Understanding what an employment contract is
Employment contracts are primarily governed by the Employment Act 2007
The following are the provisions specifically relating to form and nature of employment
Employment contract is also known as a contract of service defined by section 2 of the
Employment Act As follow; “contract of service” means an agreement, whether oral or
in writing, and whether expressed or implied, to employ or to serve as an employee for
a period of time, and includes a contract of apprenticeship and indentured learnership
but does not include a foreign contract of service…
A contract of service for a period or a number of working days which amount in the
aggregate to the equivalent, of three months or more1.
Particulars of a written contract of service
Section 10(2) of the Employment Act provides that a written contract of service shall
state—
a) the name, age, permanent address and sex of the employee;
b) the name of the employer;
c) the job description of the employment;
d) the date of commencement of the employment;
e) the form and duration of the contract;
f) the place of work;
g) the hours of work;
h) the remuneration, scale or rate of remuneration, the method of calculating that
remuneration and details of any other benefits;
i) the intervals at which remuneration is paid; and
j) the date on which the employee’s period of continuous employment began,
taking into account any employment with a previous employer which counts
towards that period; and
k) any other prescribed matter
Section 10 (3) provides for further requirements in the contract of service as follows;
(a) any terms and conditions relating to any of the following—
i. entitlement to annual leave, including public holidays, and holiday pay (the
particulars given being sufficient to enable the employee’s entitlement, including
any entitlement to accrued holiday pay on the termination of employment, to be
precisely calculated
1
Section 9 of the Employment Act 2007
ii. incapacity to work due to sickness or injury, including any provision for sick pay;
and
iii. pensions and pension schemes;
(b) the length of notice which the employee is obliged to give and entitled to receive to
terminate his contract of employment;
(c) where the employment is not intended to be for an indefinite period, the period for
which it is expected to continue or, if it is for a fixed term, the date when it is to end;
(d) either the place of work or, where the employee is required or permitted to work at
various places, an indication of that place of work and of the address of the
employer;
(e) any collective agreements which directly affect the terms and conditions of the
employment including, where the employer is not a party, the person by whom they
were made; and
(f) where the employee is required to work outside Kenya for a period of more than one
month—
i. the period for which that employee is to work outside Kenya;
ii. the currency in which remuneration is to be paid while that employee is
working outside Kenya;
iii. any additional remuneration payable to the employee, and any benefits due to
the employee by reason of the employee working outside Kenya; and
iv. any terms and conditions relating to the employee’s return to Kenya.
Statement of the disciplinary procedures
Where the employer has employed more than fifty employees at the date the employee
starts work, the employer is obliged to provide the employee with a statement of
disciplinary rules as required under section 12 of the employment Act.
The statement of disciplinary rules shall specify the following;
(a) the disciplinary rules applicable to the employee or refer the employee to the
provisions of a document which is reasonably accessible to the employee which
specifies the rules;
(b) the person to whom the employee may apply—
(i) if dissatisfied with any disciplinary decision relating to the employee; and
(ii) for the purpose of seeking redress of any grievance relating to his
employment and the manner in which an application shall be made; and
(c) where there are further steps to be taken consequent to any such application,
explain the steps or refer the employee to the provisions of a document which is
accessible to the employee which explains the steps.
Application of the law of contract
It is important to bear in mind that in Kenya, employment contacts are also governed by
the general law of contract as much as by the principles of common law now enacted
and regulated by the Employment Act and other related statutes
Relevant case law
Case 1: A letter of offer if accepted by the employee, amounts to employer-
employee relationship.
Case: Fedelix Mwendwa Muli v Bamburi Cement Limited [2018] eKLR
The Claimant applied for a job with the Respondent, and was offered a job, to work as a
Field Patroller. The letter of offer is dated 14 th October 2014. The appointment, it was
indicated, would take effect, on 1st November 2014. The Claimant accepted the offer in
writing, on 22nd October 2014. The Respondent withdrew the offer, on 31 st October
2014, a day before appointment was said to take effect. Withdrawal was on the ground
that Claimant’s previous Employer had written to the Respondent, revealing that the
Claimant was a troublesome Employee while working for the previous Employer, who
had sabotaged production lines.
The fundamental question in this dispute is whether there was an Employer-Employee
relationship created through the letter of offer from the Respondent to the Claimant, and
acceptance of offer by the Claimant. Secondly, what is the effect of breach, if such a
relationship is found to have been created?
The court was of the view that an Employer-Employee relationship was created once
the Employee and his Witness, signed the Acceptance Form in conformity with section
9 (3) of the Employment Act. A binding employment contract was therefore created on
22nd October 2014.
The court further held that the contract at this stage was a probationary contract and
therefore the claimant was not entitled to damages. However, since the contract had
provided that the employer ought to have given a one notice, he was obliged to do so.
The court awarded the claimant one-month salary in lieu of notice
Case 2: The terms of employment contracts need not be contained in a single
document
Case: Coastal Bottlers Ltd v George Karanja [2014] eKLR
This case concerns an appeal to the High court in Mombasa that was brought by Coast
bottlers (employer) the award of ksh.1,126,971.00 as gratuity to the respondent by the
subordinate court. According to the appellant the letter appointing the respondent as her
employee did not provide for payment of gratuities on termination of his services. The
respondent on his part contended that his employment contract was governed by the
appellant' terms and conditions of for management of 2002 in addition to the initial letter
of appointment dated 6/7/1998. Consequently, according to him, he was entitled to
gratuities as provided under the said 2002 management terms and conditions of service
When the appellant denied liability, the respondent sued successfully before the subordinate
court.
The high court applied the provisions of Section 14(2) of the employment Act and held
that a contract of employment can consists of terms contained in a series of separate
documents and memoranda published by employer to their staff.
The court therefore disallowed the appeal for want of merits
