An employment contract provides a clear record of the relationship between an employer and an employee. It sets out important details about the job, pay, working arrangements, and other conditions of employment. For employers, understanding employment contracts in Kenya can help reduce confusion, support better employee management, and provide a clear reference when workplace questions arise.
Kenya’s Employment Act sets out requirements relating to contracts of service and the employment particulars that should be provided to employees. Businesses should therefore take care when preparing and managing employment contracts.
When Should an Employment Contract Be in Writing?
Under Section 9 of the Employment Act, a contract of service should be in writing where the employment is for three months or longer, or where the specified work cannot reasonably be completed within three months. The Act applies to both oral and written contracts, but certain employment arrangements must be documented in writing.
Employers should therefore assess the nature and expected duration of the employment before bringing someone into the organisation.
A written contract also gives both parties something they can refer to when questions arise about the agreed employment terms.
What Should an Employment Contract Include?
A written employment contract should provide clear information about the employee’s terms of employment. The Employment Act lists several particulars that should be covered. These include:
- Job description: The employee should understand the position and the work they are expected to perform.
- Start date: The contract should state when employment begins.
- Duration and type of contract: The arrangement should make clear whether the employment is for a fixed period or another specified duration.
- Place of work: The employee should know where they are expected to work.
- Working hours: The normal hours of work should be clearly stated.
- Remuneration: The contract should explain the rate or scale of pay, how remuneration is calculated, and applicable benefits.
- Payment intervals: Employees should know how frequently they will be paid.
- Leave and other terms: Relevant provisions relating to annual leave, sickness, pensions, notice, and other applicable conditions should also be addressed.
Clear contracts make it easier for employees and managers to understand what was agreed at the beginning of the employment relationship.
Make the Terms Easy to Understand
An employment contract should not be treated as a document that employees simply sign without understanding. Where an employee cannot understand the language or provisions of the contract, the Employment Act requires the employer to have the contract explained in a language the employee understands.
Employers should therefore avoid unnecessary complexity when preparing contracts. The wording should clearly communicate the actual employment arrangements.
Employees should also have an opportunity to raise questions about terms they do not understand before agreeing to the contract.
Keep Contracts Consistent With Actual Working Arrangements
A contract should reflect the way the employment relationship actually works. If an employee’s responsibilities, working arrangements, remuneration, or other important terms change, the business should review the relevant documentation.
For example, an employee may start in one role and later take on substantially different responsibilities. If the employment arrangements have changed, the employer should consider whether the contract or related documentation needs to be updated.
Keeping records current can help prevent disagreements later.
Be Clear About Pay and Benefits
Pay is one of the most important parts of an employment contract. Employers should clearly state the remuneration arrangements rather than leaving employees to make assumptions about their earnings.
Where applicable, the contract should also explain benefits and other payment arrangements. This can include information relevant to allowances, bonuses, or other agreed benefits.
Clear documentation can help reduce disputes when employees have questions about their pay.
Explain Notice Requirements
Employment contracts should address the notice period applicable to termination of employment, subject to the requirements of Kenyan employment law and the terms of the employment relationship.
Employees should know how much notice they are required to give and what notice they are entitled to receive where applicable. Clear notice provisions can help both parties understand what is expected when employment comes to an end.
Employment Contracts Are Only One Part of HR Management
Having a written contract does not remove the need for proper HR processes. Businesses still need appropriate procedures for managing leave, employee performance, workplace conduct, disciplinary matters, grievances, payroll, and other employment issues.
A contract provides the foundation for the employment relationship, while effective HR processes help the business manage that relationship in practice.
Employers should also review their HR practices periodically rather than assuming that a contract prepared several years ago will continue to meet every current business need.
Common Employment Contract Mistakes to Avoid
Some problems can be reduced by taking a careful approach when preparing employment contracts. Businesses should avoid:
- Using vague job descriptions: Employees should have a reasonable understanding of their responsibilities.
- Leaving important terms unclear: Pay, working hours, leave, notice, and other key conditions should be properly addressed.
- Failing to update documentation: Significant changes to employment arrangements should be properly recorded.
- Using the same contract without review: Different roles may require different terms and conditions.
- Ignoring applicable employment requirements: Contracts and HR practices should be reviewed against relevant Kenyan employment laws.
Professional HR guidance can be useful when a business is unsure about its existing contracts or needs to develop appropriate employment documentation.
Get Professional HR Consultancy Support
At Coveted HR Services Ltd, we provide HR consultancy services to businesses that need support with employee management and workplace processes. We help businesses review their HR practices, address employee related challenges, and develop clearer approaches to managing their teams.
Our HR support can assist businesses with employment contracts, employee management, performance matters, workplace policies, recruitment, and other HR needs.
If you are unsure whether your employment contracts properly reflect your business arrangements, contact Coveted HR Services Ltd today for professional HR support.
📞 Call/WhatsApp: 0798 330026
📧 Email: info@covetedhrservices.co.ke