Navigating the Employee Termination Process: Key Steps for Employers in Kenya

Employee termination is a significant event that can have far-reaching consequences for both the employer and the employee. While the decision to terminate an employee may be difficult, it’s essential that businesses follow the right procedures to ensure the process is handled legally, ethically, and respectfully. In Kenya, termination is governed by the Employment Act, which lays out clear guidelines to protect both employees' and employers' rights.

Understanding the various reasons for termination, the process involved, and the legal requirements is crucial for employers. A fair and transparent termination process not only reduces the risk of legal challenges but also promotes positive organizational culture and maintains the morale of remaining employees. In this article, we will explore the different types of termination, the key steps involved, and best practices to help you navigate the employee termination process effectively.

Types of Employee Termination

Before diving into the process, it’s important to understand the different types of termination, each with its own legal requirements and procedures.

1. Resignation

Resignation occurs when an employee voluntarily decides to leave their position. This may be due to personal reasons, career advancement opportunities, or dissatisfaction with the role. While resignation is typically a voluntary decision, there are still steps that employers need to take to ensure it is handled appropriately.

In Kenya, employees are required to give notice of resignation according to the terms of their contract. The standard notice period is usually 30 days, but it may be longer depending on the employment agreement. Upon receiving the resignation letter, employers should acknowledge the resignation in writing and initiate the process of preparing the employee’s final settlements.

Best Practices:

• Ensure the resignation letter is submitted in writing.
• Conduct an exit interview to understand the reasons behind the resignation and gather valuable feedback.
• Prepare for a proper handover of duties to ensure minimal disruption to operations.

2. Redundancy

Redundancy occurs when an employer decides to terminate an employee due to the redundancy of their role. This might be due to technological changes, organizational restructuring, financial difficulties, or a shift in business strategy. In Kenya, redundancy is a well-regulated process that requires careful attention to ensure fairness and compliance with the law.

According to the Employment Act, the employer is obligated to:

• Notify the employee of the redundancy in writing, giving them at least one month’s notice.
• Provide compensation in the form of severance pay, which is usually calculated based on the employee’s length of service.
• Provide written justification for the redundancy.
• Offer alternative positions if available.

Best Practices:

• Develop a fair and objective selection criterion for determining which employees will be made redundant.
• Ensure the redundancy process is communicated clearly to affected employees, and provide them with sufficient support, including severance pay and assistance with job searching.
• Avoid discrimination or bias when selecting employees for redundancy.

3. Summary Dismissal

Summary dismissal is the immediate termination of an employee for gross misconduct. Examples of gross misconduct include theft, fraud, assault, insubordination, and serious breaches of workplace policies. Under Kenyan law, summary dismissal can occur without notice or severance pay, provided there is just cause.

However, summary dismissal should not be a knee-jerk reaction. The employer must follow a proper disciplinary process, which includes:

• Providing the employee with an opportunity to explain their actions.
• Conducting an internal investigation, where applicable, to gather all relevant facts.
• Ensuring that the employee is given a fair hearing before making the dismissal decision.

Best Practices:

• Have clear workplace policies and codes of conduct in place, outlining the behavior that could lead to summary dismissal.
• Ensure that all employees are aware of these policies through training or employee handbooks.
• Avoid summary dismissal for minor infractions and ensure that the misconduct is serious enough to warrant immediate termination.

4. Expiry of Contract/Retirement

Sometimes, termination happens when an employee’s fixed-term contract expires or when an employee reaches retirement age. A fixed-term contract is typically agreed upon for a specific period, and both the employer and employee understand that the contract will end at the expiration date.

In Kenya, retirement age is generally set at 60 years, though this can vary depending on company policy or the nature of the employment. Employers must give employees advance notice if they plan to terminate based on contract expiration or retirement. At the time of termination, the employer must settle all due payments, including severance pay, unused leave days, and any other contractual benefits.

Best Practices:

• Notify employees in advance about the expiration of their contract or the upcoming retirement.
• Offer options for employees nearing retirement, such as retirement planning or health benefits.
• Ensure that all final payments, including gratuity (if applicable), are made on time.

Key Steps in the Employee Termination Process

Regardless of the type of termination, the employer must follow certain steps to ensure the process is smooth, respectful, and legally compliant. Let’s break down these steps:

1. Clear Communication and Documentation

Clear communication is the cornerstone of a successful termination process. The employer must notify the employee in writing about the termination, stating the reasons for the decision and the effective date. It’s essential to document all discussions, meetings, and warnings given to the employee, particularly in cases of disciplinary action or redundancy.

Best Practices:

• Use formal written communication to notify the employee of termination, providing clear reasons and legal justifications.
• Maintain comprehensive documentation for every step of the process, including emails, meeting notes, and performance evaluations.

2. Compliance with Legal Requirements

In Kenya, the Employment Act regulates the terms of termination, including notice periods, severance pay, and other legal requirements. Employers must adhere to these legal obligations to avoid litigation or claims for wrongful dismissal. For instance:

• In cases of redundancy, severance pay should be provided (at least 15 days’ pay for each completed year of service).
• In cases of unfair dismissal, the employee may claim compensation or reinstatement, depending on the circumstances.

Best Practices:

• Ensure that the termination complies with the Employment Act and other relevant labor laws.
• Offer severance pay, unused leave, and any other entitlements due to the employee.

3. Conducting a Fair and Respectful Termination Meeting

The termination meeting is a critical moment in the process. It should be conducted respectfully, with professionalism and empathy. The employer should explain the reasons for the termination, give the employee a chance to ask questions, and provide information on their final entitlements.

Best Practices:

• Prepare for the meeting by reviewing all documentation related to the employee’s performance, conduct, or contract.
• Be transparent but compassionate during the meeting, acknowledging the challenges of the situation.
• Allow the employee to express their thoughts and concerns.

4. Post-Termination Actions and Final Settlement

After the termination meeting, the employer must ensure that all final payments are made promptly. These may include:

• Severance pay (in the case of redundancy).
• Any outstanding salaries or bonuses.
• Unused leave days.
• Retirement benefits or pension (if applicable).

Employers should also ensure that any company property, such as keys, laptops, or ID cards, is returned by the employee.

Best Practices:

• Process the employee’s final settlement quickly to avoid delays.
• Ensure that all payments are made in compliance with the law and the employee’s contractual terms.

5. Offering Transition Support

Offering transition support to terminated employees can help them navigate the change and find new opportunities. While this is not a legal requirement, it can demonstrate goodwill and strengthen the organization’s reputation.

Best Practices:

• Provide references or recommendations for employees who have performed well.
• Offer outplacement services or job search support, where possible.
• Ensure that the employee understands their rights, such as unemployment benefits or pension rights.

Best Practices for a Smooth Termination Process

To ensure that the termination process is handled professionally and legally, consider these best practices:

• Develop a Clear Termination Policy: A well-defined policy can guide managers and HR teams through the process, ensuring consistency and fairness.
• Stay Transparent and Fair: Transparency is key to avoiding misunderstandings. Be honest with employees about the reasons for termination.
• Provide Adequate Support: Whether through career counseling, references, or job search assistance, offering support can ease the transition and reduce the emotional impact on the employee.

Conclusion

The employee termination process is a delicate and complex matter that requires careful attention to detail and legal compliance. By following a clear, transparent process and treating employees with respect, employers can minimize legal risks, maintain a positive organizational culture, and protect the company’s reputation.

As the business environment evolves, it’s essential to stay informed about changes in labor laws and to adapt your policies to ensure compliance. A well-handled termination process can foster goodwill, improve employee retention, and enhance the overall work environment.