at the decision to terminate. Such a process must involve the Union  without disadvantaging employees not Unionised and as of importance, the Labour Officer responsible for the area where the Respondent employer is situate must be informed and involved. The Labour Officer is the government representative, neutral in the redundancy process to advice both the employer and employees on the applicable law and adherence to best practice especially as regards the set criteria. The inclusion of the Union where applicable and the Labour Officer is not optional; the law is framed in mandatory terms. Any resultant redundancy process without compliance with the law is unprocedural and a breach to the employment contract. Such breach where pleaded is curable by payment of damages.

In the Kenya Airways case, 2 of the judges held as follows on the issue of the selection criteria: –

I do not agree with the learned Judge that the “last-in-first-out” principle in Section 40(1)(c) must always be employed. The employer can use all or any of the criteria  in that paragraph.  In the present technological   age, if  the “last-in-first-out”  principle  is  held to be mandatory,  it  may defeat the employer’s  objective of employing modern technology  to carry out his business  because it may be that the last  employees to be employed, who according to this principle should be the first to exit, are the ones with the technological know  how  that  the  employer requires….


On whether LIFO was the sole criteria to be adopted to the exclusion of the other lawful criteria, I do not agree with the Industrial Court that LIFO is the sole mandatory criteria to be applied in redundancies. It is evident that section 40 (1) (c) requires the employers to apply all the selection criteria specified, with due regard to seniority in time, skill, ability and reliability of each employee. A sole application of LIFO would no doubt, be detrimental to any employer, as continuity and succession planning within the organization could be jeopardized.

The burden is on the employer to demonstrate the rationale behind selecting one employee over the other.

The selection rationale should be documented so that it can be produced in court should the redundancy be challenged.

The redundancy must be legitimate, simply changing the title of a position, without a legitimate change to the job description and skill set will not suffice; it will be clear that one is trying to get rid of an employee through the back door.

After the lapse of the consultation period, the employer should confirm the redundancy to the affected staff.

severance payDues

As regards the payments due to an employee who is declared redundant, the most significant payment is the severance; which should not be less than 15 days’ pay for each year worked. No severance is due for incomplete years worked unless the contract provides for pro-rating of severance in such cases. Similarly, no severance is due for employees who are on fixed term contracts and who are declared redundant during the first year of the contract.

Other payments due to the employee are the salary up the last day worked and payment in respect of accrued leave and any other contractual payments.

***THE END***

About Anne Babu

Anne is an Advocate of the High Court of Kenya and the Founding Partner of Anne Babu & Co. She has practised employment law for over 12 years and her employment law practice has been recognized by the prestigious Chambers & Partners. Anne cares about employers and their labour issues.


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  1. Anne Edward Kalu says:

    Good morning Madam,first and foremost i must appreciate,that the information you post is very important since its based on the daily challenges that most of the HRM meet.However i wish to clarify on certain issue.Based on redundancy,can one consider the sensitivity of the positions e.g where the employee is handling finance and the employer has no other department to transfer the affected employees so that he can serve the notice.Can he opt one month notice and instead pay it in lieu(immediately as he gives him/her the notice). Kindly advice.
    Thank you.

    1. Anne Babu says:

      Thank you for your kind words and for your question. The initial notice cannot be paid off in lieu but you can ask the employee not to come to the office. Once the 30 days lapse, you terminate the contract by giving notice and paying in lieu.

      1. Anne Edward Kalu says:

        Thank you so much for your quick reply.However,considering your response,Does it mean when writing the notice its wrong having such a clause”Due to the nature of your work,the company have no option but ending your contract with immediate effect”and instead just be wise enough by telling the employee verbally that he is free to go till the end of the notice period where he will come to clear with the company.?Kindly elaborate on this.Thank you.

        1. Anne Babu says:

          Yes, that statement is not legally correct. What you should say instead is that “you will not be required to work for the entire notice period. You shall be notified of when you may come and clear with the company”.

          1. Anne Edward Kalu says:

            Thank you so much.God bless you.

  2. Anne Kalu says:

    Good morning Madam,
    Once again wish to ask on redundancy practice:As far as the severance pay is concern,some times we have contracted staffs(fixed). However employer may wish to renew such contracts after they elapse.What is the best criteria to follow when computing for such staffs’ severance pay? if are among the list of employees to be affected before their contracts elapse.On the same note,is it legal letting the contract end automatically as stated in the contract letter or its unfair practice(mind you as far as the benefits are concern am considering the employer too).Kindly advice.Thank you.

