Amendments to Employment Law

The Employment (Amendment) Act 2021 came into force on 15 April 2021, amending the Employment Act 2007 (the Act) by introducing pre-adoptive leave applicable to an employee who is adopting a child. The pre-adoptive leave is one month from the date of placement of the child with the employee. 

The Employment (Amendment) Act 2022 came into force on 22 April 2022, amending the provision of the Act on general conditions of a contract of service by providing, among other things, that an employer shall not require an employee to submit any clearance or compliance certificate unless the employer intends to enter into a contract of service with the employee. 

A legal notice issued on 1 July 2022 gave effect to the Regulation of Wages (General) (Amendment) Order 2022, which has raised the minimum wages in Kenya by 12%, effective since 1 May 2022. 

On 14 January 2022 the following regulations were gazetted pursuant to the Data Protection Act 2019:

• the Data Protection (General) Regulations 2021;
• the Data Protection (Complaints Handling Procedure and Enforcement) Regulations 2021;
• the Data Protection (Registration of Data Controllers and Data Processors) Regulations 2021;
• the General Regulations and the Compliance and Enforcement Regulations became effective in March 2022, whereas the Registration Regulations became effective on 14 July 2022. The regulations are aimed at bringing into effect various sections of the Data Protection Act 2019, including the requirement for registration of data controllers and data processors.

The National Hospital Insurance Fund (Amendment) Act 2022 took effect on 28 January 2022 and introduced, among other things, a requirement for employers to match their employees’ contributions to the Fund. An application was filed by the Federation of Kenya Employers challenging some provisions of the Act following which an order was made on 21 April 2022 staying the implementation of the Act. The case is still pending. 

The National Social Security Fund Act (2013), which repealed the NSSF Act CAP 258 of 1965, had among other things, increased monthly contributions to the fund categorised into Tier I and Tier II.

The 2013 Act was declared null and void by the Employment & Labour Relations Court in its judgment delivered on 19 September 2022 in Consolidated Petition No 38 of 2014. The monthly contributions have now reverted to KES200 by the employee and KES200 by the employer (a total contribution of KES400) in accordance with the 1965 Act. The new President has, however, stated categorically his desire to increase the monthly payments.

In July 2021 the decision of the three-judge bench in the case of Monica Munira Kibuchi & 6 others v Mount Kenya University and Attorney General (Interested Party) [2021] eKLR, cemented the position that an employee on probation is entitled to a disciplinary hearing before termination.

In the Kenyan context, there is no distinction in the treatment of blue-collar and white-collar employees.

The type of employment contract issued to an employee is at the employer’s discretion. The most common types are fixed-term contracts and permanent contracts (open-ended contracts).

Fixed-term Contract

These contracts have a defined end date. Nowadays they are more common than open-ended contracts as they give employer’s flexibility to engage employees based on their present and known operational requirements. The ease of termination by not renewing the contract also makes them attractive. There is no limit to the number of times an employer can issue a fixed-term contract and the duration of the contract is at the employer’s discretion. 

Permanent/Open-ended Contract

An employee in this case is engaged for an open-ended period. This, however, does not prevent an employer from terminating the contract where valid grounds for termination arise and subject to the stipulated termination procedures.

Other types of contracts include:

• Casual employment: a "casual" is an employee who is engaged for a maximum of 24 hours at a time, and receives payment at the end of each day. If the casual works continuously or in aggregate for at least one month or performs work which cannot be completed in less than three months, the employee is entitled to be given not less than one month's notice of termination. If the casual works for two consecutive months, the employment shall automatically be converted to regular employment (Section 37 of the Employment Act 2007).
• A contract to perform specific work. The contract ends upon completion of the assigned task.
• Piece-rate contract – "piece work" means any work the pay for which is ascertained by the amount of work performed irrespective of the time occupied in its performance.

