Career advice · Updated October 2026

Unfair Termination in Kenya: What the Law Requires and the Compensation You Can Claim

Losing a job suddenly is hard enough without wondering whether your employer was even allowed to do it. Unfair termination in Kenya is defined and remedied in sections 41 to 50 of the Employment Act, 2007. The law puts the burden on the employer to justify a dismissal, and it gives labour officers and the Employment and Labour Relations Court (ELRC) power to award up to a year’s pay or order reinstatement. This guide sets out the test, the reasons that are never fair, and how to bring a claim.

The two-part test: a fair reason and a fair procedure

Section 45(1) says no employer shall terminate an employee’s employment unfairly. Section 45(2) then lists what the employer must prove. A termination is unfair if the employer fails to prove:

1. that the reason for termination is valid;
2. that it is a fair reason related to the employee’s conduct, capacity or compatibility, or based on the employer’s operational requirements; and
3. that the employment was ended in accordance with fair procedure.

Section 43 reinforces this. In any claim arising from a termination, the employer must prove the reason, and if it cannot, the termination is deemed unfair. The reason is what the employer genuinely believed at the time, not a justification found later.

Both halves matter. In Walter Ogal Anuro v Teachers Service Commission (2013), the ELRC accepted that TSC had a genuine concern, because the teacher’s certificate number had been used by an impostor, but found the dismissal unfair because the investigation and hearing fell short. Business Radar reported a similar outcome this month, where the court upheld a bank’s performance reason but still found the process flawed and awarded the ex-employee KSh 1.1 million.

What fair procedure looks like

Section 41 sets the minimum procedure before termination for misconduct, poor performance or physical incapacity:

• The employer must explain the reason it is considering termination, in a language the employee understands.
• The employee is entitled to have another employee or a shop floor union representative of their choice present.
• The employer must hear and consider what the employee and their companion say before deciding.

In practice, a defensible process usually involves a written notice or show-cause letter setting out the allegations, reasonable time to respond, access to the evidence relied on, a hearing, a written decision and a chance to appeal. Section 45(5) tells the labour officer or court to look at the procedure used, how the decision was communicated, how any appeal was handled, the employee’s conduct and capability, previous warning letters, the employer’s past practice in similar cases, and whether it issued a certificate of service.

Section 45(4)(b) adds a broad catch-all: a termination is also unfair if, in all the circumstances, the employer did not act in accordance with justice and equity.

Reasons that are never fair

Section 46 lists reasons that can never justify dismissal or any disciplinary penalty:

• pregnancy, or any reason connected with it;
• going on, or proposing to take, leave you are entitled to under law or contract;
• trade union membership, union activities, standing for union office or refusing to join a union;
• race, colour, tribe, sex, religion, political opinion or affiliation, national extraction, nationality, social origin, marital status, HIV status or disability;
• filing, or proposing to file, a complaint or legal case against the employer, unless it is shown to be irresponsible and without foundation; and
• taking part in a lawful strike.

A dismissal for any of these is automatically unfair under section 45(4)(a). Our guides to maternity and paternity leave and sick leave explain the leave protections in more detail.

Does length of service matter?

Section 45(3) still appears in the Act and says only employees with at least 13 months’ continuous service can complain of unfair termination. It should not stop you: the High Court declared it unconstitutional in Samuel G. Momanyi v Attorney General & another (2012), and the Court of Appeal upheld that view in Gogni Rajope Construction Ltd & another v Cornel Otieno Omondi (2025).

Probation is more complicated. Section 47(6) bars complaints by employees dismissed during probation, but courts have since held that probationary employees are entitled to be heard before their contracts end. Our probation period guide explains those decisions.

The compensation and other remedies available

Section 49 sets out what a labour officer may recommend, and section 50 tells the ELRC to be guided by the same provisions. The remedies include:

Twelve months is a ceiling, not an automatic award. Section 49(4) lists the factors that decide the figure, including your wishes, length of service, how far your own conduct contributed to the dismissal, how easily you can find comparable work, any severance or ex gratia payment already made, and whether you reasonably tried to reduce your losses. Courts are cautious about reinstatement, and section 49(4)(d) reflects the principle that employment contracts are rarely enforced by specific performance except in very exceptional circumstances.

All payments are subject to statutory deductions under section 49(2), so PAYE applies. Estimate your monthly gross and take-home figures with the net salary calculator, and add up the other money owed with the terminal dues calculator. Compensation is on top of dues you have already earned, such as unpaid salary and leave; see our terminal dues guide.

How to bring an unfair termination claim

1. Get the reason in writing. Ask for the termination letter, the minutes of any hearing and your certificate of service, which section 51 requires once you have worked four consecutive weeks.
2. Appeal internally if your contract, HR manual or collective agreement provides for it. The way an appeal is handled is one of the factors under section 45(5).
3. Go to the labour officer within three months. Section 47(1) allows a complaint to a labour officer within three months of the date of dismissal. Under section 48, advocates cannot represent parties before the labour officer, although trade union and employer organisation officials can.
4. File at the ELRC. Section 47(3) keeps your right to go to court as well. Section 89 generally sets a three-year limit for claims under the Act.

Section 47(5) splits the burden: you must show that a termination happened and was unfair, while the employer must justify the grounds. Keep your appointment letter, payslips, appraisals, emails and any warning letters.

If your employer said the job ended because of restructuring, read our guide to redundancy in Kenya, which has its own rules. If you were dismissed on the spot for alleged misconduct, see summary dismissal in Kenya. For the full map of your rights, start with our plain-English guide to the Employment Act.

When you are ready to move on, our free CV builder and the latest jobs in Kenya are a good place to start.

Key takeaways

• A termination in Kenya is unfair unless the employer proves a valid, fair reason and a fair procedure.
• Section 41 requires an explanation, the right to bring a colleague or union representative, and a genuine hearing.
• Dismissal for pregnancy, taking leave, union activity, discrimination or a lawful complaint is automatically unfair.
• Remedies include notice pay, up to 12 months’ gross pay as compensation, reinstatement or re-engagement.
• File with a labour officer within three months, or at the ELRC within three years.

Frequently asked questions

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