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Redundancy dos and donts
1 year ago
Redundancies have been quite common in today’s economy. This article looks at a recent case with the view of extracting relevant principles on the subject.
We will study the case of Barclays Bank of Kenya Ltd & Another vs GM & 20 others, Civ App No 296 of 2016. The case was determined by the Court of Appeal on 16th March 2016.
The claimants were former employees of Barclays Bank of Kenya (BBK) who had been seconded to work for Barclays Africa Group Limited (BAGL). BAGL is a South African registered company which holds shares in BBK. They were declared redundant when BAGL ceased operations in the country. The court reiterated the following important points to note regarding redundancies: –
- An employer must state the reasons for and the extent of the redundancy in the notices issued to affected staff, the labour officer and the trade union;
- It is for the employer to justify the validity and genuineness of the redundancy;
- An employer is required to consult employees prior to a declaration of redundancy, this, according to the judges, resonates with our Constitution and international laws/best practices, specifically Article 41 by which every employee is entitled to fair labour practices and Recommendation No. 166 of the ILO Convention No. 158 which provides for consultation and mitigation of the effects of a redundancy;
- The purpose of the consultations is for the parties to discuss and negotiate a way out of the intended redundancy, if it is possible, or the best way of implementing it if it is unavoidable;
- The consultations must be real and meaningful and not a charade;
- A redundancy notice that is not served on the labour officer is invalid.
You now stand guided!
THANK YOU!
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Thank you for highlighting that the labour officer must be served and I believe that the same should happen during retrenchment and summary dismissal.What is your take on that counsel?
A retrenchment and a redundancy are the same and therefore the same rules apply. I confirm that notice to the labour officer is also required in the event of summary dismissal.
My heart bleeds every time I hear of labour injustices. As dumb as firing individuals in the morning without notice or pay in lieu. Or the denial of leave. All because the employees do not know what they are entitled to. Your writing sheds light on these. Sharing is my pleasure.
Congrats on that nomination. My vote is in the basket.
Thank you very much.
Thank you Ann for the info.
Your interview yesterday on Ebru TV Kenya was amazing. I learnt alot
All the best in your coming plans……
You are most welcome.
I have voted for your blog Ann babu
Thank you very much
Thanks for this and other informative articles. I have cast my vote.
Thank you very much.
Redundancy – does the employee accrue leave during the notice period? And how should be the rate of annual leave be calculated in the case of working a 36 hour week? It was full days during the week and not weekend. I ask as it was calculated based on a 30 working month.
Leave is accrued during the notice period. Your second question is not clear.
Hi Anne,
Thanks for good work you are doing.
Please advise retrenchment procedure in accordance with labor laws and kindly base on incase:-
*Employer does not clearly state the nature and reason for Retrenchment.
*Employer refuses to pay gratitude.Thanks in advance.
Best regards,
Danstun
Retrenchment and redundancy are one and the same thing and therefore the same procedure applies. The reasons for the redundancy should be stated and justifiable. Payment of gratuity is not mandatory. The employer is only obliged to pay severance which should not be less than 15 days pay for every year worked.
Hi Anne,
Receive my vote with verification Code 610046.All the best.
Thank you.
Much appreciation Ann for your tremendous enlightening.
Count my vote in, you deserve.
Thank you so much.
I have voted Anne. Thumbs up and all the best dear.
Asante sana.
Hi Anne Babu.
I like your blog. Very nice. I have voted for you.
Consider writing about VERs.
Regards
Kamunya
Thank you. I will be doing a post on VERs very soon.
Very enlightening thank you so much. Keep up the spirit
Hi Ann,
This is very informative.
I do however have a question.
What is the correct process on a partial redundancy? By that I mean that an individual has two roles and one role is being made redundant. The management has only verbally notified the employee and advised that redundancy of the role should be effective over the next 8-12 months and not immediately.
In the meantime the individual has been assigned another role and told to stop all tasks of the “redundant role”
What should the individual do and is this the correct HR /legal process?
The job description provides for 2 roles and one has been scrapped?
It was an additional role. So as an example the person was handling Customer Service as a core role and then later an additional role (which used to be handled as a managerial role) was added such as Business analyst.
So in effect the roles are two. Customer service and business analyst manager.
So the management combined the roles to be done by one person.
The current role should be declared redundant and her redundancy dues paid, leaving her with the option to apply for the new role that does not have the redundant roles.
Thanks Anne, this is very enlightening. Please advice, what would be the procedure for fixed term contacts common with NGOs. Is it in order to issue end of contract notice and terminate contracts without consideration for the redunduncy pay
A fixed term contract ends at the end of the term. There is no redundancy and therefore no severance is paid. A notice of non-renewal may be issued prior to the end date but it is not mandatory.
Hi Ann, Please enlighten me on how leave pay should be calculated and on a law that points out regarding leave pay calculation. Taking into consideration of 24 leave days in a year-employee earns 2days each month. working days monday to friday 8-5 and Saturday 8-12. in he private sector – wireless telecommunications private company
Hi Dianah, there is no law that gives a formula for computing leave pay. You are supposed to compute the daily rate then multiply by the number of days.
1. Can a company recruit for positions that were declared redundant within the same year? what is the cooling off period before the company re-hires?
2. What are the provisions of the employment act with regards to leave days? can the company force the employee to forfeit leave days if not taken during the period that they are earned especially when determining redundancy pay?
There is no specified period but the burden lies on the company to explain why they are doing a fresh recruitment so soon after the redundancy.
Section 28 of the Employment Act deals with leave days. Ideally, leave days should be paid off on termination and should only be used during the notice period with the employee’s consent.
