What Does the Labour Law on Resignation in Kenya Say?

Resignation is a critical aspect of employment, allowing employees to exit their positions while ensuring compliance with legal and contractual obligations. In Kenya, the Employment Act, 2007, governs employment relationships, including resignation procedures, notice periods, and related entitlements. Additionally, the Constitution of Kenya and other employment law provisions set the foundation for fair labour practices. Understanding these legal provisions is essential for both employees and employers to ensure a smooth transition.

1. Notice Period Requirements

Under the Employment Act, an employee who wishes to resign must provide notice in accordance with their contract of employment. If the contract does not specify a notice period, the law provides default periods based on the pay cycle:

• Daily-paid employees – At least one day’s notice.
• Weekly-paid employees – At least seven days’ notice.
• Monthly-paid employees – At least one month’s notice.

Failure to provide the required notice may result in the employee forfeiting their salary equivalent to the employee’s notice period or the employer withholding final dues to cover this period. However, an employer may waive the notice requirement at their discretion.

2. Payment in Lieu of Notice

Employees who wish to resign immediately without serving the notice period may opt to pay their employer an amount equivalent to their salary for the termination notice. Similarly, an employer can terminate an employee’s contract immediately by paying the equivalent notice period salary.

3. Resignation and Terminal Dues

Upon resignation, employees are entitled to their terminal dues, which may include:

• Salary earned up to the last working day.
• Payment for any accrued but unused annual leave days.
• Any other contractual benefits, such as bonuses or commissions, depending on the employer’s policy.

4. Constructive Dismissal and Summary Dismissal

In some cases, an employee may resign due to unbearable working conditions created by the employer. This is referred to as constructive dismissal. If an employee can prove that they were forced to resign due to unfavorable working conditions, they may have grounds for claiming unfair termination of employment under Kenyan employment law.

On the other hand, summary dismissal occurs when an employer terminates an employee without notice due to gross misconduct. If an employee is subjected to disciplinary proceedings or a disciplinary hearing, they must be given a fair chance to defend themselves before any action is taken.

5. Employer Obligations on Resignation

Upon receiving a resignation letter, the employer must:

• Acknowledge and accept the resignation in writing.
• Ensure proper clearance procedures, including returning company assets.
• Process and pay final dues within the legally acceptable timeframe.
• Issue a Certificate of Service to the resigning employee, as mandated by law.

If any disputes arise regarding resignation or terminal benefits, they can be resolved through dispute resolution mechanisms, including the Labour Relations Court.

6. Resignation and Non-Compete Clauses

Some employment contracts may include non-compete clauses that restrict an employee from working with competitors or starting a similar business within a specified period after resignation. While such clauses are enforceable, they must be reasonable in duration and geographic scope to be upheld in a Kenyan court.

7. Collective Bargaining and Resignation

For employees covered by collective bargaining agreements, resignation terms may be subject to additional conditions agreed upon between the employer and employee representatives. Such agreements may stipulate special provisions regarding notice periods, final dues, and exit procedures.

Conclusion

Understanding resignation procedures under Kenyan employment law ensures compliance and prevents disputes between employees and employers. Both parties should review their contract of employment carefully and adhere to the law to facilitate a smooth and legally sound transition. If in doubt, seeking legal advice or consulting with the Ministry of Labour can provide further clarity on resignation rights and obligations. For cases involving unfair treatment or disputes, the Labour Relations Court serves as a key avenue for legal redress, ensuring that the rights of both employees and employers are protected.

Frequently Asked Question

Can an employer reject or refuse to accept an employee’s resignation in Kenya?

An employer cannot legally refuse an employee’s resignation. Once a resignation letter is submitted and the notice period is served (or paid in lieu), the employer must process it. However, pending disciplinary proceedings or contractual obligations may affect the resignation process, requiring legal and contractual considerations