TERMINATION OF EMPLOYMENT CONTRACT

TERMINATION OF EMPLOYER – EMPLOYEE RELATIONSHIP

Termination of contract means ending the employment relationship between employer and employee.
It can be lawful or unlawful depending on the procedure and reason .

 The key laws that govern termination of contract of employment in Kenya:

WAYS IN WHICH TERMINATIONS CAN BE DONE

[Link] agreement

Its derived from the doctrine of freedom of contract the principles dictates that parties are free to
enter into binding contracts on their own terms with limited outside interference hence both parties
agree on the termination of contract and freely agree on the terms provided to end the contract of
employment and the agreement should be clear and voluntary and neither parties should be forced
to accept it .

[Link] of time

Refers to the automatic termination of an offer when specified period for acceptance has expired or
if no time is stated , after a reasonable period has passed. When a contract specifies the duration in
which the employer-employee relationship, the contract terminates upon the lapse of time. In
circumstances where there was no reference of time or the employment is described as permanent
being specified the duration of time is determined through reasonable interpretation of the contract
which is dependent on the custom or usage of the job.

[Link] notice

Typically this notice usually comes as a written will in the form of a written document that clearly
explains your decision to terminate the contract ,why you wish to do so, and on what grounds or the
other party giving desires or reasons for termination. The contract are usually upon expiry of the notice
terminated, in lieu of notice the other party that is terminating the business relationship usually has to
pay some amount of cash equally to the notice period that was provided by the time they were working
there before.

The primary function of the notice rule is to allow both parties to leave the relationship at no cost. The
length of the notice is intended to grant one or both parties some amount of monetary compensation at
the end of the relationship .section 35 of the Employment act provides on the periods of notice where a
contract of service is one not involving performance of specific work or it is without reference to time it
occurs in situations where contracts to have definite duration as opposed to fixed term contract it
becomes necessary for parties and for the courts through the technique of implied term to make
provision for termination by notice.

[Link]
The Employment Act defines it as loss ofemployment,occupational 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 the employees are superfluous and the practices commonly known as abolition of
office ,job or occupation and loss of employment .It usually occurs due to the closure of a work place or
enterprise or where excess labor in enterprise is laid off for economic reasons in such events the
employer is expected to make payment to the employee its determined by employees security ,salary
level and age .
The Employment Act section 40 outlines employer’s mandatory requirements for termination of
employment on grounds of redundancy. The obligations of the employer in declaring redundancy are, in
summary includes;
 -giving notice to the union or labor office at least a month by the employer before the process
commences.
 -If an employee is not in a trade union member, the employer should notify the employee
personally in writing and the labor office.
 -The employer should demonstrate he used criteria of seniority, ability and reliability for each
employee.
 -If here is a collective bargaining agreement, it should not be used to the disadvantage of an
employee.
 Employee to be given one month’s notice pay in lieu of notice.
 -Severance pay at the rate of not less than 15 days for each completed year of service.
 courts have repeatedly held that these conditions are mandatory, and the redundancy is to be
declared on positions and not employees.

[Link] of misconduct
Section 41 of the Employment Act provides that an employer shall, before terminating the employment
of an employee ,on the grounds of the misconduct ,poor performance or physical incapacity explain to
the employee in a language the employee understands, the reasons for which the employer is
considering termination and the employee shall be entitled to have another employee or a shop floor
union representative of his choice during this explanation.
Notwithstanding, even where there exists substantive ground(s) to justify a termination, the law obligates
the employer to observe certain procedural strictures to ensure the upholding of the broad principles of
natural justice in undergoing the termination process between them and the affected employee.
 The employer, while terminating a contract on the grounds of misconduct, has to:
 -Provide the employee with details of the accusations against them;
 -Allow the employee an opportunity to respond to the charges;
 -Allow the employee to be accompanied by a shop steward or co-employee of his choice during
the hearing process; and
 -Finally, provide the employee with a decision to either terminate or save the contract of
service.

Where the employer fails to do the above, termination is deemed unlawful. In law, the burden of justifying
the lawfulness of the termination, both in terms of whether there was a substantive ground to terminate
and whether the procedure for the release of the employee was adhered to, lies with the employer.
Critically, in any claim arising out of the termination of a contract, the employer shall be required to prove
the reason or reasons for the termination, and where the employer fails to do so, the termination shall
be deemed unfair.
Under Section 47(5) of the Employment Act, the limits of an employee’s burden of proof to a claim of
unfair termination are to place before the court prima facie evidence suggesting that a termination has
occurred and that the said termination lacks a substantive justification and or is procedurally flawed. Once
the employee makes a prima facie case, the burden of proof shifts onto the employer to justify the
termination.
[Link] dismissal

Section 44 of the Employment Act, 2007 stipulates when summary dismissal can occur, thus:
“Summary dismissal shall take place when an employer terminates the employment of an employee
without or with less notice than that which any statutory provision or contractual term entitles the
employee.”
Under the Act, an employer may dismiss an employee summarily when the employee has, by his conduct,
indicated that he has fundamentally breached his obligations arising under the contract of service.
Some of the lawful grounds that warrant the summary dismissal of an employee include:
 -Absenteeism by the employee from his place of work without leave of lawful cause;
 -Intoxication by the employee during the working hours;
 -Willful neglect to perform the work mandated to or improperly and/or carelessly doing the
work;
 -Use of vulgar and insulative language by the employee to the employer or fellow employees;
 -Where an employee knowingly fails or refuses to obey a lawful and proper command which it
was within the scope of his duty to obey, issued by his employer or a person placed in authority
over him by his employer;
 -Where in the lawful exercise of any power of arrest given by or under any written law, an
employee is arrested for a cognizable offence punishable by imprisonment and is not within
fourteen days either released on bail or on bond or otherwise lawfully set at liberty; or,
  -An employee commits, or on reasonable and sufficient grounds is suspected of having
committed, a criminal offence against or to the substantial detriment of his employer or his
employer’s property.

