Employee redundancy: Why employers must follow the law even in the time of COVID-19

Rogue employers don’t mind if they kick us when we are down. That’s precisely what we have seen them do as Covid-19 continues to wreck havoc on the employment relationship in the country. Organizations of all sizes have been forced to rearrange their operations and even allow employees to work from home in order to keep some level of business operation.

This reality of our current existence has lured rogue employers into taking advantage when our attention is elsewhere. So, while we are trying to protect ourselves from COVID-19, employees are equally vulnerable to unfair termination. Before the outbreak of the novel coronavirus in the country, employees were already faced with a significant threat to loss of employment through redundancy. For this reason, it is important to know whether your employer is following the law.

Although a significant number of employers have resorted to redundancy, few, if any, are willing to follow the strict procedures provided under the employment laws. But what is redundancy? Simply put, redundancy occurs when an employer reduces the workforce because a position is no longer required.

However, Section 2 of the Employment Act defines redundancy as “The loss of employment, occupation, job or career by involuntarily means through no fault of the employee involving termination of employment at the initiative of the employer, where the services of an employee are superfluous and the practices commonly known as the abolition of office, job or occupation and loss of employment.

In Kenya, the basic statutory right of every employee who has been dismissed by reason of redundancy is to a redundancy payment from the employer. However, the employee must prove that there was redundancy, and he or she is eligible to bring a claim for the same. Section 40 of the Employment Act, 2007 provides the procedure for termination of employment on account of redundancy.

Section 40(1) provides that an employer shall not terminate a contract of service of a unionized employee on account of redundancy unless the employer has notified the trade union to which the employee is a member, of the impending redundancy followed by another notice to the labor officer in charge of the area where the employee is employed. The notice must state the reasons for, and the extend of the intended redundancy.

The two notices must be given not less than a month prior to the date of the intended termination on account of redundancy. Further, where an employee is not a member of a trade union, the employer must notify the employee personally in writing and the labor office.

It only becomes redundancy when that particular position disappears. Where an employee is dismissed, and the position is filled by another person, it becomes a dismissal for purposes of unfair termination. An employee who is rendered redundant has a right to a redundancy payment. The payment is not necessarily to give the employee a financial cushion until he or she finds another job but simply to compensate him for a loss of right he had in the job, which has now disappeared.

The employer is also required to have due regard to the seniority in time and skill, ability, and reliability of each employee in the selection of employees to be declared redundant. Seniority here speaks to the length of time served and the age of the employee to be rendered redundant. It is also important to prepare the employee psychologically so as to mitigate the ramification of unplanned loss of income.

The employer must equally take care not to place an employee at a disadvantage for being or not being a member of a trade union. Where there is in existence a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy, the employer is obliged to abide by that.

Unlike normal termination, the procedure under section 40 of the employment is mandatory. Payment cannot be used as a substitute for the procedures provided under section 40. Employers who flaunt this procedure are simply setting the company up for action for unfair termination and or discrimination claims.

 

By Oscar Onyango

Simiyu Wekesa Advocates

Email: [email protected]

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