Redundancy in Employment Law

Well-versed in Dispute Resolution, Employment Law, and Business Rescue, Restructuring & Insolvency, Christine Mugenyu in our Nairobi office shares her view on successfully managing the redundancy process with Channel Africa.

17 Apr 2023 07:24 Minutes Podcast

At a glance

Well-versed in Dispute Resolution, Employment Law, and Business Rescue, Restructuring & Insolvency, Christine Mugenyu,  Senior Associate in our Nairobi office shares her view on successfully managing the redundancy process with Channel Africa.

Redundancy in Employment Law

Redundancy in Employment Law


Redundancy in Employment Law


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Channel Africa: That is not the conversation of the moment. Not at all. You're about to touch base on very interesting conv... and you know, you were just walking me through, some of your fines, when it comes to redundancy in the workplace. I mean, you know, our guest, Christine Mugenyu, who's a senior associate at Cliffe Dekker Hoffmeyr is the expert on this, and she'll talk to us about just what the processes are in terms of managing a successful, a redundancy process in the workplace. Christine, a very good afternoon to you and thank you very much for joining us.

Christine Mugenyu: Good afternoon. Thank you so much. I'm so happy to be here.

Channel Africa: Well, we're glad to have you. Christine, if you could just perhaps lay the land by explaining what it is. What is redundancy and in what situations is it implemented in the workplace?

Christine Mugenyu: Okay, thank you. Basically redundancy, in other places people know them as layoffs, others call them retrenchment. But basically this means,

It's a termination of employment for reasons that are not attributable to the employee. So this means that as an employee your employment is terminated for reasons that are not within your control.

So some of these factors, for example, are that maybe the organization you work for has undergone some restructuring. Maybe there's a merger or an acquisition and now some of the roles that are in the organization, have now been declared redundant. And I think just to add a few of the other instances when a redundancy can happen is, for example, maybe there's an automation or incorporation of technology in the place of work that you are in. And now for some reason your services are no longer required because now the use of technology and automation of the system. So those are the kinds of instances when, for example, a redundancy can be declared by a company.

And also not forgetting the inability of the company to maybe pay wages and salaries. Especially due to the economic situation right now, I think in most countries. I think in the whole world, we are really struggling. You are finding that for so many businesses, they're unable to keep up with paying wages and salaries.

Channel Africa: Yeah. Now Christine, what's really interesting is that, I'm not too sure if I'm getting this correctly, but you're based in Kenya, yes?

Christine Mugenyu: Yes, I am.

Channel Africa: Lovely. And obviously the economical climate in Kenya is proving to be a very harsh one in that the cost of living is rising. Now, as, and I say this from the stance of an individual who's being laid off or being told that, listen, your position in the workplace is redundant and therefore we cannot afford to continue paying you for something that's already being done or serviced within the workspace.

How do you go about handling that from the employee's and / or the former employee's and legally, are there ways and routes in which you can prove that; Listen, I'm not necessarily redundant. Or I can bring other skill sets that are necessary in this particular company?

Christine Mugenyu: Yeah, the law actually protects this kind of situation when it comes to redundancies and there's a set of procedures in the Employment Act in Kenya, which an employer must follow in terms of the steps that must be taken. Because we have seen that our laws are really focused on consultation and also having open communication because you see, as you understand, this is someone's livelihood, this is someone's life. So taking it away without involving them is also very detrimental. So you find that, our law has steps that must be followed in terms of even timelines.

There are times, there are specific notice periods that must be adheared to by an employer. For example, even before considering the specific people or positions to be declared redundant, there must be notices that go out for at least one month. So you find that even during this one month, there are consultations and there are also discussions that are held between the employers and the employees, which makes sure that they're able to understand what is happening and what to expect.

And I think that is very important because as we have just explained, it's a very challenging time for the organization and also more so for the employees because I mean, you are taking away someone's livelihood. So there are those safeguards in the law to make sure that that is done in a very humane way, and it is done taking into account the legal standard.

Channel Africa: The voice of Christine Mugenyu, who is a senior associate at Cliffe Dekker Hofmeyr, joining us to share her views on how we can successfully manage redundancy, or the process thereof in the workspace. Christine, let's take a bit of a breather. When we get back, we'll touch base on this conversation and sort of tilt further towards how we can mitigate the conversation between employer and employee. 21 minutes after 3:00 PM Central African time.

