Employment Law in Kenya: What Employers Should Get Right Before Terminating an Employee

Ending an employment relationship can expose an organisation to significant legal, financial and reputational risk when the process is handled incorrectly.

One of the most important principles for employers in Kenya to understand is that having a genuine concern about an employee does not automatically make a termination lawful.

In many termination cases, an employer must be able to demonstrate both a valid and fair reason for termination and a fair procedure leading to the decision.

This means that the question is not simply:

“Did the employee do something wrong?”

Employers should also ask:

“Can we prove the reason, and did we give the employee a fair opportunity to respond before making the decision?”

The following practical considerations can help employers reduce risk and manage termination processes more effectively.

1. Establish the Real Reason for the Proposed Termination

Before beginning a disciplinary or termination process, the employer should identify precisely why termination is being considered.

Possible reasons may include:

• misconduct;
• gross misconduct;
• poor performance;
• incapacity;
• persistent failure to meet reasonable workplace standards;
• breach of employment obligations; or
• operational requirements such as redundancy.

These situations should not automatically be treated as interchangeable.

For example, an employer dealing with alleged misconduct may need a disciplinary process, while an organisation abolishing a role for genuine operational reasons may be dealing with redundancy and therefore a different statutory procedure.

2. Investigate Before Reaching a Conclusion

A common mistake is to move directly from an allegation to a disciplinary hearing without first establishing the relevant facts.

A reasonable investigation may involve reviewing:

• emails and correspondence;
• attendance records;
• performance records;
• company policies;
• financial or transaction records;
• witness accounts;
• previous warnings;
• employment contracts; and
• other documents connected to the allegation.

The purpose of an investigation should be to establish whether there is a credible basis for disciplinary action—not to manufacture evidence supporting a decision already made.

Employers should also preserve relevant records. If a termination is later challenged, contemporaneous documents are often more useful than explanations reconstructed months later.

3. Notify the Employee of the Allegations Clearly

An employee should understand the case they are expected to answer.

Where termination is being considered on grounds such as misconduct, poor performance or incapacity, the employer should communicate the concerns sufficiently clearly to enable the employee to respond.

A vague invitation stating only that an employee should attend a “disciplinary meeting” may be inadequate if the employee does not know the allegations or potential consequences.

Depending on the circumstances, the notice should identify:

• the conduct or performance issue complained of;
• the relevant dates or incidents;
• the workplace rule, contractual obligation or standard involved;
• the possibility of disciplinary action;
• the date and place of the hearing; and
• the employee’s opportunity to respond.

Fair procedure begins with giving the employee a meaningful understanding of the case they are being asked to answer.

4. Give the Employee a Genuine Opportunity to Be Heard

A disciplinary hearing should be more than a formality.

Section 41 of Kenya’s Employment Act provides important procedural protections where an employer is contemplating termination on grounds such as misconduct, poor performance or physical incapacity.

The process generally requires the employer to explain the reason for which termination is being considered and hear the employee’s representations before making a final decision.

The employee may also be entitled to have another employee or a shop-floor union representative present in the circumstances contemplated by the law.

5. Avoid the “Decision First, Hearing Later” Problem

This is one of the most significant practical risks in workplace disciplinary proceedings.

Management may become convinced that an employee should leave before the formal process begins. A disciplinary hearing is then arranged simply to create documentation supporting that predetermined decision.

That approach can undermine procedural fairness.

The purpose of hearing the employee is to allow their explanation to influence the decision where appropriate.

The disciplinary decision-maker should therefore remain open to several possible outcomes, including:

• no disciplinary action;
• counselling or guidance;
• a warning;
• a final warning;
• a performance improvement process;
• another proportionate sanction; or
• termination where justified.

If the answer is no because the outcome has already been decided, the process may be vulnerable to challenge.

6. Ensure the Reason Is Valid and Fair

Procedure alone is not enough.

An employer may hold a perfectly organised disciplinary hearing but still face difficulty if the underlying reason for termination cannot be proved.

Employers should therefore establish whether the evidence supports the allegation and whether the reason relied upon is sufficiently connected to the employee’s conduct, capacity, performance or the employer’s operational requirements.

The Employment Act places responsibility on the employer to prove the reasons relied upon in a termination dispute.

