The termination of employment is one of the most sensitive and regulated areas in Kenyan labour law. It sits at the intersection of an employer’s need to manage its workforce and an employee’s constitutional and statutory protections against arbitrary loss of livelihood. Kenyan law, principally through the Employment Act, 2007, seeks to ensure that any termination of employment is justified, fair, and procedurally sound.
A contract of employment can be terminated by any party at any time through Mutual Agreement, Lapse of time, notice of frustration, redundancy and dismissal. The Constitution guarantees the right to fair labour practices (Article 41). This constitutional right underpins all employment relationships in Kenya and requires that termination of employment be both substantively and procedurally fair, benchmark that courts have repeatedly upheld. Article 41 of the Constitution recognises that work is not merely a commercial arrangement, but a human relationship grounded in dignity, fairness and mutual respect. It affirms that every person is entitled to fair labour practices, meaning that employment should be just, transparent and equitable.
Section 40 of the Employment Act ensures that redundancy is carried out fairly and not abruptly. Before terminating an employee on account of redundancy, the employer must give at least one month’s notice to the employee (or their union, if unionised) and notify the labour officer. The employer must also use a fair selection criterion, considering factors like seniority, skill, and reliability.Additionally, the employer must pay all dues, including any accrued leave, one month’s notice or pay in lieu of notice, and severance pay of at least fifteen days’ salary for each completed year of service.
Under Section 41 the employer is required to notify and give a hearing to an employee before terminating his employment on grounds of misconduct. Moreover,Section 43 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. Section 45 of the Employment Act protects employees from unfair termination by requiring employers to justify both the reason and the process of dismissal. An employer must prove that there was a valid and fair reason for terminating employment, whether related to the employee’s conduct, capacity, compatibility, or the employer’s operational needs and that the termination was carried out through a fair procedure. If any of these elements is missing, the dismissal is deemed unfair.
Substantive fairness evaluates the reason for termination. Valid reasons include misconduct, poor performance (supported by evidence), incapacity, or genuine operational requirements. Courts will assess whether the employer genuinely believed in the facts justifying termination and whether the reason is objectively fair. Procedural fairness requires following steps such as Explaining the allegations in a language the employee understands and giving the employee a chance to respond before terminating employment. Failure in either aspect can render termination unfair.
In the case of Lintons Place Limited vs Kamau & 2 others [Appeal E211 OF 2024 [2025], In this appeal decision, the court affirmed that outsourcing security services did not justify terminating employees unless redundancy procedures were followed. The employer’s failure to adhere to statutory redundancy steps, including consultation and documentation, rendered the termination unfair. Outsourcing could not be used to circumvent redundancy protections; employers must strictly observe statutory conditions.
In the case of Mwangi vs Kevian Kenya Limited Cause E456 of 2022 [ 2025], The ELRC found that termination during probation without notice, disciplinary process, or a hearing was both substantively and procedurally unfair, despite probationary status and a signed discharge voucher. The court awarded notice pay and compensation. It was established that Probationary employees are still protected by procedural fairness safeguards in the Employment.
Remedies to Breach of Employment Contract.
If breach of contract of employment is so fundamental as to indicate lack of intention to contract the agreed party can repudiate the contract.
If breach is by the employer, the employee is entitled to damages in the measure of loss of earnings. However, the employee is under duty to mitigate the loss that arises from such breach. If he does not damages may not be rewarded at all.
This is whereby a court orders an employer to reinstate the employee. Specific performance is an equitable and discretionary remedy. It is a rare remedy because of public policy. Section 49(4)(d) reiterates the said position and urges the court to consider the common law principle that there should be no order for specific performance in a contract of service except in very exceptional circumstances
Contemporary Issues and Trends
In a significant step forward for workers’ rights Act, the Court of Appeal in Gogni Rajope Construction Company Limited & Another v. Cornel Otieno Omondi declared Section 45(3) of the Employment Act unconstitutional. This section had previously barred employees from claiming unfair termination unless they had worked continuously for at least thirteen months. By upholding the earlier High Court decision in Samuel G. Momanyi v. Attorney General & Another [2012], the Court made it clear that fairness at the workplace cannot depend on how long someone has been employed.
The decision affirms that every employee, whether newly hired or long-serving, deserves protection from unfair dismissal and is entitled to due process. In essence, the ruling strengthens the constitutional right to fair labour practices by ensuring that justice in employment is not limited by tenure but grounded in fairness and equality for all workers.
In the case of G4S Kenya Limited vs Khawanga [2024], in this decision, the Employment and Labour Relations Court held that G4S’s dismissal of an employee was unfair because the company did not act “in accordance with justice and equity,” even though it accused the employee of negligence and dishonesty. The court emphasised that an employer must not only have a valid reason for termination but also follow fair procedure and substantiate its decision. Failure to do so means the termination is unlawful and compensation must be awarded. In this case, the court upheld awards for compensation (adjusted to Kshs 324,245.40), notice pay, and gratuity, while setting aside general damages that were not justified.
In Conclusion, The Employment Act, reinforced by constitutional guarantees, requires valid reasons and fair procedures before termination. Recent judicial developments highlight courts’ insistence on both procedural justice and substantive justification.