Remedies for Unfair Termination in Kenya

What does the court award for unfair dismissal in Kenya? From 12 months’ compensation to reinstatement, learn the 2025 ELRC remedies and how to mitigate risks.

Unfair termination remains one of the most litigated and financially damaging areas of employment law in Kenya. Between 2023 and 2025, the Employment and Labour Relations Court (ELRC) delivered hundreds of judgments awarding reinstatement, compensation, salaries, damages, and costs—sometimes totalling millions of shillings per claim.

In a judicial environment where the courts continue to interpret Sections 41, 43, 45, and 49 of the Employment Act with increasing rigidity, employers must understand the remedies the court typically grants, the principles guiding awards, and the evidentiary burden placed on employers. Through its employment litigation practice, WKA Advocates frequently handles cases where the question is not only whether termination was lawful, but also what remedies the court may impose.

This article provides a comprehensive guide to these remedies as interpreted in 2024–2025 jurisprudence.

1. Overview: What Constitutes Unfair Termination?

Under Sections 45 and 47(5) of the Employment Act, termination is unfair if the employer fails to prove:

1. Substantive fairness – a valid and justifiable reason (performance, misconduct, incapacity, redundancy)

2. Procedural fairness – adherence to the Section 41 hearing procedure

Where an employer fails either limb, the employee becomes entitled to remedies. In 2025, the ELRC has emphasized that procedural fairness cannot be substituted by substantive fairness, even where an employee appears guilty. This dual test forms the basis of the remedies discussed below.

2. Primary Remedies Awarded by the ELRC

Section 49(1) of the Employment Act empowers courts to grant several remedies—alone or combined. Below are the most common, as reflected in recent judgments.

This is the most frequently awarded remedy. The court may award the equivalent of up to 12 months’ gross salary. The amount depends on factors under Section 49(4), including:

• employee’s length of service

• whether the employee contributed to the termination

• past conduct

• employer’s compliance with procedure

• legitimate expectations

• employee’s efforts to mitigate loss

2025 Case Trend: In Okoth v EuroTech Kenya (2025), the court awarded the full 12 months’ compensation after finding gross procedural unfairness even though the employer had a seemingly valid reason. WKA Advocates regularly assists employers by structuring their disciplinary processes to ensure they can later demonstrate compliance with Section 49(4), reducing exposure to high compensation awards.

B. Salary in Lieu of Notice

Under Section 35, employees must receive notice before termination unless dismissed for gross misconduct. Where notice is not provided, courts award pay in lieu of notice, often:

• 1 month for monthly employees

• or as per contract (some contracts provide 2–3 months)

In Ndungu v RedSky Holdings (2024), the court awarded three months’ notice pay because the employment contract provided for it.

C. Accrued Leave Days (Unpaid Leave)

Courts routinely award payment for unutilised annual leave, supported by the employer’s leave records. If records are missing or incomplete, the presumption is made in favour of the employee. Many ELRC losses arise from poor documentation—something WKA Advocates often highlights during HR audits.

D. Unpaid Salaries and Unlawful Deductions

Where an employer withholds salary, makes deductions without consent, or delays payment during the termination process, courts award:

• outstanding wages

• refund of illegal deductions

• interest at court rates

ELRC is increasingly strict on payroll irregularities under Section 19 of the Employment Act.

E. Reinstatement (With or Without Back Pay)

Reinstatement is the most drastic remedy and is rarely granted—but still possible, especially where the employee:

• was terminated unfairly

• held a critical role

• had a clean record

• filed the claim within 3 years

• worked in the public sector

• suffered unlawful victimisation

In Wanjiru v KPC (2025), the court reinstated the employee with full back salary of 2.5 years, citing constitutional violations. Reinstatement is most common where the termination violated Article 47 (fair administrative action), gender rights, pregnancy protections, or union rights.

F. Re-engagement

Instead of reinstating the employee to the exact former role, the court may order the employer to re-engage them in a similar position with no loss of benefits. This remedy is often used in cases involving restructuring or where the original position no longer exists.

G. Certificate of Service

Section 51 makes this mandatory. Courts always order the issuance of a certificate of service regardless of whether the termination was fair.

3. Additional Remedies Emerging from 2024–2025 Case Law

A. Constitutional Damages

Courts increasingly award damages for violations of:

• Article 41 (labour rights)

• Article 47 (fair administrative action)

• Article 27 (non-discrimination)

In Gichuki v Kenya Power (2025), constitutional damages were awarded in addition to statutory remedies. This trend is most visible in cases involving pregnancy discrimination, victimisation, harassment, union-related dismissal, and whistle-blower retaliation.

B. Damages for Emotional Distress or Dignity Violation

ELRC has begun awarding damages where termination is humiliating or conducted in bad faith—public shaming, security escorting employees out without due process, or termination through WhatsApp messages. WKA Advocates has observed this trend across cases involving senior executives or long-serving staff where termination was executed harshly.

C. Costs of the Suit

While ELRC is traditionally lenient on costs, courts increasingly award costs where employers acted maliciously, ignored statutory processes, or defended claims frivolously.

4. How Courts Calculate Remedies (The Methodology)

The ELRC applies a structured evaluation under Section 49(4).

WKA Advocates frequently prepares Section 49(4) mitigation strategies for employers facing litigation, which significantly reduces compensation awards.

5. Situations Where the Court Reduces or Declines Remedies

While the law protects employees, it also penalises misconduct. Courts reduce awards where:

• employee contributed to the dismissal

• misconduct was proven but procedure was defective

• employee failed to mitigate loss

• employee declined redeployment

• termination was partly justified

In Njeri v Potentia Africa (2024), compensation was reduced by 50% because the employee engaged in misconduct, though procedure was flawed.

6. Why Employers Lose Unfair Termination Cases

Common employer failures include issuing termination without a Section 41 hearing, using generic termination letters, lacking minutes of disciplinary hearings, documentation errors (especially PIP processes), unclear employment contracts, non-existent leave records, misclassification of staff, and failing to give reasons for termination. These gaps frequently arise from outdated HR practices—problems WKA Advocates regularly identifies when conducting employment compliance audits.

Conclusion: Remedies for Unfair Termination Are Costly—and Increasing

The modern Kenyan labour environment is unforgiving. Courts are awarding higher compensation, expanding constitutional remedies, and scrutinising employer processes more aggressively than ever before. For employers, the key to avoiding liability is lawful processes, complete documentation, legally sound employment contracts, and adherence to the Employment Act and modern jurisprudence. In managing high-stakes termination decisions, organisations increasingly seek legal guidance to avoid exposure to the broad and growing range of remedies granted by the courts.

For Termination Reviews, HR Audits, or Legal Representation in ELRC Matters William Karoki Advocates (WKA Advocates)

+254 798 035 580

info@wka.co.ke

Valley View Business Park, 6th Floor, Suite 35, City Park Drive, Parklands, Nairobi

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