An employment contract, as defined in Black’s Law Dictionary (8th Ed., p. 997), is an agreement between an employer and employee outlining the terms and conditions of employment. The same dictionary (p. 1314) defines an employer-employee relationship as the association where an individual performs services for another, who has the right to control their physical conduct during the service.
In Kenya, employment is governed by the general law of contract and common law principles, including offer, acceptance, consideration, freedom of contract, legal capacity, and due execution. Employment agreements are negotiated between the employer and employee, making the terms specific to them. The employment relationship is regulated by various statutes, including:
- The Employment Act (Cap. 226) and
- The Factories Act (Cap. 514) – Ensures the health, safety, and welfare of employees in factories.
- The Work Injury Benefits Act (Cap. 253) – Provides compensation for employees injured on duty.
The Employment Act recognizes both oral and written contracts. However, Section 9 mandates a written contract for employment lasting three months or more.
Types of Employment Contracts
1. Contract for an Unspecified Period
This contract has no fixed duration and can be terminated by either party with notice.
2. Contract for a Specified Period
This contract specifies a fixed duration and ends automatically upon expiry without being considered a resignation or dismissal. Under Section 39 of the Employment Act, such contracts may be extended for up to one month if the employee is engaged in a journey.
3. Contract for a Specific Task (Piecework Employment)
This contract applies when an employee is hired for a specific task. The contract ends upon task completion (Section 9).
4. Contract for Casual Employment
Casual employment involves daily wage payments, with engagements typically lasting no more than 24 hours at a time.
The Employment Agreement
Section 10 of the Employment Act requires employers to provide a written statement of employment terms within two months of hiring. This statement includes:
- Employee’s name, age, permanent address, and sex
- Employer’s name
- Employment start date
- Job description
- Contract form and duration
- Place of work
- Working hours
- Remuneration details, calculation method, and benefits
- Payment intervals
- Any other prescribed matters (Section 10(1)(2))
Employers must explain contract terms in a manner employees understand, as per Section 9(4) of the Employment Act.
Conclusion
Entering into an oral contract is not advisable, as in legal disputes, the employer bears the burden of proving employment terms (Section 10(7)). Failure to produce a written contract or statement of particulars may result in the dispute being decided against the employer. Providing employees with written contracts ensures clarity and legal protection. Employees should be vigilant in understanding their agreements to safeguard their rights and avoid complications upon termination.
