The underlying understanding between the parties of fixed-term employment contracts is that once the fixed period has ended, the contract is automatically terminated without any further liability on the employer's part on account of unfair termination or redundancy. However, despite this apparently clear intention, Kenyan jurisprudence is awash with claims lodged by employees on the grounds that the non-renewal of such contracts amounted to unfair termination.
Normally, when an employee resigns, he or she is not entitled to claim damages against the employer. Indeed, if the employee resigns without giving the requisite contractual notice, the employer is entitled to recover the pay in lieu of notice through legal proceedings and there is usually no valid defence to such a claim. However, constructive dismissal is treated as a dismissal by the employer and the employee is entitled to damages for unfair termination.
Since 2007 Kenya has had one of the most robust labour law regimes in the world. The Employment and Labour Relations Court is famed worldwide for its pro-employee ideology and is known to bend over backwards to ensure that employees who call on it do not go home empty handed. It is therefore surprising that Kenya has not enacted legislation to regulate the seamless transfer of employees from one company to another following a merger or acquisition.
For a termination to be lawful, the employer must have a valid reason and adopt a fair termination process. Further, the reasons must be given before the termination takes place. The law does not require that the employee accept the reasons given, but if the employee disputes their validity, he or she could challenge the termination on grounds of unfairness. As it is unrealistic to expect an employee facing dismissal to accept the reasons given, Parliament should reconsider this requirement.
The validity and enforceability of restrictive covenants during the employment period is usually not debatable. However, what frequently results in litigation is whether and to what extent these restrictive covenants are enforceable after the termination of employment. For a restrictive covenant to stand, the employer must demonstrate that it has a legitimate proprietary interest and that the intention is not merely to punish the employee.