An employee resigns his job after giving and serving the required notice. Employer acknowledges in writting, thanks the employee for his service and regrets his leaving.

Fast forward three months. The employer is refusing to pay for service on the basis that according to the "new" labour laws an employee is not entitled to service pay if his employer has been paying for his NSSF!

This makes absolutely no sense. Service pay and NSSF are totally different things! Furthermore, service pay is half a salary for every year worked which translates to tens or hundreds of thousands for every year served depending on one's salary. NSSF on the other hand is a mere 200/= per month which translates to 2,400/= per year served. Who would craft such a law? And where would Atwoli be at that time? Further more, NSSF is a statutory deduction covering every employee which means such a law would virtually lock out every employee!

Anyone with information on this, kindly share.

I have read section 35 of the 2007 Employment Act and I need an accountant/lawyer/anyone in the the know to provide more light.

The employer is right. There are now about four decisions of the Industrial Court that confirm if the employer is deducting and remitting NSSF then service pay is not payable. Unless the Court of Appeal reverses this decisions they stand

Anyone else with something to add? Replacing service with NSSF [Which is a statutory deduction in the first place] doesn't make much sense to me! Was this law drafted by the employers while worker's organizations [starting with Atwoli] were asleep. We should even have heard some noise!

@ MaichBlack @ maka is right.

You are confusing service pay section 35 (5) and severance pay section 40 (1) (f) both in the employment act no. 11 of 2007 which are two totally different things. You resigned out of your on will, you go away with nothing.

But section 18(4) of the same act requires that you are paid all your benefits/dues outstanding including accrued leave at the point of resignation.

I wonder why this thread hasn't gained currency yet 91.999% of wazuans are employees.ama ni vile hii employment act haikupishwa na Raila .
anyway let me assume you are all in a comfort zone.


below are some provisions in the employment act that are very unfavorable to employees namely :

1.gratuity or service. if you a member of nssf and your employer pays your 400/- contribution to nssf you can't claim for service / gratuity for years worked unless your contract provides for this.

2.hours of work
there is no provision in the employment act 2007 on the standard no of hours required from an employee per day or week.this was expressly provided for in cap 229 which was repealed in 2007.
3.sick leave
employment act provides for only 7 days with full pay and a further 7 days with half pay then no pay thereafter.cap 229 provided for 30 days with full pay.if you have a heartless employer you are legitimately Kethied

these are some of the things as an employee you should be aware of

employees in wazua go to your mp pass this and any other section of the employment act you find unfavorable .find your MP From Facebook linked Google and pass the message.
tusikuwe makethis panganga no action. whiners

you might need this in future. life is full of suprises

How do we pass this message to all employees so that they lobby their MPs? It makes one very scared of leaving employment, you wait to be kicked out!!! Its very sad. However i am told that it was supposed to be done concurrently with the conversion of NSSF into a "provident fund" (i am not sure what this means)where the NSSF conributions were to go up to 7% of gross pay from both employee and the employer. However along the line, the law was changed but the NSSF conversion was shelved. Guess where this leaves the employees... without a parachute or even a simple umbrella.

As a starting point it is important to remember that the Industrial Courts derive their jurisdiction from the Labor Institutions Act (enacted along with the Employment Act) and the Industrial Court Act.

These Acts read together, grant the Industrial Courts exclusive jurisdiction to hear labor/employment disputes.

It is now settled law that no employee can be unfairly terminated.

The Employment Act recites what would be considered unfair termination unless the employer fails to prove otherwise.

Importantly the Act takes a different application of the evidentiary burden of proof. The burden of proof here is on the employer AND NOT the employee.

Therefore, the employer not only must prove fair reasons for termination, but also that it followed all the principles of Natural Justice including procedures to investigate the matter, conducted a hearing, and properly handled any appeals before resorting to termination.

If the employer is unable to prove this then the termination will be deemed to have been unfair.

Now what remedy is there for unfair termination? Read the Employment Act carefully and in particular Section 45: If a termination is deemed unfair, the Industrial Court not only has the power to award damages up to the equivalent of TWELVE MONTHS of gross salary, but can also order REINSTATEMENT to the same job position, or re-engagement under a similar position.

Is that an Act that is a worthless piece of paper? NO.

Ask yourself why the Board's members were keen on arguing that the relationship between Odongo and the Board has irretrievably broken down. They know that if the Court is so inclined It may order that Odongo gets a handsome one year bonus and still retains his job for the duration of the contract.

NSSF has this habit of treating its Managing Trustees like riffraff. One remembers how Alex Kazongo and Naftali Mogere were un ceremoniously bundled out of office. It is about time that they were hit with a big judgment so that they know that people do have rights.

And to make matters even better in a recent decision in Petition No. 341 of 2011 Justice Lenaola decreed that Section 45(3) of the Employment Act (the one stating that one must have worked for 12 months before getting this compensation) is unconstitutional.


The litigant had worked for 11 months and his case was dismissed. He therefore appealed to the High Court and prayed for a declaration that his right to fair labour practices under Article 41(1) of the Constitution had been violated by his employer.

Justice Lenaola in agreeing observed that the Employment Act was enacted in 2007 before the enactment of the 2010 Constitution of Kenya and therefore there was need to align the provisions of all statutes enacted prior to it with the said Constitution.

Judge Lenaola therefore declared and issued an order stating that section 45(3) of the Employment Act 2007 was inconsistent with the provisions of the Constitution of Kenya particularly Articles 28,41 (1), 47, 48 and 50(1) as the said section purported to deny the petitioner the rights and freedoms enshrined in the said Articles of the Constitution.

That makes the situation even better and despite the fact that so far none of the matters before Court has reached a full judgment based on that decision it follows that one can get 12 months Compensation even if you have worked for a day.
 
The Industrial Court has done this day after day and passed several judgments fortifying the position that compensation and reinstatement is a recognizable statutory award. I hope they do it in this case as well..

Are we talking about severance pay here?

Your need to consider the following;

1. The employment contract - did it provide for a pension on top of NSSF?

2. The employee resigned --- and therefore severance pay would not apply.

Yeah, we need to