In Tanzania, the Employment and Labour Relations Act, 2004 (ELRA) defines three main types of employment agreements.

Contract for an Unspecified Period of Time

Also known as an indefinite-term contract, this type of agreement does not specify a predetermined end date for employment. It establishes an ongoing employment relationship between the employer and the employee. Termination of this contract can only be done by following the legal termination procedures as outlined in the ELRA.

Contract for a Specified Period of Time

Fixed-term contracts are designed for a specific duration, which must be clearly defined in the agreement. These contracts are typically used for project-based work or temporary positions. However, the ELRA imposes limitations on fixed-term contracts. They are only permissible for professional and managerial positions and the minimum duration for a fixed-term contract is twelve months.

Contract for a Specific Task

This agreement is designed for a specific task or project with a well-defined scope. Once the employee completes the designated task, the contract automatically terminates. This type of contract is often used for project-based work where the completion of the project signifies the end of the employment period.

Employment agreements in Tanzania are crucial documents that outline the rights and obligations of both employers and employees. These agreements should encompass a range of key elements to ensure clarity and prevent future disputes.

Basic Information and Job Details

The agreement should detail the names, addresses, and other relevant information of both parties. It should also clearly outline the employee's role, duties, and responsibilities. The commencement date of employment and whether the position is permanent, fixed-term, part-time, or casual should be specified.

Compensation and Benefits

The employee's remuneration, including basic salary, allowances, and any bonuses or incentives, should be clearly stated. The frequency and method of salary payment should be outlined. Any benefits offered, such as health insurance, pension contributions, or paid leave entitlements, should be specified.

Working Conditions

If applicable, the duration and expectations of the probationary period should be defined. The standard working hours, overtime procedures, and the primary place of work should be clearly outlined. The employee's rights to annual leave, sick leave, maternity leave, and other forms of leave as mandated by law or collective agreements should be detailed.

Termination

The grounds for termination by either party should be outlined, following Tanzanian labor laws. This should include the required notice periods for termination. Any severance pay entitlements in case of termination should be specified.

Additional Clauses (Optional)

The agreement can include a clause that protects sensitive employer information the employee may access during their employment. It can define ownership rights over intellectual property created by the employee during their work. The process for resolving any disagreements arising from the employment contract can be outlined. Clauses related to non-compete and non-solicitation, while enforceable to a limited extent in Tanzania, should be carefully drafted to comply with local regulations.

Probationary periods are a standard feature in Tanzanian employment contracts, providing employers with an opportunity to evaluate a new employee's suitability for the role. However, these periods are governed by specific regulations to ensure fairness for both parties.

Key Points on Probationary Periods in Tanzania

Probationary periods are legal in Tanzania, although there's no explicit mention in the Employment and Labour Relations Act (ELRA). Instead, the Employment and Labor Relations (Code of Good Practice) regulates them. The maximum probationary period cannot exceed twelve months. This duration should be reasonable based on the job's nature, required standards, and industry practices. Probation can be extended for a further reasonable period only after consulting the employee if the initial period wasn't enough for proper evaluation.

Employer's Responsibilities During Probation

Employers have a duty to monitor and assess the employee's performance throughout the probation. They are obligated to provide regular feedback and guidance to the employee on their progress. If the employer has concerns about the employee's performance, they must inform the employee and give them an opportunity to improve.

Employee Rights During Probation

Employees have the right to understand the terms and conditions of their probation period as outlined in the employment contract. They deserve a fair and objective assessment based on pre-determined criteria. Employees who successfully complete probation can expect confirmation of their employment with full benefits.

Confidentiality clauses are a common feature in Tanzanian employment contracts, designed to protect an employer's confidential information, or trade secrets. Trade secrets can include a variety of elements, such as formulas, inventions, customer lists, and marketing strategies.

Key Points on Confidentiality Clauses

• Employee's Obligations: The clause typically outlines the employee's responsibility to maintain the confidentiality of the employer's trade secrets. This includes refraining from disclosing such information to unauthorized individuals or using it for personal gain.
• Identification of Confidential Information: The contract should clearly define what constitutes confidential information. This can be achieved through a list or a more general description.
• Permitted Use: The clause should specify how the employee can use confidential information for their work purposes.

Non-compete clauses, on the other hand, restrict an employee's ability to work for a competitor or start a competing business after leaving the company. These clauses are intended to protect the employer's legitimate business interests, such as client relationships and unique business methods.

Legality and Enforceability of Non-Compete Clauses

Unlike confidentiality clauses, the enforceability of non-compete clauses in Tanzania is less certain. There's no explicit legislation governing their validity. However, courts might consider them unenforceable if deemed an unreasonable restraint of trade.

Factors Affecting Enforceability

• Reasonableness of Restrictions: Courts may consider factors like the geographical scope, duration of the restriction, and the employee's position within the company when assessing reasonableness.
• Protection of Legitimate Interests: The clause should safeguard a legitimate business interest of the employer, such as protecting trade secrets or preventing unfair competition.

Recommendations

• Seek Legal Advice: Both employers and employees are advised to consult a Tanzanian employment lawyer when drafting or reviewing non-compete clauses. This ensures the clause aligns with legal principles and protects each party's interests.
• Focus on Confidentiality: Confidentiality clauses are generally more enforceable than non-compete clauses in Tanzania. Employers can focus on safeguarding confidential information through these clauses.