However, the above list is not exhaustive. An employer can summarily dismiss an employee on an account
outside those in the catalogue above by independently assessing factors such as the industry that the
Claimant was working in, the nature of the relationship between employer and employee, the alleged
conduct of the employee amounting to a fundamental breach of the employment contract by the
employee.
Though an employer can dismiss an employee, the employer must adhere to the stipulated procedures
and accord the employee a fair hearing. Below are the steps an employer should take before invoking a
summary dismissal of an employee: –
 -Before an employee can be dismissed for gross misconduct, the employer must thoroughly
investigate whether there is a basis for dismissal. The investigation report can be shared with
the employee before the disciplinary hearing.
 -If the employer believes there is a lawful case against the employee, they should communicate
their allegations and the grounds for allegations against the employee via a show cause letter
and be allowed to respond in writing.
 -Employees should be allowed to defend themselves in a disciplinary hearing. They have the
right to be accompanied by a colleague or trade union representative at this hearing. Advocates
are outlawed from representing a party before the hearing tribunal or before a labour officer
under Section 48 of the Act.
 -After the hearing, the employer should decide whether or not to proceed with the dismissal. If
they decide to dismiss, they should provide the employee with a written statement of the
reasons for dismissal, the date on which the employment will end, and information about the
right to appeal.
 -The employee has the right to appeal against the decision. The appeal should be heard without
unreasonable delay and ideally at an agreed time and place.

UNFAIR TERMINATION
A termination or dismissal is unfair if the employer does not provide and prove the reasons for the
termination, and neither does the employer adhere to the statutory procedure of the
termination. Under Section 45 of the Employment Act, a termination is unfair if the employer fails to
do the following: –
 Fails to prove the validity of the reason(s) for the termination;
 Fails to prove that the reason for the termination is a fair reason related to the employee’s
conduct, capacity, or compatibility;
 Fails to prove that the reason for the termination is a fair reason based on the operational
requirements of the employer; and,
 Fails to prove that the employment was terminated in accordance with fair procedure and did
not comply with rules of equity and justice.
 In deciding whether it was just and equitable for an employer to terminate the employment of an
employee, a Labour Officer or the Employment and Labour Court shall consider—
 the procedure adopted by the employer in deciding to dismiss the employee, the
communication of that decision to the employee, and the handling of any appeal against the
decision;
 the conduct and capability of the employee up to the date of termination;
 -the extent to which the employer has complied with any statutory requirements connected with
the termination, including the issuing of a certificate of service and the procedural requirements
set out in section 41;
 -the previous practice of the employer in dealing with the type of circumstances which led to
the termination; and
 -the existence of any previous warning letters issued to the employee.
 As an employer, you need to note that the following reasons do not amount to a fair termination:
–
 -a female employee’s pregnancy or any reason connected with her pregnancy;
 -the going on leave of an employee, or the proposal of an employee to take any leave to which
he was entitled under the law or a contract;
 -an employee’s membership or proposed membership of a trade union;
 -the participation or proposed participation of an employee in the activities of a trade union
outside working hours or, with the consent of the employer, within working hours;
 -an employee’s seeking of office as, or acting or having acted in the capacity of, an officer of a
trade union or a workers’ representative;
 -an employee’s refusal or proposed refusal to join or withdraw from a trade union;
 -an employee’s race, colour, tribe, sex, religion, political opinion or affiliation, national
extraction, nationality, social origin, marital status, HIV status or disability;
 -an employee’s initiation or proposed initiation of a complaint or other legal proceedings against
his employer, except where the complaint is shown to be irresponsible and without foundation
or
 -an employee’s participation in a lawful strike.

REMEDIES FOR UNFAIR TERMINATION
Where an industrial court or the Labour Officer determines the termination of an employee was
unfair, the following are the available [Link] the case of
 -A declaration that the employee’s termination was unfair and unlawful;
 -Compensation for the lack of notice, that is, payment of the employee’s wages, which they
would have earned had the employee been given the period of notice to which he was entitled
under this Act or his contract of service;
 -Payment for the wages of the work done by the employee before the termination;
 -Payment of damages for the loss occasioned to the employee from the dismissal date to the
expiry of the notice of termination had it been given;
 -Compensation with the equivalent of the employee’s monthly salary not exceeding twelve
months;
 -Reinstatement of the employee to their previous work position;
 -Re-engagement of the employee in a role that is comparable to their previous position, with
the same pay;
 -The issuance of a certificate of services, in which it is a criminal offense to give false comments
in the certificate;
 -Severance pays at the rate of not less than 15 days for each completed year of service;
 -Payment of service pay, where the employee was not under any form of social security scheme;
and,
 -Payment for any underpayment or any leaves not given to the employee