Redundancy process in Kenya.

By Felgona Atieno | Brenda Ogera

Sec 2 of the Employment Act defines redundancy 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 simple terms, redundancy refers to the involuntary loss of employment through no fault of the Employer or Employee and mostly occurs when the Employee’s skill is rendered superfluous to the Company’s needs.

When declaring redundancy, Employers have to note the procedures set out in the Employment Act. Certain stake holders have to be notified of such decisions. Sec 40 (1) (a) stipulates that if the Employee is a member of a trade union then such union should be notified together with the Labour Officer at least one month prior to the date of termination on account of redundancies. Where the Employee is not a member of a trade union, sec 40 (1) (b) stipulates that the Employee and Labour Officer be notified personally in writing.

Sec 40 (1) (c) of the Act further provides that Employers have to have due regard as to seniority in time and skill, ability and reliability of each Employee of the particular class of Employees affected by the redundancy. Where there exists two or more Employees to be affected by the redundancy process, then the one who came in later as to employment is essentially the one to go.

Procedurally, when declaring a position redundant, the following steps have to be followed.

  1. Notify all Employees of the Company’s intention to declare redundancy. This is to allow for negotiations between the Company and Employees. The purpose of this notice is to give the Parties an opportunity to consider measures to be taken to avert or minimize the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment. Such consultations must be genuine.
  2. Provide grounds for declaring redundancy. Some of these grounds include but are not limited to the Company’s inability to sustain its Employees wages and salaries, the Employees skill being superfluous to the Company’s needs, the company’s closure of business, the Company’s merger and or acquisition etc.
  3. Select and notify the Employees affected. This should be done in a fair manner and the Employers should not use such opportunities to get rid of Employees they do not like. The decision to declare them redundant and the reasons thereof should be indicated in their termination letters.

Employees declared redundant have a right to be paid their leave days not taken in cash and severance pay of not less than 15 days’ pay for each completed year of service. The Employer also has to pay the Employee declared redundant not less than one month’s notice or one month’s wages in lieu of notice.

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