Form of Employment Contracts

Employment contracts may be either oral or in writing. However, where the duration of employment extends to three or more working months, the employer must provide a written contract consisting of the particulars of employment and ensure that it is signed by the employee (Section 9 of the Employment Act 2007).

Formal requirements

The particulars of employment may be given in instalments not later than two months from the start date of the employment period (Section 10(1) of the Employment Act 2007). 

There are some particulars of employment which must be included in the contract (Section 10 of the Employment Act 2007), including:

• the name, age, permanent address and sex of the employee;
• the name of the employer;
• the job description;
• the date of commencement of the employment;
• the form and duration of the contract;
• the place of work;
• the hours of work;
• the remuneration, scale or rate of remuneration, the method of calculating that remuneration and details of any other benefits;
• the intervals at which remuneration is paid;
• the date on which the employee's period of continuous employment began; 
• annual leave and sick leave entitlement;
• applicable pensions and pension schemes; 
• duration of the contract (if fixed-term);
• place of work;
• applicable collective agreements;
• applicable terms for employees who are required to work outside Kenya for more than one month; and
• termination notice period, etc.

If the employer has more than 50 employees, they must also provide the employee with a statement on disciplinary rules and the procedure for handling grievances.

An employer has the discretion to set the working hours subject to statutory limits.

Regulation 5 of the Regulation of Wages (General) Order (the General Regulations) prescribes that a normal working week shall consist of a maximum of 52 hours of work spread over six days of the week. An employee who undertakes night duties may work for a maximum of 60 hours per week. 

Every employee is entitled to at least one rest day in every seven-day period (Section 27(2) of the Employment Act 2007).

Overtime regulations 

Compensation 

If an employee works in excess of the contractual working hours, or if the employee works on a normal rest day or public holiday, the additional hours are treated as overtime. Overtime worked on normal working days is compensated at the rate of one and a half times the employee’s normal hourly rate. Overtime worked on normal rest days or public holidays is compensated at two times the employee’s normal hourly rate (Regulation 6 of the General Order). 

The employer may instead opt to give paid time off, known as time off in lieu, which serves as compensatory time given in place of receiving monetary compensation. 

Employees who undertake managerial work typically do not qualify for overtime payment; a clause to this effect should be included in their contracts.

The cumulative number of hours of overtime together with time worked in a normal week in every two consecutive weeks shall not exceed:

• 116 hours for all other adult employees; and
• 144 hours for employees engaged in night work.

Flexible Arrangements

Flexible arrangements may be entered into on such terms as are stipulated by an employer in a policy and subject to the statutory limits on working hours. 

Part-time Contracts

Part-time contracts are not legislated. Since part-time workers are ‘employees’ under the Employment Act 2007, they are entitled to the stipulated minimum terms and conditions of employment which may be pro-rated, where necessary.

Our courts have relied on the International Labour Organisation Part-Time Work Convention 1994, which defines a part-time worker as an employed person whose normal hours of work are less than those of comparable full-time workers. 

Minimum Wage 

Minimum wages are set only for specific categories of workers. These include general labourers, watchmen, nannies, domestic workers, caretakers, sweepers, messengers, cashiers, receptionists, shop attendants, telephone operators, artisans, etc.

For all other workers, the wages/salaries are set by the employer and negotiated with the employee.

The 13th Month

A 13th month bonus payment is in addition to the ordinary 12 months’ pay in a financial year. It is, however, not mandatory. It is entirely dependent on the discretion of the employer, or provided in the employment policy, the employment contract, or in the collective bargaining agreements.

Government Intervention in Compensation

This occurs through minimum wage regulation. Wage increments are normally announced on Labour Day when the government considers it necessary to increase the minimum wage. 

The government may also establish wage councils where it is considered that the remuneration and other conditions of employment of any category of employees in any sector is not adequately regulated by collective agreements and that it may be expedient to set minimum wages and other conditions of employment in respect of employees in those sectors.

