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Employment Law
Redundancy in Kenya: what employers must do in 2025
Faith Wambui
·
June 19, 2026
With economic headwinds driving corporate restructuring across several sectors, employers must ensure their redundancy processes comply with the Employment Act 2007 and recent case law developments.
The key steps in a lawful redundancy process are:
1. Genuine commercial reason — The employer must demonstrate a genuine business reason for the redundancy (e.g., financial distress, technological change, reorganisation).
2. Notification to the Labour Commissioner — At least one month before any redundancies take effect, the employer must notify the County Labour Officer in writing.
3. Consultation with employees — The employer must consult with affected employees (or their union) and explore alternatives to redundancy.
4. Fair selection criteria — Employees must be selected for redundancy using fair and objective criteria. The 'last in, first out' (LIFO) principle is commonly applied but is not mandatory.
5. Severance pay — Under the Employment Act, each employee declared redundant is entitled to a minimum of 15 days' pay for each completed year of service.
6. Notice period — Standard contractual or statutory notice must be given, typically one month.
Failure to follow these steps can result in awards of up to 12 months' salary for unfair termination, plus reinstatement orders.
The key steps in a lawful redundancy process are:
1. Genuine commercial reason — The employer must demonstrate a genuine business reason for the redundancy (e.g., financial distress, technological change, reorganisation).
2. Notification to the Labour Commissioner — At least one month before any redundancies take effect, the employer must notify the County Labour Officer in writing.
3. Consultation with employees — The employer must consult with affected employees (or their union) and explore alternatives to redundancy.
4. Fair selection criteria — Employees must be selected for redundancy using fair and objective criteria. The 'last in, first out' (LIFO) principle is commonly applied but is not mandatory.
5. Severance pay — Under the Employment Act, each employee declared redundant is entitled to a minimum of 15 days' pay for each completed year of service.
6. Notice period — Standard contractual or statutory notice must be given, typically one month.
Failure to follow these steps can result in awards of up to 12 months' salary for unfair termination, plus reinstatement orders.
Employment Law
Redundancy
HR Compliance
Kenya