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What are the recommended provisions for an Employment Contract?

Recommended Provisions for an Employment Contract in Kenya

An employment contract is a legally binding agreement between an employer and an employee that outlines the terms and conditions of their employment relationship. It is crucial to have a comprehensive and well-drafted employment contract to protect the interests of both parties and prevent future disputes.

Table of Contents

  1. Introduction

  2. Essential Provisions 2.1. Parties 2.2. Job Title and Description 2.3. Commencement Date 2.4. Remuneration 2.5. Working Hours 2.6. Leave Entitlements 2.7. Probationary Period 2.8. Termination 2.9. Confidentiality 2.10. Restrictive Covenants 2.11. Dispute Resolution

  3. Case Laws

  4. Conclusion

  5. TLDR

  6. Sample Employment Contract

Introduction

In Kenya, employment contracts are governed by the Employment Act, 2007 (the Act). The Act provides a framework for the regulation of employment relationships, including the minimum terms and conditions of employment. While the Act sets out certain mandatory provisions, it is advisable to include additional provisions in an employment contract to address specific circumstances and protect the interests of both the employer and the employee.

Essential Provisions

Here are some recommended provisions for an employment contract in Kenya:

2.1. Parties

  • Full Names and Addresses: The contract should clearly identify the parties involved, including the full names and addresses of both the employer and the employee.

  • Legal Status: The legal status of the employer should be stated, whether it is a company, partnership, or sole proprietorship.

2.2. Job Title and Description

  • Job Title: The specific job title of the employee should be clearly stated.

  • Job Description: A detailed job description should be included, outlining the employee's responsibilities, duties, and reporting lines. This helps to define the scope of the employee's work and avoid any misunderstandings.

2.3. Commencement Date

  • Start Date: The contract should specify the date on which the employee's employment commences.

2.4. Remuneration

  • Salary or Wages: The contract should clearly state the employee's salary or wages, including any allowances or benefits.

  • Payment Frequency: The frequency of salary payments should be specified, such as monthly, weekly, or bi-weekly.

  • Method of Payment: The method of payment should be stated, such as bank transfer or cash.

2.5. Working Hours

  • Standard Working Hours: The contract should specify the employee's standard working hours, including the daily or weekly hours of work.

  • Overtime: The contract should address overtime work, including the rate of pay for overtime hours.

  • Rest Periods: The contract should specify the employee's entitlement to rest periods, such as lunch breaks and tea breaks.

2.6. Leave Entitlements

  • Annual Leave: The contract should specify the employee's entitlement to annual leave, including the number of days of leave per year and the conditions for taking leave.

  • Sick Leave: The contract should specify the employee's entitlement to sick leave, including the number of days of leave per year and the conditions for taking leave.

  • Maternity Leave: The contract should specify the employee's entitlement to maternity leave, including the duration of leave and the conditions for taking leave.

  • Paternity Leave: The contract should specify the employee's entitlement to paternity leave, including the duration of leave and the conditions for taking leave.

2.7. Probationary Period

  • Duration: The contract should specify the duration of the probationary period, which is typically three months.

  • Performance Evaluation: The contract should outline the process for evaluating the employee's performance during the probationary period.

  • Termination: The contract should specify the conditions under which the employment can be terminated during the probationary period.

2.8. Termination

  • Notice Period: The contract should specify the notice period required for termination of employment by either party. The notice period is typically one month for employees who have been employed for less than five years and three months for employees who have been employed for five years or more.

  • Grounds for Termination: The contract should specify the grounds for termination of employment, such as misconduct, redundancy, or poor performance.

  • Severance Pay: The contract should address severance pay, which is payable to employees who are terminated due to redundancy or other circumstances.

2.9. Confidentiality

  • Confidentiality Clause: The contract should include a confidentiality clause that prohibits the employee from disclosing confidential information of the employer.

  • Definition of Confidential Information: The contract should define what constitutes confidential information, such as trade secrets, customer lists, and financial data.

2.10. Restrictive Covenants

  • Non-Compete Clause: The contract may include a non-compete clause that restricts the employee from working for a competitor for a certain period of time after leaving the employer.

  • Non-Solicitation Clause: The contract may include a non-solicitation clause that restricts the employee from soliciting the employer's customers or employees for a certain period of time after leaving the employer.

2.11. Dispute Resolution

  • Dispute Resolution Mechanism: The contract should specify a mechanism for resolving any disputes that may arise between the employer and the employee. This could include mediation, arbitration, or litigation.

  • Governing Law: The contract should specify the law that will govern the contract, which is typically Kenyan law.

Case Laws

  • **Case: ** Muthoka v. Kenya Airways Ltd (2013) eKLR

    • Facts: The employee was dismissed for misconduct. The employer argued that the employee had been given a fair hearing before dismissal. The employee argued that the hearing was not fair.

