A picture of a type of employment contract

Types of Employment Contracts in Kenya

Every time an employee is onboarded, they are expected to sign several documents. One of them is an employment contract. Even though every new hire will sign the contract, not all employment contracts are the same.

An employer should give the employee a contract that matches their working relations, discussed terms, etc.

We have compiled a list of different types of employment contracts in Kenya so you can understand what each one means.

Before looking at the different types of employment contracts, let’s start by understanding what an employment contract is.

What is an employment contract?

In Kenya, the Employment Act of 2007 (“the Act”) governs employment contracts. 

According to the Act, a contract of employment is described as an agreement, whether verbal or written, and whether explicit or implicit, to engage or work as an employee for a specific duration.

Employment lasting over three months must be documented in writing, and the worker should receive a written statement of particulars at the job’s start or within two months of beginning work.

Important details to include in the employment contract include:

Employee Information:

Information about the employee should be on the contract including full name, age, gender, and permanent address.

Employer Information:

The contract should include the employer’s name

Nature of Work:

Among the contents of the employment contract are the job description, start date, and contract duration, work location and hours

Remuneration:

The contract should include the pay details.

Terms and Conditions

There should also be annual leave, public holidays, holiday pay, sick leave, pensions, notice periods, collective agreements, disciplinary rules, and other relevant matters.

It is important for the employee to carefully go through the contract to ensure that they are okay with the contents before signing.

Types of Employment Contracts

In Kenya, workers are engaged through four distinct types of employment contracts.

Distinct types of employment contracts in Kenya

Contract for an unspecified period of time

This type of contract has no predetermined end date, allowing either party to terminate it with notice. Employers must adhere to tenure restrictions outlined in collective agreements if applicable.

Contract for a specified period of time

Employment is for a specified duration, automatically concluding upon reaching the specified end date. Extensions are possible, but not exceeding one month.

Contract for a specific task (piecework employment)

Workers are hired for particular tasks or projects, with the contract ending upon completion of said tasks or projects.

Contract for casual employment

Casual employees work for no more than twenty-four hours at a time and are remunerated at the end of each day.

What are the benefits of employment contracts?

Protection of sensitive data

One of the key advantages of an employment contract is data protection. 

As an employer, you can have your employer bound to not share company trading secrets with competitors. 

This will help to ensure that sensitive information about your organization remains safe and protected even after the employee’s departure.

Clearly defined expectations

As mentioned above, all types of employment contracts should include the nature of work including the job description, work hours, remunerations, etc. 

This information helps to highlight what is expected of both parties ie the employer and employee. 

The contract will encourage both parties to act accordingly since the document is legally binding, meaning there could be consequences for not doing as required.

Additionally knowing what is expected of you as an employee helps you stay on track making work easier and more efficient.

Job Security

All employment contracts help the employee to have a sense of job security since they include the duration of the work term. 

As an employee, you can know that for a certain period, you will be working in that organization. 

Additionally, knowing the duration of work will enable you to know when you should start job searching again when the contract is almost ending.

This will also benefit the company as the employees will be able to work comfortably knowing that they have a sense of security around their jobs.

Avoidance of misunderstandings

Employment contracts help to reduce conflicts and misunderstandings in the workplace since everyone knows what is expected of them. 

They can always refer if they don’t understand or remember. 

Having everything well explained in the contract will help resolve any issues or concerns that may arise about remuneration, work hours, job responsibilities and so much more. 

A cta for Flexi Personnel employer of record services

Protection of employer and employee.

All different employment contracts help to protect both employees and employers in numerous ways.

Since they are created compliantly they help both parties to act as expected without being wrong to the opposite party.

The contract ensures a smooth and harmonious relationship between both parties.

All types of contracts being legally binding also ensure that any party that wrongs the other faces the necessary repercussions.

Talent attraction and retention

Finding Quality talent is hard and the cost of hiring is always high. 

An employer may use the employment contract to ensure that the employee doesn’t just up and leave. 

Also depending on the type of contract the employer in agreement with the employee can have a specific duration of how long he or she is to stay in the organization.

There are many benefits to employment contracts and the ones mentioned above are just a few.

Conclusion 

Employment contracts are a sensitive matter that carries a lot of weight.

Not only because they are legally binding but because they are the foundation of a working relationship between an employer and employee.

So if you are looking to hire in Kenya, ensure that you create the right type of contract based on the nature and terms of work.

If you can get professional help from lawyers or HR consultancy firms like Flexi Personnel for expert advice the better.

At Flexi Personnel we stand ready to help you hire and pay employees in Kenya and Africa at large. If you would like to learn more about our services check out our Employer of Record services to understand our service scope.

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