    1. Anne Babu says:

      Hi Anne,
      The end of a fixed term contract is not a redundancy and therefore severance is not a mandatory payment.

      1. Anne Kalu says:

        Thank you so much Anne.

  3. Richard says:

    Thank you so much for the invaluable services. My question or observation is has the Employment Act been amended, especially as it relates to the maternity leave period. There is confusion really.

    1. Anne Babu says:

      Dear Richard, there are proposed amendments that have not been passed. The provisions therefore remain as per the Employment Act, 2007. Some of the proposals include, for example, to increase maternity and paternity leave to 90 and 14 working days respectively.

  4. Richard says:

    Why has Kenya shied away from ratifying some of the ILO convention especially the consultation part as it relates to redundancy/retrenchment?

    1. Anne Babu says:

      Dear Richard, it’s for the Ministry of Labour, FKE and COTU to push for ratification of conventions. If there’s no push then hardly anything will happen.
      As regards consultation, the Court of Appeal in the Kenya Airways case held that it was mandatory.

  5. Simon Wamburu says:

    Hi Madam,
    Can you refer me to a good trainer who can give a very effective training seminar for a group of employees who are facing redundancy? The training should include finance management and investment.

    Kind regards..

    1. Anne Babu says:

      Hi Simon,
      Check your email for a response.

  6. PERIS says:

    Hi Anne,
    Does the law penalise the employer for giving a redundancy notice same time to a Trade union official? secondly, if the workers are given a redundancy letter with a notice period of 2 months, should the employer pay again the notice period?

    1. Anne Babu says:

      Hi Peris, I’m afraid both your questions are not clear to me. Please re-phrase.

  7. .Habib says:

    Hi Anne.I have a relative who had engaged a clerk for four years at a monthly salary of 15000shs per month.Around the beginning of July this year,he declared him redundant after serving him duly with a one month notice.He was in the process of computing and paying him,his severance pay at the the rate of 15 days for each year worked,when early last week he got a letter from the Industrial area
    Labour office summoning him to their offices and at the same time demanding severance pay of 60,000 shs for the four years that the redundant employee had worked based on the rate of 15000shs for each year worked. Incidentally my relative has also been paying a monthly contribution of 400shs to NSSF for the four years of the employee’s reign.Please advise on what he should do.Thanks.

    1. Anne Babu says:

      He should respond to the letter and give a breakdown of the payment to be made to the employee – 15 days pay; salary for days worked; accrued leave pay and ask for a date when they can meet so that the payment is made in the presence of the labour officer. It should be clear that the payment is in full and final settlement of any claims arising from the employment.

  8. Antony Kinuthia says:

    Hello Anne,

    I would want to first appreciate the immense council you give in regards to labour matters.

    We are a company that has over 100 staff.The management was in negotiation with a certain entity in regards to renewing a contract which didn’t materialize.
    The management is intending to close down some of its departments in three months time.Kindly advise on:
    1.The safest and legal way to lay off the affected staff
    2.What would be the notice to issue.
    3.Kindly give a brief highlight of the procedure

    Thanks in advance.

    1. Anne Babu says:

      Hello Antony, thank you for your question. I believe the above article tackles all the questions that you have raised. Let me know if there is a specific question that has not been answered.

  9. Anne Kalu says:

    Hello Anne.
    Kindly advice,an employee has been on fixed contract.His contract has been renewed 3 times.He joined the company on 1st October 2015.On 1st August he was given another fixed contract for six months which should be ending in 31st January 2017.Come end next month in October he will have worked in the company for 1 year.Unfortunately what he used to do is no longer there thus forced to terminate his service before the end of the contract.In the contract letter its stating should the contract be ended then a month notice should be given or paid in lie.Kindly advice on how to handle this?
    Cant it be termed as redundancy?
    Thank you.

    1. Anne Babu says:

      Hi Anne. That is a redundancy. You should give him the requisite notices and notify the labour officer. He should be paid his salary up to the end of the notice period and accrued leave. You can have a look at the detailed post on redundancies for further information.

  10. olivor phelix atudo says:

    can one a one month notice after termination of employment be used to serve as a leave compensation at the same time

    1. Anne Babu says:

      Yes, with the employee’s consent.

