A practitioner’s guide for HR professionals and in-house counsel on lawful dismissal, procedural fairness and the liabilities that follow
By Mokua Manyara | MNW & Advocates LLP | Employment & Labour Law | June 2026
There is a moment every HR professional recognises. The decision to terminate an employee has been made, the paperwork is in hand, and the only thing standing between the organisation and a potentially costly dispute is whether every step leading to this point was taken correctly. In Kenya, that question has never been more consequential than it is today.
The Employment Act, (the “Act”) is unambiguous in its architecture: an employer who terminates a worker carries the burden of proving both a valid reason for dismissal and that the process by which that decision was reached was fair. Courts have made it equally clear that these are two distinct enquiries, and that failing either one is enough to expose the organisation to liability. This article is written for those who must navigate that architecture every day, whether as HR leads, in-house counsel or line managers with disciplinary responsibility.
“An employer shall, before dismissing an employee, hear and consider any representations which the employee may wish to make.” Employment Act, Section 41(2).
1. The Dual Test: Substantive and Procedural Fairness
Section 45 of the Act prohibits unfair termination. In determining whether a termination was unfair, the Employment and Labour Relations Court (ELRC) applies a dual test that examines, first, whether there was a valid reason connected to the employee’s conduct, capacity or operational requirements of the employer; and second, whether the employer followed a fair procedure before arriving at that decision.
The burden of proof on both limbs rests squarely with the employer. This is not a trivial reversal of the ordinary common law position. It means that an employer who cannot produce contemporaneous records of the disciplinary process, who cannot demonstrate that the employee was notified of the allegations and given an opportunity to respond, or who cannot point to a consistent practice of applying equivalent sanctions to comparable misconduct, will lose, even if the underlying dismissal was justified on the merits.
HR professionals must therefore treat documentation not as administrative overhead but as litigation insurance. A well-kept disciplinary file, containing the notice of the charges, the response of the employee, the minutes of any hearing and the reasoned decision of the panel, is frequently the difference between a defended case and a conceded one.
2. The Hearing: What It Actually Requires
Section 41 of the Act codifies the right of an employee to be heard before dismissal. In practice, this requirement is routinely misunderstood. It does not demand a formal adversarial tribunal, but it does require more than a letter informing the employee of a decision already taken. The courts have consistently held that the hearing must be meaningful: the employee must be given adequate notice of the specific allegations, must be afforded a genuine opportunity to respond to those allegations, and must be informed of their right to be accompanied by a fellow employee or a shop floor union representative.
Employers who conduct a hearing by sending a show-cause letter and treating silence as guilt, or who hold hearings within twenty-four hours of issuing the charge, frequently fall on the wrong side of this test. The question is not whether a hearing was held but whether the employee was genuinely able to participate in it.
The courts have found procedural unfairness even where the underlying reason for dismissal was entirely valid. In such cases, the remedy may be reduced but it will not be zero.
For in-house counsel advising on disciplinary procedures, the practical implication is this: the policy must be reviewed not only for legal compliance on paper but for how it actually operates on the ground. A policy that gives three days’ notice of a disciplinary hearing is lawful on its face. A manager who issues a notice on a Friday afternoon for a Monday morning hearing, in circumstances where the employee works a remote posting, may not be acting consistently with that policy’s spirit or with the Act.
3. Remedies: Understanding What the Court Can Award
Section 49 of the Act is the remedial framework for unfair termination. It is essential that HR and legal teams understand what it does and does not permit, because the Act limits the court’s discretion in ways that are not always intuitive.
The primary remedy is compensation, capped at twelve months’ gross wages. This is not a minimum: it is a ceiling, and courts arrive at the figure by weighing factors including the length of service, the nature of the employer’s conduct, the loss suffered by the employee and the degree of fault attributable to each party. General damages in the common law sense are not available for wrongful or unfair termination. Notice pay is awarded only where no notice was given or the contractual notice period was not honoured. Gratuity is recoverable only where the contract of service or a collective agreement expressly provides for it.
