With the uncertainty presented by Covid-19 (coronavirus), professionals and private business owners will need to rapidly adjust their practices and procedures to suit the current situation and ensure continuity of business.
For most employers intending to terminate employees, redundancy is likely to be considered at some stage; if not immediately, then potentially while employees are on unpaid leave. If so, the usual rules around redundancy processes, including a genuine redundancy situation and the fair process will apply.
However, the question of whether a genuine redundancy situation has arisen or whether employers are practically able to abide by the redundancy procedures under section 40 of the Employment Act. For example, the requirement that a position that was previously held by an employee should disappear will be a legal landmine for employers who may want to hire new employees to fill those positions once things have improved. This could be in a month or a year but proving that the said position has disappeared would present challenges to employers for purposes of redundancy.
Another key Consideration in any redundancy process is the criteria by which employees are selected for redundancy. The selection must involve the fair application objective selection, which by practice, employers have applied the last in the first-out rule. Subsequently, the law provides that an employer has, in the selection of employees to be declared redundant had due regard to seniority in time and to the skill, ability, and reliability of each employee of the required particular class of employees affected by the redundancy before terminating them on the grounds of redundancy.
Employers will have to ensure that the criteria used in selecting a particular class of employees is not directly or indirectly discriminatory; This is because automatically selecting employees for redundancy purely on the basis that they have been affected by the impending redundancy could be problematic.
The third requirement is that 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 to compensate him for a loss of right he had in the job, which has now disappeared. The pay includes severance not less than 15(days) for each completed year, leave earned but not utilised and one month in lieu of notice in instances where the employee is not required to serve the notice period.
Lastly, employers are required to give notice. Section 40(1) provides; 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 works. The notice must state the reasons for, and the extend of the intended redundancy.
The two notices must be given less than a month before 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.
By Oscar Onyango
Simiyu Wekesa Advocates