  11. olivor phelix atudo says:

    i have served acompany for 1 year 6 days, i got a termination notice of thirty days also stating they will my accrued leave, pending days and a 1 year service pay, 3 days later they sent me a mail to apply a leave in order to reduce the no of claimed unpaid leave that they owe me. is it within the law to serve a 1 month notice and at the same time be used as a leave compensation?

  12. olivor phelix atudo says:

    it wont be fair , a case where by they have terminated a contract and i was instructed not to report to work. after presenting a claim of pending days and accrued leave is when the employer realizes that i should apply leave to reduces the claimed days. is this fair and rght before the law ?

    1. Anne Babu says:

      This happens quite often. I have come across only one case where the court held that an employee should not be forced to go on leave.

  13. Henry Quaye says:

    Thanks madam,
    I have a little problem which I would like to know more about.
    A worker who is full permanent, served for 15 or more years ,if the company is sold out
    Can you be sent to a different company without paying you anything?

    A which of the categories does it falls

    B will it be fair to use internal transfer for that ?

    1. Anne Babu says:

      The employee’s consent is required for a transfer to a new employer. The employee’s length of service should be recognized in the new employment. Alternatively, everything due under the previous contract is paid and the employee starts a fresh with the new employer.

  14. Emily says:

    Dear Anne, thank you for your post on terminations of contracts in Kenya.
    Please comment on fixed term contract that is due to expire on a specified date. However, the main reason for not renewing is related to business changes thus not requiring that particular position now. On another case, the fixed term contract is due to end on a specified date but the employer main reason is related to continuous non performance. On these two cases, will this be considered as redundancy thus requiring severance pay even when the fixed term contracts are coming to a natural end? Thanks and looking forward to hearing from you.

    1. Anne Babu says:

      A fixed term contract comes to an end on the last day of the contract and there is no obligation to advance reasons for non-renewal. There is no expectation of renewal, unless the employee had been assured of renewal or unless the contract provides for automatic renewal.

  15. Margaret says:

    Hi Anne,

    Is it mandatory by Law that an employee is notified before they are given a redundancy letter? In this scenario the employee was given the redundancy letter on a Friday with no prior notification and only provided with a session with the HR to discuss the redundancy on the Monday thereafter. What does the law state about the employee proceeding on sick leave or annual leave during this period before their last day of employment.

    1. Anne Babu says:

      The employer is not bound to discuss the redundancy with the employee before issuing the notice, though it is good practice to do so. The person issued with the notice remains an employee until the last day of employment and is therefore entitled to proceed on sick leave or annual leave.

  16. golden says:

    Hi Anne,

    I have just been declared redundant by a local bank.

    before my termination, i was serving as a financing officer (alone in a branch). this role i have done for 3 years.
    on appraisals i have always maintained A always exceeding targets.

    The bank wrote an email to all staff on 04.11.2016 sharing their intent to reduce staff cost. no letter was written to me advising on the redundancy of my position.

    a consultant came around branches for one on one basically asking about staff qualifications and roles.
    please note that i had been with the bank for over 7 years having served as teller, customer service and a back office person.

    basically, the only role i have not done is being a manager.
    on 01.12.2016 i received a termination letter on redundancy grounds and no other justification was given.
    the work i was doing of financing is now being done by a colleague who had never touched a file before.

    is this enough to be unfair termination and shouldn’t i have been redeployed in case of a planned restructure since the same was also not communicated.
    kindly advise on best course of action.


    1. Anne Babu says:

      Hi Golden, if someone else has taken over your responsibilities in financing then that is not a genuine redundancy. The essence of a redundancy is that either the position is abolished or it is merged with another one which you do not qualify for. On the face of it, it appears that your redundancy was unfair. If you have appeals or grievance handling procedures then that should be your first recourse. If you are not satisfied with the outcome, your second recourse should be either to a labour officer or a labour lawyer.

      1. Golden says:

        Thank you Anne, I appreciate your advice

  17. Febian Odongo says:

    Dear Ann, i saw this post and wanted to ask a question, I was recently declared redudant on the basis that the company is reducing staff for effeciency gains. We were told on Friday at 4pm on 31/01/2017 the intention of redudancy. Mon i was on leave and Tuesday when I came in there was a one on one discusion on the same and terminated the same day, and handover the same day. Am HR Officer and part of my duties was given to another HR consultant the rest i was told will be outsourced which am sure will be given to the same consultant. Is this fair termination and is there reason for appeal. I have been the best performer in the company my concern is that my boss realised i was pregnant and wanted to release me before the maternity leave which is 2 months way, since i had another maternity leave in Nov to Dec 2015. He created reasons and had other 4 staff leave on the redudancy. Is it justifiable to appeal, what would be the reason. I have of consultative procedure which has been used in other rulings.

