Closing Compliance Gaps: A One-Stop Legal Advisory on Handling Performance, Attendance, and Workplace Alcohol-Related Issues.

Redundancy

Redundancy is the loss of employment through no fault of the employee. It is a legally recognised ground for termination of employment in Kenya, governed by Section 40 of the Employment Act, 2007 and guided by ILO conventions. Employers must issue a written notice at least one month in advance to the affected employees, the labour officer, and the relevant union, where applicable. The notice should set out the reason, the scope of positions affected, and the termination date. In addition, employers must apply fair and objective selection criteria, considering seniority, skills, ability, and reliability rather than relying solely on the “Last In, First Out” principle. Once redundancy is confirmed, employers must make all statutory payments, including notice pay, accrued leave, and severance pay of not less than 15 days’ wages for each completed year of service.

In Mburu v Standard Chartered Bank Kenya Limited [2025] eKLR, the Court scrutinised the requirements of Section 40 of the Employment Act, 2007, which outlines mandatory conditions for redundancy, including proper notice, objective selection criteria, and payment of statutory dues, emphasising that these safeguards prevent employers from disguising unlawful termination as redundancy. Grace Mburu, who had risen to Principal Financial Crime Compliance (Grade 5), challenged her October 2019 termination on redundancy grounds, arguing that it was discriminatory and ill-motivated, particularly since a near-identical Grade 5 role was advertised just two months later. The Bank defended the decision, citing global restructuring under the ICEE project, which allegedly downgraded her role to Grade 6, a position she declined in favour of redundancy.

The Court, however, found the redundancy neither genuine nor bona fide. It noted the “striking similarities” between Mburu’s former role and the newly advertised position, dismissing the Bank’s attempt to distinguish them. The Court also highlighted the element of career progression as a valuable employment right, reasoning that for a professional who had steadily advanced in a specialised field, being offered a downgraded role, even with the same pay, was inherently regressive and detrimental. The Bank’s conduct was described as done in bad faith, amounting to unfair manipulation of the redundancy process.

Accordingly, the Court declared the redundancy unlawful and procedurally unfair. It awarded Mburu Kshs. 3,498,954 (six months’ salary) as compensation, with interest and costs, emphasising that redundancy cannot be misused as a backdoor to termination.

Poor Performance of Employees

Poor performance is recognised under the Employment Act, 2007, as a valid ground for

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termination, but the law requires that it be handled fairly, with proper evaluation, support, and a genuine opportunity for improvement. In Vincent Namai v National Bank of Kenya Limited (E039 of 2023), the Employment and Labour Relations Court emphasised that an employer who fails to consider an employee’s reasons for poor performance and provide adequate support commits an unfair and unreasonable labour practice. The case highlights that the duty of fairness goes beyond issuing performance targets; it requires mentorship, structured support, and reasonable accommodation of external factors affecting performance.

Mr. Namai, who joined the Bank in 1995 and rose to become a branch manager, enjoyed an exemplary career spanning 27 years until his termination in January 2022. His challenges began when he was transferred to the Kitengela branch at the height of the Covid-19 pandemic in March 2020. He argued that abrupt transfers, lack of structured support, and promotions without proper mentoring led to performance difficulties. Despite being placed on a performance improvement plan, his scores were deemed unsatisfactory. He maintained that the Bank ignored his pleas for support and failed to address his grievances, choosing instead to terminate his employment.

The Court agreed with Namai, holding that his alleged poor performance stemmed from the Bank’s defective internal systems and operational challenges, which should not have been visited upon him. It further found that the Bank was rigid in fixating on unsatisfactory scores without genuinely addressing his concerns. Declaring the termination unfair, the Court awarded him Kshs 5 million in compensation. The judgment reinforces that employers must handle poor performance comprehensively through repeated appraisals, supportive interventions, and fair hearings, as echoed by the Court of Appeal in National Bank of Kenya v Samuel Nguru Mutonya [2019] eKLR, where a single evaluation was deemed insufficient for dismissal.

