Career advice ยท Updated November 2026
How to Terminate an Employee in Kenya Legally: Employer Steps
To terminate an employee in Kenya legally, an employer needs two things: a valid and fair reason, and a fair procedure. The Employment Act, 2007 puts the burden of proving both on the employer. In practice that means investigating first, telling the employee the reason in writing, holding a hearing where they can bring a colleague or union representative, giving the right notice or pay in lieu, paying final dues and issuing a certificate of service. Skip a step and the Employment and Labour Relations Court (ELRC) can award up to 12 months’ wages, even where the reason was genuine.
Checked on 12 November 2026 against the Employment Act, 2007 (sections 35, 36, 40 to 47, 49 and 51) as summarised in our employee-side guides. This is general guidance for employers, not legal advice. For a senior dismissal, a large redundancy or a case already before a labour officer, speak to an employment lawyer.
The legal test every termination must pass
Section 45 of the Employment Act says no employer shall terminate employment unfairly. A termination is unfair if the employer cannot prove that the reason is valid, that it is a fair reason related to the employee’s conduct, capacity or compatibility, or to the employer’s operational requirements, and that the employment was ended using a fair procedure. Section 43 adds that if the employer cannot prove the reason, the termination is deemed unfair.
So the question is never just “can I let this person go?” It is “can I prove why, and can I show I followed the process?” Keep that in mind from the first incident, because the paper trail you build is your evidence later.
Reasons you can never rely on
Section 46 lists reasons that are automatically unfair. You cannot dismiss or discipline anyone because of pregnancy, because they took or planned to take leave they are entitled to, for trade union membership or activity, for race, tribe, sex, religion, political opinion, HIV status, disability and similar grounds, for filing a complaint or case against you (unless it was irresponsible and baseless), or for joining a lawful strike. If the real reason is on that list, no amount of procedure will save the decision.
Step-by-step: how to terminate an employee in Kenya
The steps below fit dismissals for misconduct, poor performance and incapacity, which are the cases section 41 covers.
- Investigate and gather evidence. Write down what happened, when, and who saw it. For poor performance, keep the targets you set, the reviews you held and any support or training you offered. Courts look closely at whether the employer tried to fix performance before ending the job.
- Issue a show-cause letter. Set out each allegation clearly, attach or describe the evidence, and give a reasonable time to respond in writing. Our guide to the show-cause letter in Kenya explains what a good one contains.
- Invite the employee to a hearing. Section 41 requires you to explain the reason you are considering termination in a language the employee understands, to allow them another employee or a shop floor union representative of their choice, and to hear and consider what they and their companion say. Give the date, time and place in writing, and tell them they can bring a companion.
- Hold the hearing and minute it. Let the employee answer each allegation and question witnesses where relevant. Record who attended, what was said and any documents produced. Ask the employee to sign the minutes or note that they declined.
- Decide, and put the decision in writing. Consider their explanation honestly. A lesser penalty, such as a written warning, may be fairer for a first or minor offence. If you terminate, the letter should state the reason, the effective date, the notice or pay in lieu, the final dues and any right of internal appeal.
- Allow an appeal. The Act does not set a single appeal format, but section 45(5) tells courts to consider how any appeal was handled. A short internal appeal to a manager not involved in the first decision shows good faith.
- Pay final dues and issue a certificate of service. Section 51 requires a certificate of service for every employee leaving after four or more consecutive weeks of work. Our certificate of service generator produces a compliant one in minutes.
Notice periods and pay in lieu
Section 35 links minimum notice to how often the employee is paid. Where the contract gives longer notice, the contract applies.
| How the employee is paid | Minimum notice under the Act |
|---|---|
| Daily | None: the contract can end at the close of any day |
| Weekly or fortnightly | Written notice ending at the close of the next pay period |
| Monthly or longer | 28 days’ written notice |
| On probation (section 42(4)) | 7 days’ notice or 7 days’ wages in lieu |
Section 36 lets you end the contract at once by paying the remuneration the employee would have earned during the notice period. Remuneration includes regular allowances such as house allowance, not just basic pay. Giving notice does not remove the need for a fair reason: section 35(4)(a) keeps the employee’s right to challenge the fairness of the termination. Our termination notice guide has worked examples.
Gross misconduct and summary dismissal
Section 44 allows summary dismissal, meaning termination without notice or with less notice than the contract requires, where the employee has fundamentally breached their obligations. It lists examples such as absence without leave or good cause, intoxication at work, wilful neglect of work, abusive behaviour, refusing a lawful instruction, being arrested for a cognisable offence and not released within 14 days, and committing or being reasonably suspected of an offence against the employer or its property. Summary dismissal still needs a hearing under section 41. Read our guide to summary dismissal in Kenya before you act.
Probation, redundancy and fixed-term contracts
Probation. Section 47(6) bars unfair termination complaints by employees dismissed during probation, but the courts have since held that probationary staff are still entitled to be told the reason and heard. Follow a short version of the steps above. See our probation period guide.
Redundancy is a separate process under section 40. You must notify the union and the area labour officer at least one month before the intended date (or the employee personally and the labour officer if they are not unionised), select fairly using seniority, skill, ability and reliability, pay any leave due in cash, give one month’s notice or pay in lieu, and pay severance of at least 15 days’ pay for each completed year of service. The Court of Appeal has held that the notice must lead to real consultation. Our redundancy guide covers the case law, and Business Radar’s severance pay calculator helps you budget.
Fixed-term contracts that simply run to their end date usually end without a termination process, but ending one early is a termination and the same rules apply.
What it costs to get it wrong
Under section 49, a labour officer or the ELRC can order notice pay, wages and losses up to the date of termination, and compensation of up to 12 months’ gross wages, or order reinstatement or re-engagement. Courts regularly find dismissals unfair on procedure alone. Business Radar reported a recent case where the court accepted a bank’s performance concerns but still awarded the former employee KSh 1.1 million over a flawed dismissal process.
Final dues checklist for employers
- Salary for days worked up to the termination date.
- Notice pay, if you did not let the employee work the notice period.
- Cash for accrued, untaken annual leave.
- Severance pay in a redundancy, and any service pay or gratuity due under the contract.
- Lawful deductions only, with PAYE worked out correctly. Business Radar explains how KRA taxes severance, notice and leave pay, and our final dues calculator totals each item.
Prevention is cheaper than litigation. A clear employment contract, a written disciplinary policy and regular performance reviews make every later decision easier to defend. For the employee’s view of the same rules, see our guide to unfair termination in Kenya, and visit the employers hub for more HR guides.
Frequently asked questions
Can an employer in Kenya terminate an employee without a reason?
No. Under sections 43 and 45 of the Employment Act the employer must prove a valid and fair reason and a fair procedure. Giving notice or paying in lieu does not remove that duty.
What notice must an employer give in Kenya?
For monthly-paid staff, at least 28 days written notice under section 35, or longer if the contract says so. Employees on probation are entitled to 7 days notice or 7 days pay in lieu.
Is a disciplinary hearing required before dismissal?
Yes. Section 41 requires the employer to explain the reason in a language the employee understands, allow a colleague or union representative to attend, and hear the employee before deciding, even in summary dismissal.
How much can the court award for unfair termination?
Under section 49 a labour officer or the ELRC can award notice pay, lost wages and compensation of up to 12 months gross wages, or order reinstatement or re-engagement.