    1. Anne Babu says:

      During the redundancy process, you should first get a notice of intent to declare redundancy which should last for 30 days and after that, if nothing can be done to save your job, your contract is terminated by giving you notice as per your contract or paying you in lieu. The process that was applied was, therefore, flawed and can be challenged. I do not think you will be able to show that the redundancy was because of the pregnancy; unfortunately it’s not normally easy to prove these sort of allegations. As regards the HR consultant and outsourcing, the company would need to justify why they took that route in order for any court to determine whether or not it was a genuine redundancy.

  18. Alpha says:

    Hi Anne,

    Thanks for the continuous insights on employment laws. I have a question, i will give a scenario first. So i am served with notice of redundancy by my employer, my last day being 10th Oct. Before the 30 day notice period ends i apply for a different role in the same company and i get the position. However my previous contract of employment (which is open) is still terminated on the 10th of Oct, i clear with HR and get my terminal dues. On 11th of October i start on a new contract of service for the new role, i even get a new employee no. as if i am a fresh recruit. Since i had worked for a year and 8 months on the 1st contract of service am i entitled to severance pay?

    1. Anne Babu says:

      During the notice period, the employer has a duty to try and mitigate the effects of a redundancy by, for example, getting alternative positions for those affected. Since you got another position, it would not be logical for you to receive a severance which is meant to compensate a person for their loss of employment.

      1. max says:

        Hi Anne, I was not given any notice, my employer terminated the appointment on the day they informed me that my job is redundant. Redundancy severance package was not included in my contract. It was only termination package. But the company has a redundancy package policy which was not used in settling me. Since no discussions or notice was given, should I sue them for wrongful termination? Secondly, during discussion as stipulated in ILO, I believe severance packages should equally be part of it when no CBA is available? Thanks. Max

        1. Anne Babu says:

          The Employment Act applies whether or not there is a CBA. Therefore, you are entitled to a severance pay as stipulated in the policy and not less than 15 days pay for each year worked. The termination procedure, which I have spelt out in this article, also applies. If the procedure was not followed or the severance was not paid, you have a case for unfair termination.

  19. Bobo says:

    Ann, I would want to first appreciate the immense council on labour matters.

    I would like to know are allowances e.g monthly car allowances included when paying out months in lieu of notice in the event of redundancy ?

    1. Anne Babu says:

      The allowances are supposed to be excluded from the computation.

  20. grey says:

    Good evening Anne, I have been an ardent reader of your posts as they really affect my day to day life as an Hr-practitioner. I have concern on what course of action should one take when the employer has refused to disclose the terminal dues entitlement and all he says is go we shall call you for the cheque. And he even chases you out of office when demanding for the calculations?

    1. Anne Babu says:

      Hi, if the payment is not made within a reasonable period, say when salaries are paid next, a reminder then official demand from a labour officer or lawyer should be done.

      1. Patricia says:

        Thank you for a very informative post. My question is with regard to the notice to the labour office and written notice to staff that is required 30 days prior to the intended date of termination due to redundancy for non unionised staff. Can this notice be paid
        off in lieu for non unionized staff or it is also required run its full course according the law?

        1. Anne Babu says:

          It should be served. The idea is to give the labour office time to come and verify that the process is being conducted properly – as far as I know, they only come if an employee reports an unfair labour practice in the process.

          1. Patricia says:

            Thank you very much

  21. Wangari says:

    Hello Anne,

    This blog is very insightful, keep up the good job. Now my question, i have a relative who has been working for a counselling organisation since February 2016 but received an sms text beginning December advising that the organisation was going through financial turmoil and that it was considering laying off some staff from 31st December, 2016. Unfortunately come 31st he was amongst the affected staff and was sent off with the December Salary only.
    Kindly help me understand whether that sms text was a notice served accordingly and whether he was entitled to payment in lieu of notice and payment for leave.

    1. Anne Babu says:

      He was entitled to accrued leave pay as well as a severance pay of not less than 15 days pay for each year worked and the notice pay.

