Terminated Today. Paid Two Months Later. Seriously… Is That Legal?”
You terminate an employee today.
You ask them to clear with all the relevant departments, issue them with a discharge voucher, and then tell them:
“Come back for your final paycheck in two months.”
Seriously?
The employee has already lost their job. Why should they also have to wait unnecessarily for what is rightfully theirs?
Now, here’s the real issue…
When an employment relationship ends in Kenya, the paperwork doesn’t end with the termination letter. What an employee is owed, and how fast it should be paid, is one of the most disputed — and most misunderstood — parts of the process. StratWise Africa has decided to break it down clearly.
Notice: what’s owed before termination even takes effect
Under the Employment Act, the required notice period depends on how the employee is paid:
- Daily-paid employees — no notice required; the contract can end at the close of any working day.
- Weekly-paid employees — at least one week’s notice.
- Employees paid every two weeks — at least two weeks’ notice.
- Monthly-paid employees — at least 28 days’ written notice.
An employer doesn’t have to wait out this period. Under Section 36, either party can end the contract immediately by paying the equivalent salary instead of notice. The law doesn’t allow skipping both the notice and the payment.
What must be paid out on exit?
Regardless of how the contract ends, a departing employee is generally entitled to:
- Outstanding salary for all days actually worked, up to the last working day
- Payment instead of notice, if notice wasn’t served
- Accrued but unused leave days, paid out at the current salary rate.
- Any earned but unpaid benefits or commissions
- Severance pay — but only in cases of redundancy, calculated at not less than 15 days’ pay for each completed year of service. Severance is not payable for misconduct-related dismissals or resignation.
- A Certificate of Service, which is a legal right for anyone who has worked at least four consecutive weeks — this must be issued regardless of the reason for leaving.
Even in a summary dismissal for gross misconduct — where notice pay and severance don’t apply — the employee still keeps the right to be paid for days worked, unused leave, and any other earned benefits.
So, what’s the actual timeline?
This is where employers most often get it wrong. There’s a widespread assumption that final dues can be settled “at the next payroll run” or whenever convenient. That’s not correct. Kenyan labour practice treats final dues as payable promptly — commonly applied and enforced as within seven days of the employee’s last working day. Delaying beyond this window is one of the fastest ways to turn a routine exit into a labour dispute.
A few notes to take home:
- The payment timeline applies whether the employee resigned, was made redundant, or was dismissed.
- Delayed final dues are treated seriously by labour officers and the Employment and Labour Relations Court, and can attract claims on top of the amount actually owed.
- The Certificate of Service should be issued alongside final payment, not weeks later.
What happens if an employer delays or underpays
An employee who isn’t paid correctly, or on time, can raise a complaint with the Ministry of Labour and Social Protection or file a claim at the Employment and Labour Relations Court. Courts have shown little patience for employers who treat final dues as negotiable or “pay when we can” — outstanding amounts are typically awarded in full, sometimes with additional compensation where the delay forms part of a broader unfair termination finding.
The bottom line for employers
Getting the reason for termination right is only half the job. Getting the final payment right — and on time — is what actually protects your business from a claim. Build a standard exit checklist: calculate all dues before the last working day, prepare the Certificate of Service in advance, and release payment within the week. It’s a small operational habit that closes off your biggest source of post-termination risk.
Not sure your exit process is compliant? Stratwise Africa reviews termination and final-dues processes for SMEs in Mombasa and across Kenya for free — [book a consultation][+254789888360].
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