labour laws and

Economics
Employee Separation

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TERMINATION NOTICE

An employee or employer may legally terminate a

contract of service by observing the following
provisions;
(a) Where the contract is to pay wages daily, a
contract can be terminated by either party at the close
of any day without notice.

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b) Where the contract is to pay wages periodically at
intervals of less than one month (e.g. 2 weeks), a
contract can be terminated by either party giving a
written notice equivalent to that period (e.g. 2 weeks
written notice).
(c) where the contract is to pay wages or salary
periodically at intervals of or exceeding one month, a
contract can be terminated by either party by giving a
28 days written notice (one month notice).

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• (d) A party to a contract for a probationary period
may terminate the contract by giving not less than
seven days’ notice of termination of the contract.

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PAYMENT IN LIEU OF NOTICE
• Either of the parties to a contract of service, may
terminate the contract without notice upon payment
to the other party of the remuneration which would
have been earned by that other party in respect of
the period of notice required to be given e.g. pay
one month salary if you do not give your employer
one termination month notice.

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SUMMARY DISMISSAL

(1) Summary dismissal takes place when an employer

terminates the employment of an employee
without notice or with less notice than that to
which the employee is entitled by the law.

Any of the following matters may amount to gross

misconduct so as to justify the summary dismissal of
an employee -

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(a) Without leave or other lawful cause, an employee
absents himself from the place appointed for the
performance of his work (most organizations provide
for seven days absence).
(b) During working hours, by becoming intoxicated, an
employee renders himself unwilling or incapable to
perform his work properly.
(c) An employee willfully neglects to perform any
work which it was his duty to perform, or if he
carelessly and improperly performs the work
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Summary dismissal contd….
(d) An employee uses abusive or insulting language,
or behaves in a manner insulting, to his employer or
to a person placed in authority over him by his
employer.
(e) 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.

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(f) an employee is arrested for a cognizable offence
- is not within fourteen days either released on cash
bail or otherwise lawfully set at liberty.
g) 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. (Sufficient evidence is
available)

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 Termination on account of redundancy

Redundancy : the state of being no longer needed in

employment because there is no more work available
for you.
• An employer shall not terminate a contract of
service on account of redundancy unless the
employer complies with the following conditions—

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Redundancy procedure
(a) where the employee is a member of a trade union,
the employer notifies the union to which the
employee is a member and the labour officer in
charge of the area

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(b) where an employee is not a member of a trade
union, the employer notifies the employee personally
in writing and the labour officer;
(c) the employer has, in the selection of employees to
be declared redundant had due regard to
seniority ,skill, ability and reliability of each
employee of the particular class of employees
affected by the redundancy;

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(d) where there is in existence a collective agreement
between an employer and a trade union setting out
terminal benefits payable upon redundancy
e) the employer has not placed the employee at a
disadvantage for being or not being a member of the
trade union;
(e) the employer has, where leave is due to an
employee who is declared redundant, paid off the
leave in cash;

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(f) the employer has paid an employee declared
redundant not less than one month’s notice or one
month’s wages in lieu of notice; and

(g) the employer has paid to an employee declared

redundant severance pay at the rate of not less than
fifteen days pay for each completed year of service.

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Severance pay
• Severance pay is the compensation  an employer
provides to an employee after employment is over
as a result of no fault of the employee (usually
through redundancy).

• NB. This section shall not apply where an

employee’s services are terminated on account of
insolvency.

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INSOLVENCY OF
EMPLOYER

• An employer is insolvent for the purposes of this

Part if;
• (i) has been adjudged bankrupt
• (ii) has died and his estate is to be administered in
accordance with the Law of Succession Act;

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• if the employer is a company—
(i) a winding-up order has been made
(ii) a receiver or a manager of the company’s
undertaking has been duly appointed since the
company cannot meet its financial obligations.

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 Termination by retirement
• Occurs under the following:
• when a person reaches the mandatory retirement
age or as fixed by the parties
• Medical grounds –one is sick on and off and affects
performance
• In the public interest –one has engaged in wrongful
activities but the employer prefers not to institute
legal proceedings
• Abolition of office

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 Termination by operation of
law
• Contract of employment is automatically
terminated under the following circumstances:
• Persistent illness that amounts to incapacity
• Bankruptcy of the employee
• Sale of business
• Winding up of business
• In the event of frustration

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• No employer is bound to give to an employee a
testimonial, reference or certificate relating to the
character or performance of that employee.