  22. Nita says:

    Hi Anne,

    Great article.

    Where redundancy for a non-unionisable employee is through a letter “Notification of Intended Redundancy”, is the employer declaring the employee already redundant or does it imply that the redundancy letter is yet to come?

    The letter also states that the “employment is very likely to be terminated” and further states that “the company hereby gives one months notice of the Intended redundancy”.

    Why all the future tense?


    1. Anne Babu says:

      The first notice informs you of the intention to declare you redundant after 30 days. If nothing changes during the intervening period, you will receive a termination letter at the end of the 30 days terminating your employment on account of redundancy.

  23. Blessed says:

    My position was recently rendered “redundant”. I’ve been with the organization for 9 years. I first started as a casual for 2.5 months then I was given a 3-month contract. This was renewed once for another 3 months and thereafter, I continued working on the same job for the next 9 months without a renewed contract. At this point I was given permanent status for the next 7 months after which I was rendered redundant. However, I continued working on the same job, with the same pay etc. for the next 1 year and 8 months after which I successfully applied for another position. It is this position that has now been rendered redundant after 5 years. The employer is not willing to recognize the first 4 years in the payout – is this legal? Thanks.

    1. Anne Babu says:

      Yes it is legal, the employer is only bound to pay for the years worked under the current contract.

  24. Carole Muthamia says:

    Hi Anne,
    Thank you for this very informative blog.
    1. If one is declared redundant, how long should it be before he/she receives severance payment?
    2. Assuming the employee had received a bank loan while still in employment of the company, is the company obliged to pay off the loan for that employee with his/her severance payment?

    1. Anne Babu says:

      1. The severance should be paid on the last day of employment.
      2. Not without the employee’s consent.

      1. Wilmer says:

        Ms. Anne, thank you for your informative article and the comments section which has been very helpful. I have an unlimited contract. I was given verbal notice on 1 May of possible redundancy, letter given to me 2 May. It clearly stated that a final decision was not yet made and there would be a 30 day period of discussion. But then a one sentence line stated termination date was 1 July. My contract stipulates an official 2 month notice of termination. I am still working each day as usual, discussions ongoing.
        From my understanding of the article and the comments, the possible/intention of redundancy is 30 days, after which a letter of termination due to redundancy is given, then my contract comes into play. So the correct dates should be 1 May to 1 June possible redundancy, discussions, normal working hours, then decision made, termination letter given 1 June, then 2 month official notice period comes into force 1 June to 1 August. It does not seem fair to merge the two processes. One letter stating that the decision has not been made pending 30 days of consultation of possible redundancy and searching out options, then to state that official notice of termination date is one month after the 30 days. Otherwise the entire process is just an empty exercise. Your thoughts?

        1. Anne Babu says:

          The two notices should not be merged. You are entitled to an extra month’s pay.

          1. Wilmer says:

            Thank you Ms. Anne for your timely response. I shall pass along to colleagues how helpful your blog is to all employers and employees working under Kenya Labour Law. All the best.

  25. Samson says:

    Dear Anne,

    Looking for your expertise to guide me on the below.

    1. We have had a domestic worker, no written contract, who has been with us for 2 years 7 months now. We are parting mutually, as we now have a dog and she is not comfortable with him around. Please advise the notice period, severance/service pay to be given, and any other areas we need to take care of?

    2. We have a second domestic worker, no written contract, who has been with us for 3 months. Is there a notice period to be given to a domestic worker under probation? Any other pay?

    Many thanks,

    1. Anne Babu says:

      Dear Samson, on issue 1, give her service pay of 15 days’ pay for each year worked, one month’s notice pay and pay in respect of any accrued leave. Get her to sign confirming that the payments are made in full and final settlement. On issue 2, for probation, give her 7 days notice. You may face challenges because you did not give her a written contract confirming that she is going to be on probation. Outside of probation, if you pay her monthly, then the minimum notice is one month.

