An employer can give an employee the correct notice, pay all amounts due under the contract and still end up defending an unfair termination claim. That is the part of Kenyan employment law that is sometimes underestimated. A termination clause may state that either party may terminate the employment relationship by giving notice or paying instead of notice. From a contractual perspective, that clause determines how notice is handled. It does not automatically answer the separate question of whether the employer had a lawful basis for ending the relationship in the first place.
Kenyan courts have repeatedly treated those as different questions. The Employment Act requires more than an exit letter and a final payment. The reason for termination matters. The fairness of that reason matters. The procedure followed before the decision matters. This is why the phrase “termination without cause” should make an HR Director or senior manager pause before acting.
Giving notice is not the same as proving a fair reason
Section 35 of the Employment Act deals with notice requirements in the termination of employment. Sections 43 and 45 deal with something deeper: justification and fairness. Section 43 places responsibility on the employer, where termination is challenged, to prove the reason or reasons that caused the employment relationship to be terminated. Section 45 provides that termination is unfair where the employer cannot show that the reason was valid, fair and connected to the employee's conduct, capacity, compatibility or the employer's operational requirements and that fair procedure was followed. The Court of Appeal reinforced this distinction in Kabura v Board of Trustees National Social Security Fund in 2025. The Court stated that even where notice is issued, the reasons leading to termination must still be given and those reasons must be genuine, fair and valid. The practical implication is important. An employer should not assume that a contractual clause allowing termination on notice creates a separate route around the Employment Act.
Notice answers the question, “How is the employment relationship being brought to an end?
The law still asks, “Why?”
The process matters before the decision is made.
Where termination is being considered because of misconduct, poor performance or physical incapacity, section 41 creates an additional procedural obligation. The employee must be informed of the reason being considered and allowed to respond before the employer reaches the final decision. The employer must then consider that response. This is not a ceremonial meeting to confirm a conclusion already reached. If management had written the termination letter before the hearing, announced the decision before receiving the employee's explanation or treated the meeting merely as an administrative step, the organisation may have undermined the very process meant to protect the decision. That is why a hearing should never begin with an outcome already settled. The purpose is to test the information available to the employer before the employment relationship is ended. Sometimes the employee's explanation will not change the decision. But the employer must still be able to show that the explanation was genuinely heard and considered.
A real problem does not excuse a poor process.
This is where organisations often expose themselves unnecessarily. The employee may genuinely have a performance problem, there may be serious misconduct, the working relationship may have deteriorated or even management may have legitimate operational concerns. All of those situations can justify action when the facts support them. The mistake is assuming that the seriousness of the concern makes the procedure less important. It often makes the procedure more important. A 2026 ELRC decision in Chandaria v Mungai restated the two central requirements under sections 43 and 45: the employer must show a valid and fair reason and demonstrate that termination occurred through fair procedure. The legal question is therefore rarely limited to whether management was unhappy with the employee. The organisation must be able to explain what happened, what evidence it relied upon, what opportunity the employee had to respond and why termination became the reasonable outcome. That record is what makes an employment decision defensible.
Redundancy is different, but it is not a shortcut.
Redundancy requires separate treatment because the employee is not being accused of misconduct or poor performance. The reason arises from the employer's operational requirements. However, that does not mean an organisation can simply label a position redundant and proceed directly to payment. Section 40 of the Employment Act sets out specific requirements for redundancy, including notice, consideration of the applicable selection criteria and the payment of statutory entitlements such as severance pay. Kenyan courts continue to examine both the reality of the operational reason and compliance with the redundancy process. In Nation Media Group Limited v Munene, the Court of Appeal considered both whether there was a fair and valid basis for the redundancy and whether the required procedure had been followed. This distinction is important because redundancy cannot be used to disguise another reason for termination.
If the real issue is performance, manage performance.
If the real issue is misconduct, investigate misconduct.
If the position has genuinely become unnecessary because of restructuring or operational change, then redundancy law should guide the process.
Choosing the wrong legal route can turn an otherwise legitimate business decision into an avoidable dispute.
Payment does not cure an unfair termination.
Another common assumption is that a generous exit package will somehow compensate for a defective process.
It may reduce the financial dispute between the parties.
It does not rewrite the way the decision was made.
The Supreme Court in Kenfreight (EA) Limited v Benson K. Nguti confirmed that an employment termination can still be found unfair even where payment was made instead of contractual notice. Once a termination is challenged and found unfair, the remedies available under the Employment Act come into consideration. This matters for employers because notice pay, severance or an ex gratia payment should never be treated as a substitute for substantive and procedural fairness. Money settles financial obligations; it does not necessarily cure a flawed employment decision.
The most dangerous termination is often the one management believes is obvious
When a workplace problem has existed for months, senior managers often become convinced that everyone already understands why the employee must leave. That confidence can create poor processes:
Documentation becomes brief because the history is considered obvious.
A hearing becomes rushed because management believes the explanation cannot possibly change anything.
The letter becomes vague because senior leaders assume the employee already knows what went wrong.
Courts do not assess what everyone inside the organisation privately understood; they assess the evidence. That is why proper HR documentation matters. A defensible termination process should show the employer's concern, the evidence supporting it, the employee's response, the consideration given to that response and the basis upon which the final decision was reached. Where those pieces are missing, management may later find itself trying to reconstruct a process that should have been recorded while it was happening.
Before the next termination meeting, answer these questions.
A prudent employer should be able to explain, before making the final decision, what the actual reason for termination is and whether the available evidence supports that reason.
Management should also establish which provision of law and which internal policy apply to the situation, whether the employee has been allowed to respond as required by law and whether the documents being prepared accurately reflect what has happened.
The organisation should also ask whether the decision would still appear fair if every document in the file were later examined by an independent third party.
That is a useful discipline because employment disputes often emerge months after the decision, when memories are weaker and only the written record remains.
Termination is a management decision governed by law.
No organisation should be prevented from dealing with genuine misconduct, persistent poor performance, incapacity or legitimate operational change. Effective management sometimes requires difficult employment decisions. The objective of fair termination law is not to make every employee impossible to dismiss. It is to ensure that employers can explain and defend why an employee was dismissed and how the decision was reached. That is why notice alone is not enough.
The stronger question before any exit is this: If this termination is challenged six months from now, can the organisation prove both the reason and the process? If the answer is uncertain, the safest time to correct the problem is before the termination letter is issued.
At Eagle HR Consultants, we support employers with HR compliance reviews, disciplinary procedures, performance management, redundancy planning and termination process advisory. Our role is to help management deal with difficult employment decisions in a manner that is operationally sensible, procedurally sound and defensible under Kenyan employment law. If your organisation is preparing for a sensitive employee exit, restructuring or disciplinary process, speak to our HR Advisory team before the final decision is made.
