Test for Employment Termination in Kenya
In Kenya, the Employment Act, 2007, hereinafter ‘the Act’ provides the legal framework for determining whether a termination is fair or unfair. Under the Act, a termination is considered unjust if Substantive Justification is lacking and Procedural Fairness is not followed.
Substantive Justification
Substantive justification refers to whether the employer had a valid and fair reason for terminating an employee’s contract, as opposed to merely following the correct procedure (procedural fairness). Substantive justification requires the Employer to show the correctness, validity, or existence of the reason for termination, the same is provided under Sections 43 and 45 of the Act. The burden of proof of the validity of the reasons for termination is on the employer under Section 43 of the Act, which reads as follows;
43. Proof of reason for termination
(1) In any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45.

It is key to also note that Substantive justification requires factual proof, not just suspicion or hearsay, as mere allegations without evidence may render termination unfair. In Nicholas Muasya Kyula v Farmchem limited industrial cause no. 1992 of 2011 the court held that in allegations of misconduct the employer is required to have internal systems and process of undertaking administrative investigations and verifying the occurrence of the misconduct before a decision to terminate is arrived at.
Substantive justification in employment law, therefore, requires the employer to demonstrate that there was a legitimate and sufficient reason for the dismissal, supported by evidence. Even if the employer follows the correct procedure (procedural fairness), without a valid and justifiable reason for the dismissal, the termination can be found to be unfair.

What is then Procedural Fairness?
Section 41 of the Act describes the procedural fairness to be met by an employer contemplating termination of employment on grounds of misconduct, poor performance, or physical incapacity of an employee. The act provides that the employer must explain to the employee in a language that the employee understands the reasons for which the employer is considering to terminate the employee’s employment with them. The employer must also ensure that the employee receives the said reasons in the presence of a fellow employee or a shop floor union representative of own choice and to hear and consider any representations which the employee may advance in response to allegations leveled against them by the employer.
In explaining the ingredients of procedural fairness, In Otieno v Penda Health Limited (Cause E424 of 2024) [2024] Her Ladyship Justice Nzoki wa Makau cited the case of Anthony Mkala Chitavi v Malindi Water & Sewerage Co. Limited [2013] eKLR which made the following observations;
1. With regards to Section 41 of the Act as explained above, in a claim for unfair termination or wrongful dismissal on the grounds of misconduct, poor performance or physical incapacity, it is the employer to demonstrate to the Court that it has observed the dictates of procedural fairness. Differently put, the employer should inform the employee as to what charges the employer is contemplating using to dismiss the employee

2. Secondly, it would follow naturally that if an employee has a right to be informed of the charges he has a right to a proper opportunity to prepare and to be heard and to present a defence/state his case in person, writing or through a representative or shop floor union representative if possible.

3. Thirdly, if it is a case of summary dismissal, there is an obligation on the employer to hear and consider any representations by the employee before making the decision to dismiss or give other sanction
From the provisions of the act and the decision above, it is evident that procedural fairness is designed to protect the rights of employees by ensuring that they are treated with fairness and dignity when facing termination. Employers must follow due process and give the employee an opportunity to respond to any allegations before making a dismissal decision. If procedural fairness is not followed, the termination may be deemed unfair, even if the reason for dismissal is substantiated.
In Conclusion, as held by numerous courts, Substantive justification refers to the reason for the termination while procedural fairness requires that the employee be accorded a fair process and an opportunity to be heard before termination. The Kenyan judiciary has consistently upheld a dual test for assessing the validity of employment termination, requiring both substantive justification and procedural fairness. This principle was firmly articulated in Walter Ogal Anuro v Teachers Service Commission [2013] eKLR, where the court held, “for a termination to pass the fairness test, it must be shown that there was not only substantive justification for the termination but also procedural fairness.”