Eligibility Criteria for Severance Pay in Kenya- Who Qualifies and How-

Who qualifies for severance pay in Kenya?

In Kenya, severance pay is a form of compensation provided to employees who are terminated from their employment. It is designed to offer financial support to workers who have lost their jobs due to various reasons, such as retrenchment, redundancy, or retirement. However, not all employees are eligible for severance pay, and understanding the criteria for qualification is crucial for both employers and employees. This article delves into the details of who qualifies for severance pay in Kenya, highlighting the key factors that determine eligibility.

Eligibility Criteria for Severance Pay in Kenya

1. Length of Service:

One of the primary factors that determine eligibility for severance pay in Kenya is the length of service. According to the Employment Act, 2007, an employee must have completed at least one year of continuous employment with the same employer to be eligible for severance pay. The pay is calculated based on the number of years the employee has worked for the employer, with a minimum of one month’s salary for each year of service.

2. Termination of Employment:

Severance pay is only applicable in cases where an employee’s employment is terminated by the employer. This includes situations such as retrenchment, redundancy, or retirement. If an employee resigns, they may still be eligible for severance pay, but it depends on the terms of their employment contract and the company’s policy.

3. Employee Status:

Only permanent employees are eligible for severance pay in Kenya. Temporary, casual, or part-time employees may not be entitled to severance benefits, as their employment is typically of a shorter duration and may not meet the one-year service requirement.

4. Company Policy:

While the Employment Act, 2007 provides the basic framework for severance pay, the actual amount and conditions may vary depending on the company’s policy. Some employers may offer more generous severance packages than what is stipulated by law, while others may have stricter criteria for eligibility.

5. Notice of Termination:

The employer must provide the employee with a written notice of termination, detailing the reasons for the termination and the severance pay entitlement. This notice should be issued in accordance with the provisions of the Employment Act, 2007.

Conclusion:

Understanding who qualifies for severance pay in Kenya is essential for both employers and employees. By adhering to the eligibility criteria outlined in the Employment Act, 2007, employers can ensure they are compliant with the law while providing fair compensation to their employees. Similarly, employees should be aware of their rights and eligibility for severance pay to seek appropriate compensation when their employment is terminated.