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Unfair termination
refers to termination which is not protected by the
law. The following constitute grounds for unfair
termination according to the Employment Act;
(a) a female employee’s pregnancy, or any reason
connected with her pregnancy;
(b) 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;

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Grounds of unfair termination
(c) an employee’s membership or proposed
membership of a trade union;
(d) 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;

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(e) an employee’s seeking of office or having acted
in the capacity of an officer of a trade union.
(f) an employee’s refusal to join or withdraw from a
trade union;

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(g) an employee’s race, colour, tribe, sex, religion,
political opinion or affiliation, nationality, social
origin, marital status, HIV status or disability;

(h) 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 (without
evidence or malicious accusations).

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• i) an employee’s participation in a lawful strike.

• NB: In any claim arising out of 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 to have been unfair.

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Remedies for unfair termination

The following are the possible remedies for unfair

termination;
(a) the wages which the employee 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;

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(b) the proportion of the wages due for the period of
time for which the employee has worked i.e where
termination occurs before the employee gets paid
what’s due to him.
(c) the equivalent of a number of months wages or
salary not exceeding twelve months based on the
gross monthly salary of the employee at the time of
dismissal.

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d) reinstate the employee and treat the employee in
all respects as if the employee’s employment had not
been terminated.
(e) re-engage the employee in work comparable to
that in which the employee was employed prior to his
dismissal, or other reasonably suitable work, at the
same wage

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2. Where an employee has been summarily dismissed or
his employer has unfairly terminated his employment
without justification, the employee shall, within three
months of the date of dismissal, present a complaint
to a labour officer (After the lapse of three months, the
matter shall be dealt by the industrial court).
3. No employee whose services have been terminated
or who has been summarily dismissed during a
probationary contract shall make a complaint under
this section.
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 Certificate of service

An employer shall issue to an employee a certificate

of service upon termination of his employment,
unless the employment has continued for a period of
less than four consecutive weeks (one month). A
certificate of service issued shall contain—
(a) the name of the employer and his postal
address;
(b) the name of the employee;

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 (c) the date when employment of the employee
commenced;
(d) the nature and usual place of employment of
the employee;
(e) the date when the employment of the
employee ceased; and
(f) such other particulars as may be prescribed.

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 Protection of wages
PROTECTION OF WAGES
(1) Subject to the employment Act, an employer shall
pay the entire amount of the wages earned by or
payable to an employee in respect of work done by
the employee in —
(a) in cash;
b) into a bank account or Sacco designated by the
employee.
(c) by cheque, postal order or money order in
favour of the employee.

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Protection of wages
• (d) in the absence of an employee, to a person
other than the other employee, if the person is duly
authorised by the employee in writing to receive
the wages on the employee’s behalf.
• No employer shall limit or attempt to limit the right
of an employee to dispose of his wages in a manner
which the employee deems fit.

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 DEDUCTION OF WAGES
an employer may deduct from the wages of his
employee—

(a) any amount due from the employee as a

contribution to any provident fund or any scheme
approved by the Commissioner for Labour to which
the employee has agreed to contribute e.g. Sacco
savings

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• (b) a reasonable amount for any damage done to,
or loss of any property lawfully in the possession or
custody of the employer occasioned by the willful
default of the employee.
• (c) an amount not exceeding one day’s wages in
respect of each working day the employee is absent
from work without leave or other lawful cause.

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(d) an amount equal to the amount of any shortage
of money arising through the negligence or
dishonesty of the employee whose contract of service
provides specifically for his being entrusted with the
receipt, custody and payment of money e.g. banking
industry or cashiers

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e) any amount paid to the employee in error as
wages in excess of the amount of wages due to him
i.e over payments.
(f) any amount the deduction of which is authorised
by any written law for the time being in force.

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• (g) any amount in which the employer has no
direct or indirect beneficial interest, and which the
employee has requested the employer in writing to
deduct from his wages e.g. employee savings.
• (h) Advances or loans given to employee by the
employer in writing.

• (i) such other amounts as the cabinet secretary for

labour may prescribe or a court of law e.g. child
maintenance fee etc.
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GENERAL REGULATIONS REGARDING EMPLOYEE
PAYMENTS

• Hours of work per day or week

• Normal working hours consist of 45 hours of work

per week, eight hours from Monday to Friday , and
five hours on Saturday. Collective agreements may
modify the working hours, but generally provide for
weekly working hours of 40 up to 52 hours per week.

• A person employed for night work may not work for

more than 60 hours a week.
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• The end

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