Good practice therefore requires management to ask:

• What evidence supports the allegation?
• Is that evidence reliable?
• What explanation has the employee provided?
• Does the explanation change the factual position?
• Are company rules clear and consistently applied?
• Is termination proportionate in the circumstances?

7. Treat Poor Performance Carefully

Poor performance can be especially difficult because it is often less straightforward than an allegation of misconduct.

Employers should distinguish between:

• an employee who cannot reasonably meet the required standard;
• an employee who has never been told what standard is required;
• an employee who requires training or support;
• an employee whose targets are unclear or unrealistic; and
• an employee who deliberately refuses to perform assigned duties.

Where performance is the problem, good management practice may include defining expected standards, documenting concerns, providing feedback and allowing a reasonable opportunity for improvement where appropriate.

Performance improvement plans can be useful where properly designed, but they should not be used merely as paperwork intended to justify a predetermined dismissal.

8. Distinguish Termination from Redundancy

An employee should not be disciplined simply because their position is no longer required.

Redundancy generally concerns the employer’s operational requirements rather than wrongdoing by the employee.

Section 40 of the Employment Act provides specific requirements for redundancy, including notification obligations, fair selection considerations, payment for accrued leave where applicable, notice or pay in lieu, and statutory severance requirements.

The process is therefore materially different from a misconduct dismissal.

9. Record the Process Properly

Employers frequently encounter difficulty because an otherwise defensible process was poorly documented.

A termination file may appropriately contain:

• the employee’s contract;
• relevant policies;
• investigation records;
• the notice or show-cause correspondence;
• the employee’s written response;
• minutes of the disciplinary meeting;
• supporting evidence;
• the decision and reasons;
• termination correspondence; and
• records of final payments and clearance.

Documentation should be accurate and contemporaneous.

Employers should avoid creating artificial records after a dispute has arisen. Inconsistencies between letters, minutes, emails and witness testimony can significantly weaken an employer’s position.

10. Communicate the Final Decision Clearly

After considering the employee’s representations and the available evidence, the employer should communicate the outcome clearly.

Where the outcome is termination, the letter should ordinarily identify the basis for the decision and address relevant contractual or statutory matters.

Depending on the circumstances, this can include:

• the effective termination date;
• the reason for termination;
• notice or payment in lieu where applicable;
• accrued leave;
• salary due;
• other contractual entitlements;
• clearance obligations;
• return of company property; and
• the certificate of service.

Section 51 of the Employment Act generally requires an employer to issue a certificate of service to an employee upon termination, subject to the statutory conditions.

11. Understand Summary Dismissal

Some conduct may be sufficiently serious to justify summary dismissal.

However, the words “gross misconduct” should not be treated as a shortcut around fair procedure.

An employer should still establish what happened, identify the misconduct relied upon and give the employee an appropriate opportunity to respond where required.

The seriousness of the allegation makes proper procedure more important, not less important.

An accusation of gross misconduct is not the same thing as proof of gross misconduct.

12. Consider Consistency and Proportionality

Employers should also consider whether disciplinary rules have been applied consistently.

If two employees engage in substantially similar conduct but one receives a warning while another is dismissed without an objective reason for the difference, questions of fairness may arise.

Relevant factors can include:

• the seriousness of the conduct;
• the employee’s disciplinary record;
• length of service;
• whether the conduct was deliberate;
• the consequences of the misconduct;
• mitigating circumstances; and
• how similar cases have previously been handled.

Termination should be a considered employment decision, not an emotional reaction to a difficult incident.

A Practical Termination Checklist for Employers

Following a structured process does not mean that employers cannot make difficult decisions.

It means those decisions are made from a stronger legal, operational and governance position.

Conclusion

Employee termination is one of the areas where good human-resource management and good legal practice closely overlap.

Employers are entitled to protect their businesses, enforce workplace standards, address misconduct and manage underperformance. But those decisions should be supported by evidence and implemented through a fair process.

The most defensible termination processes usually have three characteristics:

• a clearly identifiable reason;
• a genuine opportunity for the employee to respond; and
• documentation showing how the final decision was reached.

For employers, the objective should not simply be to end the employment relationship.

The objective should be to make a necessary employment decision in a way that is fair, properly documented and legally defensible.

Obtaining advice before issuing the final termination letter can often prevent problems that become substantially more difficult and expensive to address after a dispute has already arisen.