Employers Can't Cut Your Salary Without Negotiation, Kenyan Lawyer Explains

• The Employment Act, 2007 requires that employers have an agreement with employees before they reduce their salaries lest they be sued
• Lawyer Samuel Ochieng said that employees whose salaries are cut without their consent can use the constructive dismissal grounds to prove their employers actions forced them to quit
• This means that they can sue the employers for terminating their contracts because they did not quit voluntarily but the salary cuts made work unbearable
• If one resigns voluntarily they forfeit their rights to sue employer for unfair termination and also employees have right to sue employer while they are still working in their organisations

Salary negotiation is a key part of the employment process and in certain cases determines whether a successful interviewee would take a job or not.

Employees' salaries in Kenya

Employers on the other hand would offer fixed salary offers or would be open to negotiation and this varies on whether the employing party badly needs the interviewee's services or it is the latter who badly needs the job.

This highlights why salaries are a key component of an employment agreement contract or terms and therefore a review, especially a downward one cannot be arbitrarily done by an employer alone.

Labour relations legal expert Samuel Ochieng said that the laws of Kenya give clear directions on the processes that employers need to follow before reducing their employees' salaries.

Salary cut procedures

According to the expert, if these processes are not followed to the letter, a breach on the fundamental terms of a contract that may lead to a claim for constructive dismissal occurs.

"If the employer unilaterally and capriciously varies the salaries and does not bother to negotiate with the employee, then he is in breach of a fundamental term of the contract. This variation might induce an employee to resign and sue the employer for constructive dismissal," explained the lawyer.

According to insights.advocates.ke, constructive dismissal is where an employee resigns because their employers' behaviours are too intolerable for them to work that their only option is to resign.

Employment laws in Kenya

Though constructive dismissal is not explicitly captured in the Employment Act of 2007, Section 45 of the Act provides that an employee may terminate their employment if the employer breaches a fundamental agreement in their contract.

It is an involuntary resignation and thus perceived as a termination which means, unlike in voluntary resignation where an employee forfeits the rights to sue, the employee who embraces constructive dismissal can sue their employer for wrongful termination.

"Fundamental breaches by an employer towards an employee forcing them to resign from work may include non-payment of remuneration, demotion in rank, failure to provide an employee with work, and serious cases of sustained discrimination or mistreatment or if the employer unilaterally varies terms of the contract," Ochieng expounded.

He stated that when an employers choose to reduce the salaries of employees on their own, the latter can go to the foundations of the employment contract and justify that they have been terminated.

"However, the employees must not condone the behaviour of the employer in the reduction of their salary. If the employee takes too much time before resigning in the face of this fundamental breach of the term of the contract of employment then they will forfeit their right to sue their employer for constructive dismissal," the lawyer added.

Employees' rights to sue employers

He argued that, in suing their former employer for the significant reduction of salaries, employees will be required to show how the actions of their employer made it extremely intolerable that they could not continue working.

The resignation under constructive dismissal should be prompt otherwise, an employee may be taken to have consented to the employer’s intolerable conduct.

"Alternatively, the employee can sue his employer for the reduction of his salary while still employed. Section 46 of the Employment Act protects the employee from dismissal from work for taking his employer to court," the legal expert stated.

According to Ochieng, it is important to know that the Employment Act, 2007 protects the salaries of employees religiously with sections 17,18 and 19 prohibiting certain deductions of wages of an employee.

He said that Section 10 (5) specifically states that where any matter stipulated in section 10 (1) changes, the employer shall, in consultation with the employee revise the contract to reflect the change and notify the employee of the change in writing.

Incompetence at workplace

"When increasing the salaries consultations are not a must. Consultations only become mandatory when reducing the salaries of an employee.

"Remuneration is a fundamental term which can only be varied after consultations with the employees affected and the same reduced in writing. Failing to do this, an employee may reign and sue the employer for constructive dismissal," Ochieng reiterated the weight of remuneration in employment terms.

TUKO.co.ke had also highlighted the procedures that employers must follow if they want to terminate the employment terms of an employee deemed to be non-performing.

In the article, the legal expert said that employers could not make a summary dismissal of an employee on grounds of incompetence just like smelling or drinking alcohol do not warrant immediate dismissal of workers.