The Boardroom Surprise
It’s a Monday morning. You’re called into the boardroom. Across the table sits the HR Manager. A document is slid gently across the table.
You open it, and the header reads: ‘Redundancy Notice’.
For many professionals, this moment feels abrupt and deeply personal and it is. However it is also a legal one. A recent decision involving a senior employee of Java House at the Employment and Labour Relations Court offers some insights on this. Let’s share a few lessons from it.
The Legal Reality
Redundancy is a common occurrence in business. Redundancy is not termination of employment. Section 40 of the Employment Act defines redundancy as an involuntary loss of employment due to operational requirements. Whether it’s due to corporate restructuring, a technological shift, or a merger, the law is clear: redundancy is about the role disappearing and not your performance failing.
The Statutory Minimum: These are your must-haves
The procedure and set of rules around redundancy are prescribed by the law. At a bare minimum, the law entitles you to:
- Severance Pay: At least 15 days’ pay for every completed year of service.
- Notice Pay: One month’s notice (or one month’s salary in lieu of notice).
- Leave Pay: Payment for all accrued but untaken leave days.
The part that most people miss
In the Mudachi v Nairobi Java House Limited & another case, the court ruled that although the employee signed a Full and Final Settlement, he was still entitled to over $200,000 in vested shares. Read more.
Why? A general waiver does not automatically cancel out assets you have already earned such as:-
- ESOP shares
- Bonuses
- Commissions
The Takeaway
Before you pick up that pen and sign any paperwork:
- Understand your rights
- Review what you are being asked to give up and
- Always get legal advice – Knowledge is power !
Because once you sign, leverage disappears.
Need a Professional Review?
If you are facing a redundancy or have questions about an exit package, our team at Waithira M & Co Advocates is here to ensure your hard-earned benefits are protected.
