Genuine business pressures sometimes require a reduction in staff. Kenyan law does not prevent retrenchment, but it prescribes a sequence, and employers who skip steps routinely find themselves defending claims at the Employment and Labour Relations Court. The procedure under the Employment Act 2007 is summarised below.
What steps must an employer follow before declaring a redundancy?
The Act treats redundancy as termination for operational reasons, and the following conditions apply before any position is declared redundant:
- Confirm the operational reasons and the number of positions affected
- Notify the affected employees personally in writing, or their trade union, of the reasons for and extent of the intended redundancy
- Notify the labour officer not less than one month before the terminations take effect
- Apply selection with due regard to seniority in time and to the skill, ability and reliability of each employee in the affected class
- Pay off accrued leave in cash
- Give not less than one month’s notice, or one month’s wages in lieu, and pay severance
How much redundancy pay is an employee entitled to?
The Employment Act 2007 provides for severance pay at the rate of not less than fifteen days’ pay for each completed year of service. Where the contract or a collective agreement provides for better terms, the better terms apply. Employees with less than a completed year still receive accrued leave pay and the notice entitlement described above.
What happens if the process is challenged?
The ELRC examines both the validity of the business reason and the fairness of the procedure. Notice records, selection notes and consultation minutes become the evidential backbone of the employer’s case. Where selections are contested, early legal review is a proportionate step, and structured negotiations can resolve most disputes without a full hearing.
A note on communications
Redundancy exercises affect the employees who remain as much as those who leave. Clear, lawful communications reduce anxiety and the risk of claims. Our governance advisory team assists with redundancy planning, and our ADR practice supports structured consultations where relationships are strained.
This article was written by Charles Muriu Mathenge, who advises businesses, HR directors and boards on corporate and commercial matters at CS Advocates LLP.
For guidance on your specific situation, contact CS Advocates LLP , call, WhatsApp, or book a confidential consultation at our Westlands, Nairobi office.