In Kenya, the Employment Act outlines four main types of employment agreements that can be used between employers and workers. Each type offers varying levels of commitment and benefits.

Contract for an Unspecified Period of Time

This type of contract doesn't specify a fixed duration of employment. It's considered an open-ended agreement, often referred to as a permanent position. Termination of this contract can be initiated by either party by giving written notice as stipulated in the Act or any collective bargaining agreement that applies.

Contract for a Specified Period of Time

A fixed-term contract outlines a definite period of employment. This type of agreement is suitable for temporary positions or projects with a clear end date. The contract may be renewed for up to one additional month if the employee is required to travel for work-related purposes during the initial term.

Contract for a Specific Task (Piecework Employment)

This agreement is ideal for short-term engagements focused on completing a specific task. The employment relationship ends once the task is finished. Employees under this type of contract are typically paid upon completion of the specific task.

Contract for Casual Employment

Casual employees are employed on a daily basis for short durations, not exceeding 24 hours at a time. This type of agreement is suited for one-off needs or covering staff absences. Casual employees generally don't qualify for the same benefits as permanent or temporary employees.

An employment agreement is a crucial document that outlines the terms and conditions of employment, protecting both employers and employees. In Kenya, there are several essential clauses to consider when drafting an employment agreement.

Appointment

This clause specifies the position being offered, the start date, and whether the contract is fixed-term or open-ended.

Job Description and Responsibilities

This clause clearly defines the employee's duties and responsibilities associated with the position.

Compensation and Benefits

This clause specifies the employee's gross salary, pay frequency, and any deductions such as taxes and social security. It also outlines any benefits offered, such as medical insurance, pension contributions, leave allowances, and bonuses.

Working Hours and Overtime

This clause specifies the standard working hours, workweek, and procedures for overtime pay.

Termination

This clause outlines the notice period required for termination by either the employer or employee. It details the grounds for termination with or without notice, including any severance pay provisions. It may also include a clause outlining how references will be provided upon termination.

Intellectual Property

This clause clarifies ownership of any intellectual property created by the employee during their employment.

Confidentiality

This clause outlines the employee's obligation to keep confidential any employer information, trade secrets, or client data.

Dispute Resolution

This clause specifies the process for resolving any disputes arising from the employment agreement.

Probationary periods are a common feature in Kenyan employment contracts. They provide a platform for both employers and employees to assess suitability for the role.

Duration of Probation

According to the Employment Act of Kenya, the initial probationary period cannot exceed six months. However, this period can be extended for a further six months, but only with the employee's consent. Therefore, the total probationary period cannot be longer than one year.

Termination During Probation

During the probationary period, both employers and employees have more flexibility to terminate the employment contract.

Notice Period

As per Section 42(1) of the Employment Act, either party can terminate the contract by providing seven days' written notice or paying the employee seven days' wages in lieu of notice.

Key Points to Remember

• Probationary periods are for assessing an employee's suitability for the role.
• The maximum duration is six months, with a possible six-month extension with employee consent.
• During probation, a shorter notice period of seven days applies for termination from either side.
• Unfair dismissal protections don't apply during probation.

Employment agreements in Kenya often incorporate confidentiality and non-compete clauses to protect an employer's legitimate business interests.

Confidentiality Clauses

Confidentiality clauses aim to safeguard an employer's confidential information, including trade secrets, client lists, and proprietary data. These clauses typically restrict employees from disclosing or using such information without authorization, even after their employment ends. Kenyan law recognizes the validity of confidentiality clauses. However, the Employment Act or any specific legislation doesn't directly address them. Therefore, general contract law principles apply, as outlined in the Contracts Act (Cap 23 of the Laws of Kenya).

Enforceable Confidentiality Clauses

For a confidentiality clause to be enforceable, it should be:

• Clearly defined: The clause should explicitly define what constitutes confidential information.
• Reasonable in scope: The restrictions placed on disclosure should be reasonable and not overly broad, considering the employee's role and the information they access.
• Limited in duration: The period for which confidentiality applies should be reasonable and not extend indefinitely after employment ends.

Non-Compete Clauses

Non-compete clauses restrict an employee's ability to work for a competitor or start a competing business for a certain period after leaving the company. These clauses are governed by the Contracts in Restraint of Trade Act (Cap 24 of the Laws of Kenya). The Act recognizes the validity of non-compete clauses, but only if they are reasonable.

Reasonableness of Non-Compete Clauses

Reasonableness is assessed based on several factors:

• Nature of the employee's role: Non-compete clauses are more likely to be upheld for employees with access to highly sensitive information or client relationships.
• Duration of the restriction: Courts generally view shorter restrictions (a few months) as more reasonable compared to longer ones (years).
• Geographic scope: The restricted geographic area should be proportionate to the employer's legitimate interests.

Enforcing Non-Compete Clauses

Kenyan courts tend to favor an employee's right to earn a living and may declare a non-compete clause unenforceable if it is deemed excessively restrictive. Therefore, employers should carefully craft non-compete clauses to ensure they are reasonable and protect their legitimate interests without unduly hindering the employee's future career prospects.