    • Outcome: The court held that the employer had not given the employee a fair hearing before dismissal. The court ordered the employer to reinstate the employee.

    • Relevance: This case highlights the importance of ensuring that employees are given a fair hearing before dismissal.

  • Case: Kenya Commercial Bank Ltd v. The Industrial Court (2015) eKLR

    • Facts: The employee was dismissed for redundancy. The employer argued that the dismissal was justified. The employee argued that the dismissal was unfair.

    • Outcome: The court held that the employer had not followed the proper procedures for dismissing an employee for redundancy. The court ordered the employer to reinstate the employee.

    • Relevance: This case highlights the importance of following the proper procedures for dismissing an employee for redundancy.

  • Case: Kenya Power & Lighting Co. Ltd v. The Industrial Court (2017) eKLR

    • Facts: The employee was dismissed for poor performance. The employer argued that the dismissal was justified. The employee argued that the dismissal was unfair.

    • Outcome: The court held that the employer had not given the employee adequate warnings about their performance before dismissal. The court ordered the employer to reinstate the employee.

    • Relevance: This case highlights the importance of giving employees adequate warnings about their performance before dismissal.

Conclusion

A well-drafted employment contract is essential for protecting the interests of both the employer and the employee. It should include all the essential provisions outlined above, as well as any other provisions that are relevant to the specific circumstances of the employment relationship. It is advisable to seek legal advice from a qualified employment lawyer to ensure that the contract is compliant with Kenyan law and protects the interests of both parties.

TLDR

An employment contract in Kenya should include provisions on the parties, job description, commencement date, remuneration, working hours, leave entitlements, probationary period, termination, confidentiality, restrictive covenants, and dispute resolution. It is important to ensure that the contract is compliant with Kenyan law and protects the interests of both the employer and the employee.

Sample Employment Contract

EMPLOYMENT CONTRACT

This Employment Contract (the "Contract") is made and entered into on this [Date] day of [Month], [Year], by and between [Employer Name], a [Legal Status] incorporated under the laws of [Country] with its registered office at [Employer Address] (the "Employer"), and [Employee Full Name], residing at [Employee Address] (the "Employee").

1. Engagement

The Employer hereby agrees to engage the Employee and the Employee hereby agrees to be engaged by the Employer as a [Job Title] (the "Position").

2. Commencement Date

The Employee's employment shall commence on [Commencement Date] (the "Commencement Date").

3. Job Description

The Employee shall perform the duties and responsibilities as set out in the Job Description attached hereto as Annexure A.

4. Remuneration

The Employer shall pay the Employee a monthly salary of [Salary Amount] (the "Salary"). The Salary shall be paid on the [Payment Frequency] day of each month.

5. Working Hours

The Employee shall work a standard [Working Hours] hour week, from [Start Time] to [End Time] on [Days of the Week].

6. Leave Entitlements

The Employee shall be entitled to the following leave entitlements:

  • Annual Leave: [Number] days of annual leave per year.

  • Sick Leave: [Number] days of sick leave per year.

  • Maternity Leave: [Number] weeks of maternity leave.

  • Paternity Leave: [Number] days of paternity leave.

7. Probationary Period

The Employee's employment shall be subject to a probationary period of [Number] months. During the probationary period, the Employer may terminate the Employee's employment without notice.

8. Termination

This Contract may be terminated by either party upon giving the other party [Notice Period] months' written notice.

9. Confidentiality

The Employee agrees to hold in confidence all confidential information of the Employer, including but not limited to trade secrets, customer lists, and financial data.

10. Restrictive Covenants

The Employee agrees not to:

  • Non-Compete: Engage in any business that is competitive with the Employer's business for a period of [Number] years after the termination of this Contract.

  • Non-Solicitation: Solicit the Employer's customers or employees for a period of [Number] years after the termination of this Contract.

11. Dispute Resolution

Any dispute arising out of or in connection with this Contract shall be settled by [Dispute Resolution Mechanism].

12. Governing Law

This Contract shall be governed by and construed in accordance with the laws of Kenya.

13. Entire Agreement

This Contract constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.

14. Severability

If any provision of this Contract is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.

15. Waiver

No waiver of any provision of this Contract shall be effective unless in writing and signed by the party against whom the waiver is sought to be enforced.

IN WITNESS WHEREOF, the parties have executed this Contract as of the date first written above.

[Employer Signature]

[Employer Name]

[Employee Signature]

[Employee Name]

Annexure A: Job Description

This is a sample employment contract and should be reviewed by a qualified employment lawyer before use. The specific provisions of the contract should be tailored to the specific circumstances of the employment relationship.

Answered by mwakili.com