Navigating the murky waters of redundancy payments

By Luke Anami

The poor growth of our economy is hurting Kenyans as companies continue to make workers redundant.

The Ministry of Labour estimates that more than 10,000 workers have been laid off in the past 6 months.

Although there are no firm figures on the number declared redundant, the process is riddled with complications and complaints from redundant workers.

Last month, employees of an international organization went to the Ministry of Labour to express their displeasure in the formula used to calculate their final dues.

They would rather be paid based on the number of hours worked, rather than on the number of days.

How, therefore, should employees who have been declared redundant be paid their final dues?

A lawyer conversant with Labour matters says even though the Employment Act 2007 Section 40 offers a remedy on how to deal with redundancy, final dues in most companies depends on the company policy in place.

"A company policy that defines how employees shall be paid upon redundancy is one method that employers can base on," Gregory Ombito, an advocate of the High Court of Kenya and a former magistrate said.

"However, the policy must be guided by the employment laws in place," he added.

Laws On Redundancy

According to the Employment Act 2007, an employer shall not terminate a contract of service on account of redundancy, unless the employer complies with certain conditions.

For instance, where the employee is a member of a trade union, the employer must notify, in writing, the union to which the employee is a member.

Moreover the employer must notify the labour officer managing the area where the employee works, explaining the reasons for, and the extent of, the intended redundancy at least one month prior to the date of the intended termination.

Where an employee is not a member of a trade union, the employer must notify both the employee and the labour officer, in writing.

"Calculation of the final dues for a non-union member however depends on the employment policy of that particular organization," Ombito said.

"The employee must be issued with the guidelines when he is employed and not when losing a job."

 

 

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