Where the termination was on account of disability, the calculus changes. The Persons with Disabilities Act of 2025, imposes specific obligations on employers in relation to reasonable accommodation and non-discrimination, and the ELRC has shown increasing willingness to award discrimination-specific compensation over and above the Section 49 ceiling where the pleadings support it. In-house counsel advising on disability-related dismissals must ensure that the discrimination head of damage is properly pleaded if it is to be recovered.
4. Redundancy: The Hidden Compliance Risk
Redundancy is one of the most litigated grounds for termination in Kenya, and it is also one of the most misunderstood. Section 40 of the Act sets out a mandatory procedure for redundancy notices: the employer must notify the employee and the labour officer in writing at least one month before the date of termination, must apply fair and objective criteria in selecting employees for redundancy, and must pay the required terminal benefits at the time of or before termination.
Courts have been unsympathetic to employers who use redundancy as a convenient label for disciplinary dismissals or who conduct redundancy exercises that bear suspicious resemblance to the resolution of personality conflicts. Where the evidence suggests that redundancy was a pretext, the court will look through the form of the termination to its substance and apply the Section 45 and Section 49 framework. The records of the selection exercise, the criteria applied and the consultation process must be capable of withstanding that scrutiny.
A common gap in corporate practice is the failure to document the operational reason for the redundancy with sufficient specificity. A bare statement that the company is “restructuring” is not enough. The employer should be able to produce board resolutions, financial statements or restructuring plans that substantiate the business case, and should be able to demonstrate that the selection criteria were applied consistently across all affected employees.
5. The Certificate of Service: A Non-Negotiable Obligation
Section 51 of the Act requires an employer to issue a certificate of service to every employee upon termination of their employment, regardless of the circumstances of that termination. This obligation is not contingent on the employer’s view of the employee’s conduct or performance, and withholding a certificate as a form of punishment or leverage is not only unlawful but also a common trigger for ancillary claims before the ELRC.
The certificate must state the employee’s name, the date of commencement and the date of termination of employment, and the nature of the work performed. HR teams should ensure that the issuance of a certificate of service is a standard item on every termination checklist, completed at the time the decision takes effect and not held pending the resolution of any financial disputes between the parties.
6. Practical Guidance for HR and In-House Counsel
The following framework will not guarantee an outcome in every case, but it will materially reduce the organisation’s exposure in the vast majority of disciplinary and termination situations.
First, conduct a merits review before initiating the process. Is the alleged conduct established? Is it of sufficient gravity to justify dismissal? What is the previous disciplinary record of the employee? What sanctions have been applied to comparable cases? If the answers to these questions do not clearly support dismissal, the process should not begin.
Second, notify the employee of the specific allegations in writing, with sufficient particularity that they can prepare a genuine response. The notice must state the charges, the date, time and place of the hearing, and the employee’s right to be accompanied.
Third, hold a hearing that is substantively fair. Take minutes. Allow the employee to respond to each charge. If new matters arise during the hearing, adjourn and re-notify rather than expanding the scope of the enquiry on the spot.
Fourth, issue a reasoned decision. The decision must identify the findings made, the reasons for those findings and the sanction imposed. Proportionality between the misconduct and the sanction is not a discretionary nicety: it is a legal requirement.
Fifth, settle terminal benefits promptly. Delayed payment of accrued leave, notice pay and any other contractual entitlements converts a defensible termination into one clouded by bad faith.
Sixth, issue the certificate of service immediately, without conditions.
A Final Word
Termination law in Kenya is not hostile to employers who act fairly. The Act is designed to ensure that the power imbalance inherent in the employment relationship does not translate into arbitrary or capricious treatment of workers. An employer who approaches dismissal with discipline, consistency and genuine procedural respect will almost always be in a position to defend its decisions.
The risk is not in making difficult decisions. The risk is in making them carelessly.
MNW & Advocates LLP advises employers, employees and statutory bodies on the full range of employment and labour law matters, including disciplinary procedures, collective bargaining, unfair termination litigation and regulatory compliance. For a confidential consultation, contact us at mokua@mnwlaw.co.ke or call +254 733 491 415. Visit us at www.mnwlaw.co.ke.
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