Employment Contracts in Kenya

Employment Contracts in Kenya

Drafting a comprehensive employment contract in Kenya

An employment contract in Kenya is a legally binding agreement that governs the relationship between an employer and an employee. The Employment Act (No. 11 of 2007) defines an employment contract as “an agreement, whether oral or written, and whether expressed or implied, to employ or to serve as a worker for a certain period.” This contract is essential for outlining the terms and conditions of employment, ensuring both parties understand their rights and responsibilities.

While drafting employment contracts in Kenya, ensure compliance with the Employment Act, of 2007, to minimize labor disputes.

Key Components of Employment Contracts in Kenya

When drafting an employment contract in Kenya, several key details must be included to avoid legal disputes and ensure transparency between employers and employees.

1. Details of the Parties in an Employment Contract

The first element in any employment contract in Kenya is the identification of the parties involved: the employer and the employee. The contract should provide clear names, addresses, and contact details. Proper identification helps avoid misunderstandings and legal complications.

2. Type of Employment in Kenya

The contract must specify the type of employment, including:

• Permanent Employment Contracts: Long-term positions with no predefined end date.
• Fixed-Term Contracts: Employment for a specific period.
• Casual Employment Contracts: Short-term employment with variable hours.

Understanding the nature of employment is crucial to complying with Kenyan labor laws.

3. Commencement Date and Duration

For fixed-term or casual contracts, it’s essential to specify the start date and duration of the contract. Permanent contracts should indicate that the employment is permanent (and mostly pensionable), while short-term contracts must outline clear beginning and end dates.

4. Employee Duties and Responsibilities

The contract must clearly define the duties and responsibilities of the employee. This ensures that both parties are aligned on the expected roles and responsibilities, helping to avoid any future conflicts.

5. Compensation and Benefits

Compensation is a key part of any employment contract in Kenya. Employers must specify:

• Basic salary or wage
• Payment intervals (weekly for shortterm contracts, monthly in arrears for permanent contracts)
• Bonuses or allowances
• Overtime compensation Additionally, the benefits offered—such as health insurance or pension plans—should be included in the contract to enhance employee welfare.

6. Working Hours in Employment Contracts

The working hours must be clearly stated, and in alignment with Kenyan Employment Act. The Employment Act, 2007 states that employees should work a maximum of 8 hours per day with a 1 hour lunch break unless otherwise agreed upon. Overtime must be compensated according to the law.

7. Internal Policies and Rules

Contracts should reference the employer’s internal policies, such as:

• Disciplinary actions (We can help you draft a disciplinary policy)
• Health and safety policies (We can help you draft a Health & Safety Policy)
• Code of conduct for employees.  These policies should align with Kenyan law, particularly the Employment Act, 2007, to avoid conflicts.
• Gift policy determines how much gifts an employee can accept from third parties.
• Sexual Harassment Policy sets out what is considered sexual harassment and acceptable behaviour.

8. Leave Entitlements in Employment Contracts in Kenya

Leave entitlements must comply with the provisions of the Employment Act. Employers must outline:

• Annual leave (minimum 21 working days after 12 months of continuous service)
• Sick leave
• Maternity and paternity leave. Maternity leave must be Ninety (90) days and Paternity Leave (14 days).  The Kenyan Employment Law has since added adoption leave for adoptive parents.
• Public holidays as declared by the Kenyan Government and gazetted according to the Law.
• The employer can also provide for compassionate leave on death of a love one, study leave for taking exams.

9. Termination of Employment Contracts in Kenya

Every employment contract in Kenya must specify the conditions under which the contract can be terminated. Reasons for termination can include:

• Resignation by the employee
• Dismissal by the employer, whether for cause (e.g. gross misconduct) or without cause (e.g., redundancy).

Termination clauses must also specify the notice period required under Kenyan law, which ranges from 7 to 30 days depending on the terms and length of employment.

10. Suspension Clauses

In the event of misconduct, an employer may choose to suspend an employee. The terms of suspension, including whether it is with or without pay, must be clearly outlined in the employment contract.

Legal Compliance with the Employment Act, 2007

Ensuring that employment contracts in Kenya comply with the Employment Act, 2007, is critical. Any contract with terms that violate the Act is considered unenforceable. Employers must pay attention to minimum wage laws, working hours, leave entitlements, and termination rules to avoid legal issues.

External Resources for Employers in Kenya

For more detailed guidelines on drafting compliant employment contracts, you can refer to:

• Employment Act, 2007 – Kenya Law
• International Labour Organization (ILO) – Employment Standards

These resources offer additional insights into Kenyan employment laws and international employment standards.

Drafting Employment Contracts in Kenya

An employment contract in Kenya is a critical document that safeguards both the employer and the employee. By including essential details such as the duties, compensation, leave entitlements, and termination procedures, employers can ensure legal compliance and a smooth employment relationship.

For employers in Kenya, it is highly advisable to consult legal professionals or HR experts to create contracts that comply with the Employment Act, of 2007.

Silvana & Associates Advocates can assist you draft comprehensive employment contracts in Kenya. Please contact us at info@swkadvocates.com