A good employment contract protects both sides of the working relationship. It sets clear expectations, reduces disputes, and ensures compliance with Kenyan labour law. Whether you are hiring your first employee or starting a new job, here is what you should understand about employment contracts in Kenya.
The law behind the contract
Employment relationships in Kenya are governed mainly by the Employment Act, 2007, together with related legislation on labour relations, occupational safety and social security. The Act sets minimum standards that a contract cannot lawfully undercut — including on leave, rest days, and fair treatment.
Key terms every contract should contain
- The names of the parties and the job title and duties.
- The date employment begins and, for fixed-term roles, its duration.
- Remuneration, how and when it is paid, and any benefits.
- Hours of work, leave entitlements and rest days.
- Notice periods and the grounds and procedure for termination.
Where employment is for more than three months, the Act requires that the main terms be put in writing. A written contract is not a formality — it is the reference point if a dispute ever arises.
Termination must be fair
One of the most common sources of disputes is termination. Kenyan law requires both a valid reason (substantive fairness) and a fair process (procedural fairness), including giving the employee a chance to be heard before dismissal for misconduct or poor performance. Redundancy has its own specific notice and consultation requirements. Getting this wrong can expose an employer to claims for unfair termination.
Common pitfalls
- Relying on a verbal agreement with no written terms.
- Misclassifying employees as independent contractors.
- Dismissing staff without a fair reason or fair procedure.
- Ignoring statutory deductions and contributions.
Advice for both sides
Employers should have contracts and policies reviewed so they are compliant and enforceable. Employees should read and understand their contract before signing, and seek advice if terms seem unfair or unclear. Clarity at the start saves conflict later.
Our Employment & Labor Law team advises employers and employees on contracts, disputes and terminations, helping you get the relationship right from the outset.
This article is general information about the law in Kenya and is not legal advice. For guidance on your specific situation, book a consultation with a qualified advocate at Maiyo & Mbugua Law Advocates LLP.