Has Your Salary been Reduced? The Position of Kenyan Labour Laws on Salary Reduction

Many people  have had their salary reduced as a result of the pandemic  which has affected the economy globally hence employers have been forced to take some measures in an effort to remain afloat which includes reducing their employees salary.However, despite the circumstance it does not mean that the employers should go against the Kenyan Labour Laws .In this article I will share simplified Kenyan Labour laws on salary reduction to help anyone who is in this position to know their rights under the Law.

  1. What is Salary Reduction

This is self explanatory, it is where an employee’s salary has been reviewed downwards or where a certain amount has been deducted from the employees salary.

  1. Kenyan Labour Laws on Salary Reduction

The Kenyan Labour Laws that deal with Salary Reduction in Kenya include;

1. The Constitution of Kenya, 2010

2. The Employment of Kenya, 2007

  1. Circumstances Salary Reduction May Occur

Subject to the Kenyan Labour Laws, specifically the Employment Act, 2007 your salary can be reviewed downwards only under certain circumstances  that may  include but cannot be limited to the following;

  1. Tough financial times like the Covid-19 pandemic.
  2. In circumstances where you have been  legally demoted from one position to another.

 4. Is Salary Reduction Legal in Kenya?

Yes. Under the 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.  Both the Employer and the employee must still discuss and agree.

  1. What can you do when an Employer attempts to impose a reduction in an employee’s salary without consent?

In such a situation as an employee you have two options;

1. The employee can continue to work “under protest” but sue for compensation for the losses suffered as a result of the reduction in salary.

2. The employee can  resign and  he or she can claim constructive unfair dismissal .

6. What are some of the Permitted Deduction

There are permitted deductions from an employees salary that are stated by the Kenyan Labour laws particularly  the Employment Act, 2007 and they include the following;

  1. Any contributions to any provident or scheme that has been approved by the commissioner for labour that an employee has agreed to contribute.
  2. Reasonable amount for any damage or loss of any property belonging to the employer caused by wilful default of the employee.
  3. Any amount paid to the employee in error or in excess of his or  her salary.                                                                   Remember all this must be done with the knowledge of the employee.
  4. 8. Can you make a Complaint when there are unlawful deductions?

Yes. As an employee where you are aggrieved by any deductions by the employer in not later than 3 years after the allegedly unlawful deductions has been made, you have the following options;

1. An employee may file a complaint to the Labour office.

2. Sue your employer through an advocate of the high court of Kenya.

8. Legal Process of Salary Reduction

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

9. What Happens if you Oppose or resist the Salary Reduction

Where an employer is within the confines of the Law, the employer has the option of ending your contract by giving you a notice and then offering a new contract to another person on a reduced salary.

I hope this information has been has been helpful, if you have any further questions just send us an email on info@ruthtanuiadvocates.co.ke or contact us on 0738372354.I also have a youtube video of the same here https://youtu.be/GAh_yz1saIQ 

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