  26. Carole A says:

    Good morning Ann

    Thank you so much for the important information you post to assist many of us on the challenges they experience both as employees and employers. Nevertheless, I require a clarifications on certain concerns I am currently experiencing:
    In the month of June mid, I discovered that my employer was not remitting PAYE for all staff yet deductions were being done on a monthly basis. On taking it up with the employer, he assured me that he would effect my PAYE by end of June as I was the only one with a problem. I followed up again in the beginning of July and he mentioned he was in the process of registering all the employees and was in discussion with KRA officials which I later discovered was a lie. When I requested for a written documentation on the same I was issued with a redundancy notice which clearly stated the compensation package and the payment plan.
    The employer is currently adamant to pay me my dues despite the polite email reminders.
    1. How long should it take for the employer to pay my dues from the time of redundancy?
    2. Where the employer has refused to honor the payment plan as agreed in writing by both parties, what should be done?
    3. Can I take legal action against the employer for failure to remit my PAYE and circumventing the system on termination/redundancy?

    1. Anne Babu says:

      Hi Carol, redundancy dues should be paid on your last day of employment failing which you can take court action. You may report him to the relevant authorities – KRA and NSSF – for failing to remit, they will take appropriate action.

  27. Josephine says:

    Thank you for your comprehensive article. I recently worked for an organisation that went into liquidation. The first order of business was cancelling my medical cover which was to expire in February, is there a law that protects me from such an action?

    1. Anne Babu says:

      If the company is in liquidation then it is quite understandable for such action to be taken because the company cannot meet its financial obligations and is in the process of being wound up.

      1. Emmanuel Oduor says:

        Hi Anne

        Thank you for your insight for the above. I wish to seek clarity on severence pay. the law says 15 days minimum pay for the number of years worked. Does this mean it’s calculated on the number of months worked or the exact years, Advise also on the pension payment on redundancy.

        Thank you .

        1. Anne Babu says:

          Severance is based on each completed year of service. Pension payments depend on the rules of the pension scheme.

  28. Japheth Shijenje says:

    Thank you for your presentations. What recourse does the employer have when an employee gives resignation notice and dies while serving notice or is incapacitated? Will the null and void rule apply?

    1. Anne Babu says:

      The dues for the days worked should be paid to the legal representative in the event of death and to the employee who is incapacitated.

  29. David Mwakidimi Msengeti says:

    Informative and well put. Thank you Ann

  30. PETER GICHANA says:

    Dear Anne,
    I needed to find out whether it is possible to change legal representation on a labor related matter mid-stream where it is my feeling that the representation is weak or is not pursuing the case any more ?
    Peter Gichana

    1. Anne Babu says:

      Yes, you have the right to representation of your choice at whatever stage of a case.

  31. Georgina says:

    Hello Anne,
    Great work. Quite informative. Keep it up.

    I worked for a relatively medium technology company as a CTO.
    Recently, our company lost a major client to competition. This meant the finacials would be affected. Some employees had been outsourced to specifically serve this client on site and on the field providing IT service desk and field support.
    On the 30th of april, after the client confirmed non renewal, staff were called in for a meeting on 1st may to be informed of the new developments. Staff were informed that some staff will have their jobs terminated. Those who had been outsourced to this client would be directly be affected, while those to be affected indirectly will be communicated to in a weeks time. In a nutshell, everyone was put on a month redundancy notice according to the CEO. Other than the outsourced team to the client, all the other staff were not certain who to be declared redundant. After the promised 1 week, no written communication was shared. On the 14th May, the affected staff were called to discuss their proposed redundancy. Only 3 of us were affected. No written notice letters were given to any of us on that day. We were told the letters would be available later. On 30/05/2018, the other two colleagues received their letters and receipt date was 30/05/18 while the letter was dated 04/05/2018. For my case, since was on leave, I went to the office on 31/05/2018 at 1540hrs to receive my letter, but he was not in despite having communicated to the CEO of my coming later in the day. Earlier on, I had twice tried to collect my letter but in all the visits, the HR was not in to hand in my letter. To date, I have not received my letter yet the employer insists that notice period was until end of may referencing the initial general staff meeting informing of loss of client and intended terminations on 1st May 2018. The company will be giving the standard severance of 15 days.

    1) How valid is the process. Does the verbal notice suffice for permanent staff?
    2) legally, which is the effective termination date? Is it end of may or end of June.
    3) what is the best way to engage the company management ? Labour office? How can get one?
    4) Now that have not signed a letter that takes effect on 31st May yet it’s already June, how does it affect me and the employer? Do I go ahead and receive highlight receipt date the effective day of collection say 06/06/2018.

    Kindly advice and do let me know f you can refer or help in my case.

    1. Anne Babu says:

      The notice should be written and it should be copied to the labour officer. You should receive it but clearly endorse the date of receipt. If the proper procedure is not followed, the redundancy is unlawful. You may seek the assistance of the labour officer to challenge the redundancy or raise a complaint through the company procedures or seek the assistance of a lawyer.

