In brief
- Redundancy is the one termination the Employment Act scripts in advance: notice to the employee and the labour officer a month before, fair selection, and severance pay of fifteen days’ pay for every completed year of service, besides notice and leave dues.
- A redundancy that skips the script is an unfair termination, with the court’s full remedies behind it, and the courts have been unsentimental about restructurings that were really dismissals wearing a quieter name.
- For the employer the process is a month of discipline that buys a clean exit; for the employee the question is narrower, whether the procedure was followed and whether the money is right, and both are checkable against this guide.
Redundancy is where employment law meets arithmetic. A role is no longer needed, the business must shrink or reorganise, and the law does not stand in the way of either, because no statute obliges a Kenyan employer to keep paying for work that no longer exists. What the law does instead is prescribe exactly how the exit must happen, and the prescription is strict precisely because the ground is open to abuse. This guide walks the process from the employer’s first board minute to the employee’s final cheque, and it is written deliberately for both readers, the employer planning a restructuring that must hold, and the employee holding a declaration letter and wondering whether what is happening to them is lawful.
What makes a termination a redundancy
A redundancy is the loss of employment through no fault of the employee, because the position itself has become superfluous, through reorganisation, technology, economics or closure. That definition carries its own test: it is the post that goes, not the person. An employer who declares a role redundant and advertises the same role under a new title within the quarter has not restructured, it has dismissed, and the disguise converts a lawful exercise into an unfair termination claim with the remedies discussed in the previous article in this series. The first question in every redundancy dispute is therefore the honest one, did the work really disappear, and both sides should answer it before anything else is argued.
The procedure the Act prescribes
The Employment Act sets conditions an employer must satisfy, and the courts treat them as conditions, not suggestions. Written notice of the intended redundancy must go to the employee and to the local labour officer at least a month before the termination takes effect, and where the employee is unionised, to the union. The selection of who goes must be fair, having regard to seniority in time and to skill, ability and reliability, which means an employer choosing among comparable employees needs criteria it can defend and a record of applying them. The employee leaves with leave pay for days accrued, not less than one month’s notice or pay in lieu, and severance pay at the statutory rate. Beyond the letter of the section, the courts have read the month of notice as serving a purpose, which is genuine engagement, an opportunity for the affected employees to be heard on the selection and the alternatives before the decision is irreversible, and the employer who treats the month as a countdown rather than a consultation builds its own case against itself. A collective agreement may improve any of these terms, and where it does, the better term governs.
The money, and the fifteen days that confuse everyone
Severance pay is the signature entitlement of redundancy, fifteen days’ pay for every completed year of service, and it belongs to redundancy alone. It should not be confused with service pay, a different creature that arises on other terminations and is displaced where the employer was contributing to the NSSF or an equivalent scheme; severance on redundancy is not displaced by NSSF contributions, and the employer who nets it off has underpaid. The computation runs on the employee’s pay at termination, completed years count and part years do not, and the dues stack rather than substitute.
| Illustration: gross pay KES 90,000, six completed years of service | KES |
| Severance pay, fifteen days’ pay for each completed year of service | 270,000 |
| One month’s notice, or pay in lieu | 90,000 |
| Accrued leave pay, say ten untaken days | 30,000 |
| Illustrative total before tax, excluding any unpaid salary | 390,000 |
As with every termination payment, the dues are employment income and are taxed accordingly, a point both sides should price into any negotiation, and the figures ride on gross pay, which the payslip series of these articles explains from end to end.
If you are the employer, the discipline that makes it hold
A restructuring that will survive scrutiny is documented before it is announced. The business case first, in writing, because the court that later asks why will be answered from the file, not from memory. The pool of affected roles defined honestly, the selection criteria settled before names are discussed, and the scoring kept. The notices to the labour officer, the union where there is one, and each employee, dated and delivered a clear month before the end. The month used for what it is for, meetings held, alternatives such as redeployment or reduced hours genuinely considered, and the record showing it. The dues computed, the certificate of service prepared, and everything paid on or before the last day, because an employer who holds the severance hostage to a discharge voucher invites exactly the claim it was trying to avoid. None of this is heroic; it is a month of administrative discipline, and it is radically cheaper than the alternative, which is defending twelve months’ compensation per employee, multiplied by the cohort, for a process that failed on paperwork.
If you are the employee, the two questions that matter
Was the procedure followed, and is the money right. Take the letter and the dates and check the month. Ask what criteria were used to select you and who else was in the pool, because you are entitled to a selection that can be explained. Recompute the severance against your years and your gross pay using the table above. Confirm the role has actually disappeared, and keep an eye on the employer’s advertisements in the months that follow. If the answers fail, the redundancy is an unfair termination and the claim must be brought within three years, though the practical advice is the same as in every employment dispute, move early, keep the documents, and do not sign a full and final discharge without advice. And if the answers hold, take the dues with a clear conscience, because a lawful redundancy is not a wrong, it is the system working as designed in a hard moment.
What happens next
Restructurings come in waves, and each wave produces the same disputes a year later. The next article in this series turns to the workplace that is watching its employees, CCTV, biometrics and monitoring under the Data Protection Act, which has quietly become the newest source of employer liability in Kenya. For the terminations this article covers, the firm acts on both sides of the table, in the planning and in the dispute.
Frequently asked questions
What is the difference between severance pay and service pay?
Severance pay arises on redundancy, at fifteen days’ pay per completed year of service, and NSSF membership does not displace it. Service pay arises on certain other terminations and is excluded where the employer contributed to NSSF or an equivalent scheme. Employers regularly confuse the two in the employee’s disfavour.
How much notice does a redundancy require in Kenya?
Written notice of the intended redundancy to the employee and the local labour officer, and the union where one exists, at least one month before the termination, plus the employee’s contractual or statutory notice of one month, or pay in lieu.
Can a redundancy target just one position?
Yes. A single post can genuinely become superfluous. But where several employees hold comparable roles, the selection among them must be fair on seniority, skill, ability and reliability, and an employer who cannot explain why you and not another has a problem.
Can my employer hire someone into my role after declaring me redundant?
Not without undermining the redundancy. If the same work reappears under a new title shortly after, the termination looks like a dismissal in disguise, and the courts treat it as unfair termination with the full remedies that follow.
I think my redundancy was a sham. How long do I have?
Three years from the termination, as with any employment claim. The evidence that proves a sham, the adverts, the new hires, the unchanged workload, accumulates in the first months, so start collecting it now and take advice early.
Peter Maina is a Partner of Peter Maina & Company Advocates. This article states the law as at 14 October 2026. It is general information, not legal advice. For the planning of a restructuring or the challenge to one, reach out on e-mail peter@pmlaw.co.ke or WhatsApp +254 714 644 080.
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