Last year saw the highest number of staff layoffs possibly due to the effect of the General Election on the economy and strategic decisions. For example, some organisations decided to leave the Kenyan market, while others undertook mergers and acquisitions, which meant that some employees had to be laid off.
In some instances, technological disruptions and changes made some job positions obsolete. For example, the possible use of artificial intelligence may adversely affect the labour market as robots take over some duties.
Some of the businesses that announced staff layoffs include East Africa Breweries Limited #ticker:EABL, East Africa Portland Cement #ticker:PORT, Sanlam #ticker:PAFR, Telkom, SportsPesa and Betin.
Staff lay off is entirely different from a usual termination. A termination happens when either of the parties, the employer or the employee do not wish to continue with the employment relationship. An employment relationship can also be terminated due to summary dismissal where it is due to the fault of the employee, for example, insubordination of an employer, theft and so on. A redundancy happens when out of no fault of the employee, the employer finds it challenging to continue with the employment relationship due to several reasons. This can include poor financial performance, technological disruptions and strategic changes. Redundancy is especially painful to the staff as it means ending a relationship with no-fault being apportioned to the employee.
Redundancy must be done according to the legal provisions under the Employment Act otherwise it can expose the employer to legal risk in the form of lawsuits. An unprocedural redundancy can be stopped in court.
Adequate notices have to be given to the staff and the labour union where one is part of it. The effect of not issuing a notice of the intended redundancy means it will be illegal.
The decision to lay off staff must be made cautiously but caution should be exercised when selecting the staff to lay off and which ones to retain. This is because the employer must take into account an individual’s skill and abilities before sending one packing. Redundancy can be stopped and one can even be awarded damages if one can show that the selection was discriminatory and bias in nature. The employer should be able to answer the question of why person X and not person Y.
An employee is entitled to be paid one month’s salary and a payout equivalent to at least 15 days for each year worked. For those who have been declared redundant, a labour lawyer will be able to verify the process, procedure and the payout. In the event it is unprocedural or the amount paid is not correct, they will assist you to get proper and full dues.
My appeal to employers is to consider alternative ways of laying off employees as this can be quite disruptive to their livelihoods. I have seen a case where an employer helped the laid-off staff form a service company, which was then awarded a contract by the company to perform noncore services. You can opt to retain their services as independent contractors meaning you will get the skills needed but at a lower wage bill.
If you have been declared redundant do not worry. It is not the end of the world. The adage when one door closes another opens applies here. If you look at it positively it is an opportunity for personal growth. You can use the dues to get into self-employment and create jobs for others.