A group of employees are within the redundancy criteria, although employer unwilling to release and pay them due to the fact they are 2years to retirement, whilst they are willing to be rendered redundant.
The employees cannot compel the employer to declare them redundant.
Go there.. very informative topic..thanks and God bless you and rewatd youfor this…
I was given a letter stating my job is now redundant with one month notice ..letter stated they would pay my dues …description for reduncy was for a job area I never held..was told to hand over all files and computer files were cooid by tge it deot immeduately from my laptop immediately and could leave and would be called if necessary within the one month notice ..no dialoge or indication given earlier of this impending termination . .just suddenly called in. Hairmans office and was told my duties were relieved and given letter and it dept supervisor and another staff called in to take over my duties… dont think the labour office was notified. I believe they wanted to get rid of me under the pretext of redundancy.. I am over 60 years old with 10 years service in a key financial position .. i think it was like withhunting for sometime to get me out …..i have never been told my jod is at stake..with no cause or letter on poor performance or any warning letters in any areas of my work in the 10 years ..I believe to be a case of unfair dismissal and termination without due cause and without taking into account of seniority ..my work was distributed to other staff so I believe the question of position becoming superflous does not arise as the job responsibilities are also currently still in place being handled by other staff. i have gardly fallen sick or been on extended medical leave during my tenure.Please advise if they can make me redundant without due cause and diligence. and if i can claim compensation for unfair unprocedueal and unlawful termination yndet the pretext of so called redundant position. By the way..so uou have representative office in Mombasa Regards
If your position no longer exists then that is a redundancy – even if your duties have been distributed to others. The question is are you the only one in the job category? If not, why were you selected over the rest? You may need to speak with a labour officer or lawyer to determine if the selection process was unfair.
A current job’s role is expanded and merged with another, during a redundancy notice period, then its advertised. What is the fate of the incumbent if they do not apply since they feel the new JD is huge for them?
They will be declared redundant.
Dear Anne,
If one is declared redundant in December, Is it right for the company to rehire the same person in the same position? I think the employee can even choose to sue the organisation.
The essence of a redundancy is that the job is no longer required. To hire someone else in that position shows that the redundancy was not genuine.
In Jan 2018 we were declared redundant in aga khan university hospital. But immediately, our position were taken by outsourced employees. If our position still exist why were we declared redundant? What is the difference between retrenchment and redundancy?
The basic point with outsourcing is that those jobs do not exist within the structure of your former employer, hence, there is nothing wrong with that.
Hi Anne,
Thanks for a very informative article on Redundancy.
My question is – must the process take 1 month between notification by the employer of the intended redundancy and the confirmation of redundancy? Can the employer close the process within 2 weeks?
The law provides for one month as the minimum.
We have a situation that due to budget cuts, we had to let go of some staff. But now due to some recent requirements, we would like to keep them. What is the process here?
The staff are not too favourable in staying as they believe that they are still eligible for the gratitude payment etc? won’t this be cancelled as we want them to continue with us?
How far along in the redundancy process have you gone? Have you already issued the termination notices?
Thank you so much Anne for this informative platform.
Questions:
1. If a company is making contributions for its employees to a Pension Scheme other than NSSF, does it mean that the company’s employment terms to its employees automatically translates to permanent and pensionable terms?
2. If an Company is making contributions for its employees to a pension scheme, are employees still eligible for severance pay at their time of leaving?
3. For employees on contract terms of employment, for instance an employee on a four year renewable contract and has renewed the contract twice , how do you compute service pay?
Kind Regards,
Joyce Maina.
Hi,
1. No – an employee is only permanent if that’s indicated in their contract
2. Severance is only paid if an employee looses their employment on account of redundancy. Service pay is only paid if an employee is not a member of NSSF. It will definitely not be paid if the employee is a member of a pension scheme. Don’t confuse severance pay with service pay
3. As indicated in the contract or 15 days pay for every year worked. It is not payable if the person is on NSSF unless indicated otherwise in their contract.
I have a case of a small family business shop that had been in operation for 25 years had not been running on (major) losses for the last 6 years or so years, which eventually led to closure in mid April 2019. the shop had 4 staff who had worked for 23yrs, 17yrs, 4yrs, and 1.5yrs. they were already paid their April Salary. we are told that we need to pay redundancy notice, severance pay and leave accrued. please advise if that is the case and how severance will be calculated.
Severance is 15 days pay for every year worked. See a labour officer or labour lawyer to assist with the claims.
*correction: had been running on (major) losses
Good morning I was inquiring whether I have a case of unfair termination on account of redundancy, I was given a redundancy letter at the 30th day of the month at 5pm in the evening, the same day was my last working day and was told to clear and hand over the company property, When I went to report to the labour officer, the notification had not even reached him, It was latter delivered on 6th of the following month (all this documented).
My title was an HRO we were three of us with an HR Assistant, the HR Manager who declared me redundant had just joined two weeks in the company, in the letter it stated that the company was restructuring and therefore my position had been declared redundant.
My question is was due process and proper procedure followed.?
The company should be able to justify legally why you were picked over the other members of the HR team.
Hello Anne,
In the case of a yearly fixed term contract which has been renewed for more than 5 years and the employer suddenly gives notice of non renewal not to one but 11 employees at once and not giving any reason for non renewal. Could this be redundancy/retrenchment?
There is no expectation of renewal of fixed term contracts. The employer can decide not to renew them at any time.
Madam Anne Babu,
Your insights are such a great welcome to the HR professional and employees in particular.
We are more enlightened and understand our rights better.
I am in the process of outsourcing and declairing the whole department so that we can achieve efficiency. Your comments have been of immense and tremendous help. Thanks again
Thanks Anne. Glad to be of help.