It is still the upside and we are in conversation with Christine Mugenyu, who is the senior associate at Cliffe Dekker Hofmeyr, speaking to us about the process of redundancy in the workplace. Now, Christine, you mentioned just before the break that courts typically are reluctant to interfere in these processes unless it's evident that there was not sufficient reason to place one on redundancy. Have there been cases where employees are able to get the financial records of a company and prove that indeed, there was no reason for them to be placed on redundancy because the company can still afford, they're not relocating, none of the quintessential reasons that a company would place one on redundancy such as relocation, a shrinking profit margin and the like.

Christine Mugenyu: Yeah. What we found most of the times when employees, for example, go to court, maybe to challenge a redundancy, the burden normally shifts, of course, to the employer to prove the reasons for the redundancy. So the courts now normally investigate the reasons that are put forward because the only consideration sometimes is not only in terms of the budget or the ability to pay employees. Sometimes they look at the organizational requirements, in terms of what made the company declare the redundancy.

So it is up to the employer to be able to prove that the reasons for declaring the redundancies were valid in that it was a managerial decision. And we have seen that, because once an employee is able to prove that these reasons do exist and they are valid, and that the process also was followed in declaring the redundancies, that they actually are called redundancies carried out by organization.

So it is not only on the aspect of inability to pay, for example, wages and salaries, but it is also looked at holistically. In terms of, what reasons has the employer advanced?

Channel Africa: Yeah. Now, Christine, on that same train of thinking, we've seen instances where a company would release a set number of employees claiming that these are all redundant positions and therefore they cannot continue to fill their posts. Yet, still go back to the very same employees and ask them to come back to the office. How do we then sort of tackle that conversation legally? Because you had certified that their role in the company was redundant and now upon calling them back are sort of disproving your whole argument.

Christine Mugenyu: So sometimes what happens is one of the ways that companies can be able to reduce the redundancy processes, or reduce the instances when they have to declare positions redundant is that, one of the ways is that they can be able to redeploy some of the employees in terms of maybe, for example, you have a department in the organization that is maybe busier than another department.

So you find that you can be able to redeploy these employees from one department to another, which means that then you would be able to avoid declaring a redundancy. And another thing which we have seen organizations doing, just to reduce the impact of redundancy is reskilling. This is where you find out if, for example, an employee has a different set of skills that is required by the organization. You can also explore that as an option in terms of finding a way of not declaring employees redundant.

And I think another way that we have seen also organizations or employing or doing is in terms of salary reductions. Well, but of course this must be in line with the employees giving a consent or giving consent in terms of the salary being reduced so that now they can be able to manage their salary need for the organization. Those are some of the reasons we have seen, which we have seen employers during this tough time. They're trying to tighten their bills and not have to declare positions redundant and have people go home.

Channel Africa: And let's talk about the remuneration process then, Christine, when one is being made redundant. Do you get a payout? What are you entitled to in that process? And in the event that you are brought back, can you be taken back at a lower salary base?

Christine Mugenyu: The law provides for the package that you should be given in terms of what you are entitled to. And we here in Kenya, we call it severance pay and it's normally calculated as 15 days salary for every year worked.

So, for example, if you've worked for five years for the company and maybe your position has been declared redundant, then you are entitled to 15 days pay for each of the five years that you've worked. And then you are also entitled to any unpaid salary that you have not been paid, and also any unpaid leave days that maybe you have accrued, but have not taken. That is the package normally, that is a package that you're entitled to if your position is declared redundant.

You had asked me in terms of if you come back in the company. If you were to come back to the company, it's all about renegotiating. As long as you're okay with the package you've being given, the salary you've been given, then at that point then you will of course be offered a new contract and a new terms of service. It's all about consent.  And as long as the employee agrees, then it is valid.

Channel Africa: All right, Christine, we want to thank you so much for your time and obviously just educating us on the realities of redundancy in the workspace. Thank you again. All right.

Christine Mugenyu: Thank you for having me. Thank you so much.

Channel Africa: Lovely. The voice of senior advocate at Cliffe Dekker Hofmeyr, Christine Mugenyu joining us on the show this afternoon. Really just giving us, you know, I think I learned so much. Firstly, just put it out there. The realities of the position. Also, I'm not gonna lie, I think I stood and I sort of tilted back and I thought, how does this manifest in the radio world?

You know, because everybody's given such a specific role. I don't want to say it's niched, but it's almost so specific to the T that I would be shocked if I were to see redundancy in the workspace, particularly in radio. Would you? We're movin so much more to generalist.

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