edundancy in Kenya is not a commercial decision dressed in procedure. It is a procedure that, properly observed, allows a commercial decision to stand, and that, if rushed, produces awards the original saving will not cover.
Section 40 of the Employment Act is the document every restructure should be designed around, not the one consulted at the end. The case law has been remarkably consistent on the point: substantive justification is necessary but not sufficient. Without the procedural steps, the dismissal is unfair, however commercially defensible the underlying decision.
The procedural duty, in five steps
- Notify the relevant labour officer and any recognised union, in writing, with the reasons for the redundancy and the proposed selection criteria.
- Notify the affected employees, individually, with the same information and a meaningful opportunity to respond.
- Consult, genuinely, on the selection criteria, on alternatives to redundancy, and on the proposed terms.
- Apply the selection criteria fairly, recording the assessment against each criterion for each affected employee.
- Pay all terminal dues, including severance at fifteen days' pay per completed year of service, on the last working day.
Selection criteria, objective, recorded, defensible
The criteria should be agreed before the process begins, applied consistently, and recorded. The Employment and Labour Relations Court has set aside dismissals where the criteria were articulated but not visibly applied, and where the assessments themselves did not match the criteria advertised. The documentary defence is the criteria, the matrix, and the contemporaneous notes, not the explanation given later.
Alternatives to redundancy
The consultation should canvass alternatives, redeployment, reduction of hours, voluntary separation, freezing recruitment. The employer is not bound to adopt them, but the court expects the employer to have considered them and to be able to show it.
What we recommend in practice
- Build a project plan for the restructure, with the section 40 steps as the spine. Compress only with caution.
- Treat the labour-officer notification as a substantive document, not a copy of the internal memo.
- Document the consultation. The minutes, properly kept, are the strongest evidence the consultation occurred.
- Run a pre-implementation legal review against the section 40 checklist before notices issue.