One question that still gets asked quite a little bit is whether an employer can lawfully terminate an employment contract by giving the prescribed contractual notice without going into issues surrounding the employee’s performance or misconduct or whether a summary dismissal can be effected immediately the gross misconduct is discovered.

The answer is ‘no’. Even with the existence of a termination clause, the employer is still required to accord the employee a disciplinary hearing prior to termination or dismissal.

In Sammy Walter Birya v Shree Swaminarayan Academy [2016] eKLR the Industrial Court held as follows regarding this issue: –

“Termination clauses contained in contracts of employment…are to be read together with the core termination provisions contained in Section 40, 41, 43, 45 and 47 of the Employment Act. Read alone, the result would be that termination is at the will of the Employer. As long as notice issues, or notice pay is made available, termination would be fair and lawful, and the rest of the provisions of the law mentioned above, would be meaningless. There would be no obligation on the part of the Employer to prove the reasons for termination under Section 43, 45 and 47 of the Act, and fulfill the demands of procedural fairness under Section 41 and 45 of the Act. Termination Clauses must therefore conform to these provisions…otherwise the whole termination law would be thrown back to the years before 2007, when Employers could terminate at will, for good reason, bad reason, or no reason.”

Eraser changing the word unfair for fair

In Kenfreight (E.A.) Limited v Benson K.Nguti [2016] eKLR the court held as follows: –

“Apart from issuing proper notice according to the contract (or payment in lieu of notice as provided), an employer is duty-bound to explain to an employee in the presence of another employee or a union official, in a language the employee understands, the reason or reasons for which the employer is considering termination of the contract.  In addition an employee is entitled to be heard and his representations, if any, considered by an employer before the decision to terminate his contract of service is taken.”

In finding the Respondent was unfairly terminated, the court in International Planned Parenthood Federation v Pamela Ebot Arrey Effiom [2016] eKLR stated as follows: –

“Despite having issued proper notice by payment in lieu of notice, the appellant failed to discharge its duty to explain the reasons for termination thereby denying the respondent an opportunity to make any representation on the matter. This was an unfair procedure which leads us to conclude that the termination was unfair.

All cases can be accessed at http://kenyalaw.org/caselaw/.

***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. caroline says:

    Hi Anne,

    Thank you for your advice.

    Please advice on service pay or terminal benefits under the following scenarios if it apply:
    -Employee was terminated after working for 4years due to poor performance this was after a demotion
    -Employee resigned after 5 years this was because she was not performing which had led to demotion and even change of roles.
    – Employee resigned after receiving a warning letter.

    Thank you.

    1. Anne Babu says:

      Service pay is payable if the employee is not on NSSF.

      For the rest: –

      1. Notice pay, accrued leave and any other contractual payments.
      2. Pay up to the last day as an employee, accrued leave and any other contractual payments.
      3. Same as 2 above.

  2. Niladri B says:

    Dear Anne,

    Kindly advice for Below

    I am on a contract of 2years work permit ending sep2018 and i am officially on a two months notice period as per the appointment and offer letter termination policy. My employer is asking me to pay for the balance amount for the contract term left which they paid to take the work permit approx 150000 KES. Also they want me to book my own ticket back home, I haven’t signed any contract officially nor is this term mentioned in the appointment letter anywhere. How should i go ahead?

    1. Anne Babu says:

      You should only refund the work permit fees if that was agreed in a contract. Similarly, your employer is only required to pay for your ticket back home, if that was agreed in a contract.

  3. Emily says:

    Dear Anne,
    My boss has decided to put me on performance plan triggered by an incidence where she gave instructions to a third party which was not relayed to me. I rejected the performance plan terming it unfair however ahe has stood her ground that I am on the performamce development plan.

    I met our Human Resource and explained my predicament.My boss calls the shots in the company and by me rejecting the performance plan she is trying to look for ways to pin me down and working is becoming unbearable.

    My question is,what options do I have?can I be put on performance plan by force against my wishes?how do I deal with a malicious boss who will stop at nothing to ensure you ho home?

    1. Anne Babu says:

      Read through your contract and HR policy on performance management and when one can be placed on pip. If your cause of grievance is valid, raise a grievance through the company provided channels.

  4. Shamalla says:

    Hi Ann,
    I was fired in the 5th month of my 6 months probation. On asking my employer to prove the allegations,he gave me other reasons (verbal) which he felt lead to the dismissal. If I am sure that the allegations labelled against me are untrue and I can prove that,can I successfully sue?

    1. Anne Babu says:

      Yes – see the articles we have done on the subject of probation.

  5. LEYLA says:


    If my employee serves me with a resignation in a small NGO, DO I pay 3months or 1 month salary

    1. Anne Babu says:

      What does the contract say regarding notice period?

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