  32. Charles Hammond says:

    I believe my employer is trying to avoid termination by redundancy and instead has produced a “Mutual Separation Agreement & Release” for me to sign. Can you please tell me whether in Kenya a “Mutual Separation Agreement and Release” (known I believe as a Compromise Agreement in the UK) needs, in order to be valid, an employee to have received independent legal advice on the settlement/agreement terms and that normally, it is the employer who would pay for that capped at so many hours advice/total fee of the lawyer selected by the employee? I understand this is the case in the UK.

    Also, if I may, does redundancy notice need to be given in writing? Lastly, the additional payment of 15 days per completed year worked, does this equate to 50% of a month’s salary (or should benefits in kind also be included?) and what happens if you are 1 week off completing a 3rd year?

    1. Anne Babu says:

      The terms of a separation agreement must be mutually agreed. Kenya does not have laws similar to those of the UK.
      A redundancy notice should be in writing and should be copied to the labour officer. The employer is only bound to pay for complete years worked. Your computation is correct.

  33. Marie Chege says:

    Dear Anne,

    Your article is insightful.

    Is severance pay due for employees who are on fixed term contracts who are declared redundant after their first year of contract.

    Further, does severance pay apply for an employee on fixed term contract who is released on account of redundancy yet the employer is contributing pension for him/her.

    Lastly what dues should an employer pay to an employee on fixed term contract who was released on account of redundancy. Is it severance pay or the remainder of the contract?

    1. Anne Babu says:

      Severance is paid for every full year worked. If the contract is for more than one year and redundancy is declared after a full year is worked then severance is payable in addition to pension – pension is not a mandatory statutory entitlement, it only applies if it’s provided in the employment contract.

  34. Bernard says:

    Anne have enjoyed reading while looking answers to an impending situation,I work for a well recognised private security company and the company has already shown interest of retrenching some non union employees ,my concern is :my line manager has not appraised nor graded me as per the company given guidelines and have not served under him for a year.what is your take on this issue .Have worked for this company for 12 years now.currently I’m seconded as a project manager to one of the key goverment transport sector where my performance is so impressive.Kindly advise.

    1. Anne Babu says:

      The burden will be on the company to prove that you have a performance issue, should the company pick you as one of the affected employees.

  35. Tabitha Oyugi says:

    Good afternoon Madam,

    Thank you for your ever educative articles. I need your assistance. We need to lay off an employee on retirement basis. What is the best way of handling the issue /what does the law say about this.



    1. Anne Babu says:

      Thank you for your kind words. Retirement for those in the private sector is determined by the organization’s terms and conditions of service – both in regards to retirement age and pay-outs.

  36. Graham Mwenda says:

    This is a very good read and its free, thanks Anne.

    1. Anne Babu says:


  37. Jack says:

    Well written and informative article Anne.
    By when should the employer pay the severance payment to the employee? Is there a timeline?

    1. Anne Babu says:

      Thanks. The severance should be paid on the last day of employment, though most times employers pay with the next payroll.

  38. Harriet Dodd says:

    In the case of reduction of a large team of similar posts can competition for remaining roles form an alternative to targeted redundancy?

    1. Anne Babu says:

      No, you need to select who to keep and who will be affected based on an objective criteria. You can consider a voluntary early retirement scheme first then the redudancy. Competition is ok where they are competing for new roles.

  39. kerry. says:

    i was given a redundancy notice, at my former work place. then on the same month it was revoke cause i reached my target. after 3 months on the last day of that month i was given a termination later n told not to report to work. i had worked there for one year. 6 months probation and 6 months on permanent contract. i was not given any money, only pay for that last month i worked there. kindly advice if this is appropriate way to handle this mater?

    1. Anne Babu says:

      I suggest that you see either a labour officer or a lawyer to demand for your dues. Based on what you have stated, your termination was unlawful. You are entitled to compensation as well as terminal dues – a months’ notice and accrued leave.

  40. Hi Anne,
    Kindly clarify for me. When I am computing the severance pay or paying annual leave in cash, do I base the calculation on Basic or Gross Pay?

    With Thanks

    1. Anne Babu says:

      Gross pay.

  41. G. S. Fwambah says:

    Much thanx Anne
    Am much informed now

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