Altering the Employment Terms – Procedural Compliance

Reduction of salary

Under the Employment Act, any changes in the particulars of employment including remuneration must be accompanied by a statement of changes which must be given at the earliest opportunity but not later than one (1) month after the change in question or the time when the employee leaves to start work outside the country if the change results from the employee being required to work outside Kenya for a period of more than one month.()  

In Fredrick Ouma v Spectre International Limited [2013]eKLR it was held that  an employee’s salary cannot be reduced negatively to the detriment of the employee … and further that it can never be reduced unless there is a special understanding between the employer and employee. More recently in Ibrahim Kamasi Amoni v Kenital Solar Limited [2018] eKLR the court held that:

For a reduction of salary to be valid, an employer ought to obtain the approval of an employee by communicating the reduction to an employee in a letter and causing the letter to be accepted by the employee.  This is because salary is a fundamental term of employment whose reduction has negative impact on an employee’s livelihood and should not be done arbitrarily or unilaterally by an employer.

Termination by redundancy

Section 40 of the Employment Act spells out the mandatory terms under which termination of employment on account of redundancy is to be effected for such termination to be valid:

1. where the employee is a member of a trade union, the employer must notify the union to which the employee is a member and the labour officer in charge of the area where the employee is employed of the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy; 
2. where an employee is not a member of a trade union, the employer must notify both the employee personally in writing and the labour officer; 
3. in the selection of employees to be declared redundant, the employer must demonstrate that they have had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy; 
4. where a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy exists; the employer must demonstrate that they have not placed the affected employees at a disadvantage for being or not being members of the trade union; 
5. the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash; 
6. the employer has paid an employee declared redundant not less than one month’s notice or one month’s wages in lieu of notice; and 
7. the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days pay for each completed year of service.

In Julie Topirian Njeru v Kenya Tourist Board (Cause 886 of 2010) [UR], the Court held that termination of employment through redundancy being an involuntary termination must be procedurally fair and substantively justifiable and must follow the law on unfair termination (proof of reason for termination) under sections 43 and 45 of the Employment Act.

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