Understanding Termination of Employment in Kenya: What You Need to Know

Termination of employment marks the end of a contractual relationship between employer and employee, requiring adherence to legal procedures and safeguards (Photo: freepik.com)

Losing or ending a job can be a stressful experience for both employees and employers. In Kenya, the Employment Act, 2007 provides clear rules on how termination of employment should be handled. Whether you are an employer planning to let someone go, or an employee facing termination, it is important to understand your rights and obligations.

What Does “Termination of Employment” Mean?

Termination simply means ending the contract of service between an employer and an employee.

This can happen in different ways:

1.By notice – either party (employer or employee) gives the required written notice.

2.By payment in lieu of notice – instead of serving notice, the employer pays the employee for that period.

3.Summary dismissal – an employer ends the contract without notice due to serious misconduct.

4.Expiry of a fixed-term contract – when the agreed contract period comes to an end.

5.By mutual agreement – both parties agree to part ways.

Fair and Unfair Termination

Not every termination is fair. The law requires that an employer must have a valid reason and follow fair procedure.

Valid reasons include poor performance, misconduct, redundancy, or incapacity due to illness.

Fair procedure means giving the employee a chance to be heard before dismissal.

If termination is done without following these requirements, it may be considered unfair dismissal, and the employee can claim compensation.

Rights of Employees During Termination

When employment ends, employees are entitled to certain benefits depending on the circumstances:

1.Notice pay – if no notice was given.

2.Accrued salary and allowances – for days worked.

3.Leave pay – payment for any outstanding leave days.

4.Service pay or gratuity – in cases where applicable.

5.Redundancy pay – where employment ends because the job has become unnecessary.

Employer’s Responsibility

Employers must:

1.Provide clear reasons for termination.

2.Give the employee a chance to explain or defend themselves.

3.Pay all dues owed at the time of termination.

4.Follow the correct redundancy procedures where applicable.

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Termination of employment is a sensitive process that must balance the rights of both employer and employee. The key is fairness and compliance with the Employment Act, 2007. For employers, following the law protects against costly disputes. For employees, knowing your rights helps you seek justice if treated unfairly.