EXPLAINER: How an employer can effect salary cut without breaching law

Salaries can only be reviewed downwards under special circumstances.

In Summary
  • An employee's pay cannot be reduced without consent or discussions between the employee and the employer.
  • Even during tough economic times, employers are still required to adhere to the Kenyan labour laws.
SRC chairperson Lyn Mengich
SRC chairperson Lyn Mengich
Image: FILE

Last week, Senators launched a probe into allegations of unprocedural reduction of salaries of Early Childhood Development Education (ECDE) teachers in Kirinyaga.

The lawmakers will be seeking to establish circumstances that led to the suspension of March and April 2023 salaries and the eventual manual payment of a fraction of the same in May 2023.

According to the Ministry of Labour, salaries can only be reviewed downwards under special circumstances.

Under Kenyan labour laws, even in situations where a company is facing financial problems, an employee's pay cannot be reduced without consent or discussions between the employee and the employer.

“You cannot revise the salaries of workers downwards. International Labour Organisation conventions, which Kenya is a signatory to, protect wages,” Cotu boss Francis Atwoli said in 2017 when debate raged over proposals to reduce the salaries of MPs.

Ruth Tanui Advocates notes that the employment contract cannot be unilaterally varied by one party without the consent of the other.

In the current economic times, employees are likely to agree to a reduction in salary if this is seen as an alternative to being declared redundant.

The law firm said an employer has the option of terminating a contract of employment by giving contractual notice and then offering a new contract on a reduced salary.

Ultimately, if an employee refuses to agree to a reduction in salary, then an employer has the option of terminating the contract of employment by giving them their contractual notice.

Many people had their salaries reduced as a result of the Covid-19 pandemic. Employers were forced to take some measures to remain afloat which included reducing salaries of employees.

However, despite the circumstance, employers are still required to adhere to the Kenyan labour laws

The Employment Act, 2007 says your salary can be reviewed downwards only under certain circumstances.

An employer is required by the law to give an employee a written statement of any statutory deductions that have been made together with a reason why they have made the termination.

But what happens if an employee rejects or resists the salary reduction.

Ruth Tanui Advocates says the employer has the option of ending the contract by giving notice.

The law firm adds that when one is aggrieved by any deductions by the employer, they have a right to take legal action not later than three years after the allegedly unlawful deductions were made.

It says the employee may file a complaint to the Labour office or sue the employer through an advocate of the high court.

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