Introduction
Kenya’s economy has not had it easy. From post-COVID turbulence to a weakened shilling, soaring costs of living, and increased taxation, businesses across the country are under immense pressure. For many employers, the response has been to restructure, and declare redundancies. Redundancy, when done right, is a legitimate tool. But many employers get it badly wrong, treating it as a shortcut to clear payroll. The result: costly unfair termination awards, court appearances, and reputational damage. This article is your early warning system — know these pitfalls before you act.
Pitfall 1: Skipping the Notice to the Employee and the Labour Officer
Section 40(1) of the Employment Act, 2007 requires the employer to notify the employee in writing and simultaneously notify the relevant labour officer at least one month before the redundancy, or pay one month’s wages in lieu. Many employers skip the labour officer notification entirely, a fatal omission courts consistently use to void the process.
► German School Society & Anor v Ohany & Anor [2023] KECA 894: The Court of Appeal held that notices to the employee, union, and labour officer are the “doorway” to the consultative process. Without these notices, meaningful consultation, a legal requirement, cannot occur.
Pitfall 2: Failing to Genuinely Consult with Employees or Their Union
Consultation is a right, not a formality. Courts expect employers to engage with affected workers with an open mind, share financial data, and explore alternatives before any decision is made. A five-minute all-staff announcement is not consultation.
► Kenya Airways Ltd v Aviation & Allied Workers Union [2014] eKLR: The Court of Appeal held that consultation must be genuine and meaningful. Mere notification does not amount to consultation. Employers must engage willing to consider alternatives before any final decision is reached.
Pitfall 3: Ignoring the “Last In, First Out” Principle
Section 40(1)(g) requires employers retrenching from similar roles to have regard to seniority and, to the extent consistent with efficiency, apply the “last in, first out” (LIFO) principle. Using redundancy to target specific employees, those who raised grievances or earn higher salaries , transforms a lawful process into unfair termination.
► Kimathi v Ericsson Kenya Limited [2023] KECA 106: The Court found that the employer selectively targeted employees without applying clear, objective criteria , substantively unfair, warranting full compensation.
Pitfall 4: Failure to Pay the Correct Redundancy Pay
Section 40(1)(f) entitles every redundant employee to at least one month’s wages per completed year of service, plus all accrued terminal dues. Many employers underpay, apply unlawful deductions, or offset alleged debts (such as training bonds) without statutory basis. Courts regularly award interest on top of the shortfall where payment is delayed.
Pitfall 5: Declaring Redundancy, Then Re-Advertising the Same Job
If a role is truly redundant, it ceases to exist. If the same position — or a cosmetically renamed version of it, reappears on a job board weeks later, the redundancy is a sham. Courts look at the substance of the role, not the title. Employees increasingly present screenshots of job ads, LinkedIn posts, and payroll records of the successor as evidence.
► Agnes Ongadi v Kenya Electricity Transmission Co. Ltd [2016] eKLR: The court held that abolishing the claimant’s office and immediately advertising an “Ag. Senior Manager, HR & Administration” role performing the same functions was not a genuine redundancy but an unfair dismissal , renaming a position does not change the job.
Pitfall 6: Discriminatory Selection Criteria
Selecting employees for redundancy on the basis of pregnancy, disability, trade union membership, HIV status, or gender is a fundamental violation of the Employment Act and the Constitution of Kenya, 2010. Before finalising your list, audit it carefully: could any selection be linked to a protected characteristic? If yes, go back to the drawing board.
Conclusion: Hard Times Do Not Excuse Cutting Corners
The economic pressures facing Kenyan businesses are real. But the Employment Act, 2007 was crafted for precisely these moments, to ensure that even in difficulty, workers’ dignity is not sacrificed on the altar of profit margins. The courts have spoken, repeatedly and clearly: redundancy is a process, not a shortcut. The cost of getting it wrong is financial, reputational, and deeply human.
If you are an employer navigating these turbulent waters, seek legal counsel before issuing a single redundancy letter. If you are an employee handed a notice that did not follow these steps, do not accept it lying down — your rights are enforceable, and the courts are open. The redundancy trap is avoidable. Know the law, follow the process, and treat your people with the dignity they deserve, even in goodbye.
This article is provided free of charge for information purposes only; it does not constitute legal advice and should be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary as set in the article should be held without seeking specific legal advice on the subject matter. If you have any query regarding the same, please do not hesitate to contact our Employment and Labour Relations Department at WAELR@wamaeallen.com
About the author
Caxstone specializes in civil, employment and labour disputes, constitutional law, family law and succession, and environment and land matters. He has amassed a wealth of knowledge and experience in litigation which is evident in the successes obtained for clients. He is an active member of the Employment and Labour Relations Court Bar-Bench committee.
Virginiah is a promising transactional advocate specializing in Real Estate and SeVirginiah is a seasoned Advocate with great expertise of more than three years in Real Estate, Banking and Finance, Commercial and Corporate Law. She is a focused and self-motivated advocate successful at strategically managing operations with proven team performance. She is a highly organized, excellent communicator, detail-oriented, leader skilled in directing high-performing teams to develop solutions and solve operational and technical problems. Her prowess has benefitted the firm by way of greater client acquisition, client management, and client retention.curitization, Banking and Finance.
Frankline M. Otieno is a dispute resolution associate, recommended professional and committed to offering sustainable client-centred solutions to legal issues.Frankline is astute in commercial litigation, securities law, banking law, intellectual property litigation, public procurement, land law litigation, Judicial Review and Administrative law litigation, sports law, tax litigation, administrative law, consumer protection law, competition law and constitutional litigation.
Denis Mutugi specializes in Commercial Litigation and Alternative Dispute Resolution.
Denis graduated with a Bachelor of Laws, LLB (Hons) from The University of Nairobi in 2021 and was admitted to the Roll of Advocates of the High Court of Kenya in the year 2023.
Denis has amassed a considerable wealth of experience in conducting legal research on various complex legal matters touching on Commercial, Insurance, Employment and Insolvency law and bankruptcy.
