Redundancy means 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. Redundancy may occur under various circumstances including and not limited to:
- Closure of a plant, factory, mine, or other workplace, with the total or near-total loss of jobs.
- Job losses arising from a reduction in staffing requirements due to efficiency gains or falling demand for the company's products or services.
- Job losses arising from a downsizing in operations or restructuring of the workforce following, for example, privatisation or merging causes.
Redundancy results in severance of the legal relationship of a worker and employer as it existed immediately before the circumstances that brought about the loss of job.
What should I do, as an employer, if I plan to undertake redundancy?
The Employment Act, section 40 specifies matters of redundancy to an employer who is contemplating or planning to carry out redundancy:
- Where the employee is a member of a trade union, the employer should notify the union concerned and the labour officer in charge of the area where the employee is employed of the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy.
- Where an employee is not a member of a trade union, the employer should notify the employee personally in writing and the labour officer.
Is an employer supposed to pay the worker who is affected by the redundancy?
Yes. The worker who is affected by the redundancy is entitled to be paid by the employer prior to the close down, re-arrangement or amalgamation. Payments stated are:
- The accrued leave days due to an employee who is declared redundant, paid off in cash.
- Not less than one month’s notice or one month’s wages in lieu of notice.
- Payment of severance pay at the rate of not less than fifteen days pay for each completed year of service.
What should an employer consider in determining the terms and conditions of employment of a worker who has suffered diminution?
The employer should take into account the past services and accumulated benefits, if any, of the worker in respect of the employment. The employer should consider the seniority and the skill, ability and reliability of each employee affected by the redundancy.
How do I, as an employer, establish the redundancy pay and terms and conditions of payment of affected workers?
The redundancy pay and the terms and conditions of payment are subject to negotiation between the employer or representative of the employer on the one hand and the worker or the trade union concerned on the other.
Where should an employer make a complaint in case there is a dispute regarding the redundancy pay and the terms and conditions of payment?
An employer may refer any dispute concerning the redundancy pay and terms and conditions of payment to the labour officer or industrial court (section 87).
Are there any particular categories of workers who should not be covered by the redundancy pay and other terms of conditions?
The following categories of workers are not covered:
- Workers under a probationary contract. This contract should not be more than six months.
- Workers engaged under a contract of employment for a specified period of time or for specified work.
- Workers engaged on a casual basis.
Find out about Minimum Wages in Kenya.