An employer in Kenya cannot simply call a dismissal “redundancy” and send you home. Redundancy is lawful only if the employer follows the procedure set out in the law. If it skips those steps, the termination is unfair, and the most a court can award as compensation for unfair termination is twelve months’ gross wages.
What redundancy actually means
Under the Employment Act, 2007, redundancy means losing your job through no fault of your own, because the employer no longer needs the role. Poor performance or misconduct is something different. The label alone does not make the termination lawful.
The steps the employer must follow
Section 40(1) of the Act makes a redundancy lawful only if the employer does the following:
- Written notice of at least one month to the employee, and to the labour officer (and to the union, if the employee is a member).
- Fair and objective selection criteria for deciding who goes.
- Payment of accrued leave.
- One month’s notice or pay in lieu of notice.
- Severance pay of at least 15 days’ pay for each completed year of service.
If your employer says your job is gone, check whether you received a written notice, whether anyone explained how people were chosen, and whether your leave, notice and severance were dealt with.
What the twelve-month cap means
A redundancy that skips these steps is treated as an unfair termination under sections 43, 45 and 47. Section 49(1)(c) allows the court to award compensation of up to twelve months’ gross salary, alongside other remedies such as notice pay.
Three points are worth remembering:
- Twelve months is a maximum, not an automatic award. A court decides what is fair in each case.
- The cap is measured on gross wages, meaning pay before deductions, not the net amount that reaches your phone or bank account.
- Compensation is awarded by a court after a claim is made. It does not happen on the spot when you are told to leave.
Practical steps
- Keep copies of your contract, payslips and any letters or messages about your exit.
- Ask for the reasons and the notice in writing.
- Speak to an advocate, your union or the labour office early, because your own situation may differ from the general rule.
The Employment and Labour Relations Court has been asked to apply these rules in union claims, and decisions can be appealed. The safest guide remains what the Employment Act itself says.
📚 Kenya Engineering Workers Union v M/S Garage and Industry Ltd [2026] KEELRC 14694 (KLR)
Entertainment and general information, not legal advice. For advice on your own situation, speak to an advocate.