Abscondment/Desertion of Work Duties

Under the Employment Act, 2007, abscondment from duty is treated as gross misconduct under Section 44(4)(a), permitting summary dismissal. However, employers remain bound by the procedural safeguards in Section 41(2), which require them to notify the employee, give them an opportunity to respond, and follow fair hearing procedures. In Corrugated Sheets Limited v Ngao [2025]eKLR, the Respondent had worked as a machine attendant since 2008, earning Kshs. 27,425 per month. Trouble arose when, after being accused of theft of scrap metal and arrested on February 23, 2023, he failed to attend work until March 10, 2023, when he claimed he returned but was told his employment had been terminated. He argued that this amounted to unfair dismissal.

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The employer, countered that Ngao was never terminated but had absented himself from duty without leave. They maintained that they made efforts to trace him, even notifying the Labour Office of his absence and arrest, and that his desertion justified summary dismissal under Section 44. They further disputed Ngao’s claim of reporting back to work on March 10, 2023, noting that the HR manager he cited was stationed elsewhere and the supervisor allegedly present was on leave. From their perspective, the matter amounted to lawful desertion of duty, not unlawful dismissal.

The Court, however, upheld the trial court’s finding that the termination was unfair. While acknowledging that absence without permission constitutes gross misconduct, it held that the employer must still demonstrate genuine efforts to trace the employee, issue notice, and invite them to explain their absence before declaring desertion and notifying the Labour Office. The appellant had failed to meet these procedural obligations. As a result, the appeal succeeded only partially: the Court upheld awards for compensation, notice pay, and salary for February 2023.

However, in Mumali v Blink Studio Limited [2025], the Employment and Labour Relations Court held that the termination of the Claimants employment was lawful, finding that he had repudiated his contract by failing to attend mandatory ISO 9001:2015 training, disregarding his obligation to work physically from the office by assuming he could work remotely, and breaching confidentiality by disclosing sensitive project information. The Court ruled that his conduct amounted to abscondment of duty and a clear intention not to return, with the termination notice serving only as the employer’s acceptance of this repudiation. Consequently, Mumali’s claims for compensation, severance pay, bonuses, house allowance, and leave pay were dismissed, though the Court directed the employer to issue him a Certificate of Service. Part of the Respondent’s counterclaim succeeded, with orders compelling Mumali to return a CAD workstation and an injunction restraining him from using or disclosing confidential information.

Intoxication As A Ground for Dismissal

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In Chirchir v AVSI Foundation[2025]eKLR, the Employment and Labour Relations Court addressed the issue of intoxication as a ground for dismissal under the Employment Act, 2007. While Section 44(4)(e) recognises drunkenness as gross misconduct, the Court reiterated that mere consumption of alcohol is insufficient to justify dismissal unless it renders the employee unwilling or incapable of performing their duties. Importantly, Section 43 places the burden on the employer to prove valid reasons for termination with cogent evidence that would convince a reasonable employer.

The Claimant, was a Project Coordinator on a fixed-term contract who was accused of reporting to work intoxicated on September 6, 2023. Her employer, the AVSI Foundation, claimed she admitted to drunkenness during a disciplinary session and presented witness testimony alleging she appeared heavily intoxicated. Chirchir, however, denied the allegations, maintained she was a teetotaler, and challenged both the substance and fairness of the process. The court found the Respondent’s evidence unreliable, noting contradictions in witness accounts, the absence of scientific proof such as alcohol tests, and unsigned disciplinary minutes that could not credibly establish an admission.

Beyond the lack of proof, the Court held that the Respondent violated Section 41 of the Employment Act by failing to issue a proper notice to show cause, disguising the October 2, 2023 meeting as a general meeting rather than a disciplinary hearing, denying the Claimant the right to be accompanied, and failing to provide an appeal process. Consequently, the termination was declared unlawful and unfair. The Court awarded Chirchir a three-month’s salary compensation and, in lieu of notice, dismissed other claims such as medical expenses and general damages for lack of sufficient evidence.

Written by Cynthia Seeyian and Eric Kivuva

This article is for informational purposes only and does not constitute legal advice. For tailored guidance or support in navigating this transition, please contact us at advisory@mckayadvocates.com