The government also intervenes through the Salaries and Remuneration Commission, which is the constitutional body mandated to set and regularly review the remuneration and benefits of all State Officers, and also advise the national and county governments on the remuneration and benefits of all other public officers.

Vacation and Vacation Pay

Holiday or vacation is accounted for in the law under the provision for annual leave (Section 28 of the Employment Act 2007).

For every 12 consecutive months worked with their employer, an employee is entitled to annual leave consisting of a minimum of 21 working days with full pay. If an employee is terminated after two or more consecutive months of service, the employee is entitled to at least one and three-quarter days of paid leave for each completed month of service. 

Maternity Leave (Section 29 of the Employment Act 2007)

A female employee is entitled to three months’ maternity leave with full pay. The leave may be extended with the consent of the employer. On expiry of the maternity leave, the employee shall have the right to return to the job which she held immediately prior to her maternity leave or to a reasonably suitable job on terms and conditions not less favourable than those which would have applied had she not been on maternity leave.

Paternity Leave (Section 29 of the Employment Act 2007)

A male employee is entitled to two weeks’ paternity leave with full pay. 

Sick Leave (Section 30 of the Employment Act 2007)

Section 30 of the Employment Act 2007 prescribes a minimum sick leave period of seven days with full pay, and a subsequent seven days with half pay for every 12 consecutive months of service. This leave is only granted when the employee produces a certificate of incapacity to work signed by a duly qualified medical practitioner.

The general order, however, provides for a maximum of 30 days with full pay and thereafter to a maximum of 15 days with half pay. Due to the contradiction between the Employment Act 2007 and the general order, some court decisions provide that employers should go with the provision in the general order.

Compassionate Leave (Regulation 11 of the General Order)

An employee desiring to take leave on compassionate grounds shall, by prior arrangement with the employer, be granted such leave up to their earned leave entitlement, and the leave taken shall be subsequently set off against their annual leave. An employee may, in addition, be granted five days’ compassionate leave without pay in any one year.

Most employers give compassionate leave as a standalone leave which is not deducted from annual leave. 

Pre-adoptive Leave (Section 29(A) of the Employment Act 2007)

This leave is applicable to an employee to whom an adopted child is placed in continuous care and control. It is a one-month leave with full pay from the date of placement of the child. 

Confidentiality and Non-disparagement

These are not legislated, however; there is an implied duty on an employee to act in good faith in relation to the employer. It is prudent for an employer to include confidentiality and non-disparagement clauses in employment contracts/policies. 

Non-compete clauses are dealt with under the Contracts in Restraint of Trade Act. A restrictive clause is not automatically void. In determining whether or not to enforce the clause, the court will consider whether the clause is reasonable in the interests of the parties or the interests of the public, taking into account:

• the nature of the profession, trade, business or occupation concerned;
• the period of time;
• the area within which it is expressed to apply; and
• all the circumstances of the case.

Restrictive clauses will not be upheld if the employer terminates the employment contract in breach of the terms of the contract.

Courts will not enforce a restraint that goes further than affording adequate protection to the legitimate interest of a person in whose favour it is granted.

In some court decisions it has been held that to be enforceable such restraint must seek to limit the use of only that which is uniquely the employer’s secret, and not knowledge and skill which can be acquired by learning, experience or development in technology. The employer must demonstrate the nature of the secrets or information that the former employee gained access to and how they are likely to divulge or use the same in their current employment to the detriment of the former employer.

Enforcement of Non-compete Clauses

The reasonableness test is used to determine whether restrictive clauses can be enforced. 

The reasonable test is understood at two levels:

• reasonable in the public's best interests, ie, not harming the interests of the general population.
• reasonable in light of the interests of the parties, ie, not offering more than adequate protection to the employer. The courts consider the conflicting interests of the employer and the former employee.

In relation to non-solicitation clauses with regard to employers and customers, the same applies as in 3.1 Non-competition Clauses. 

The Constitution of Kenya, 2010

Article 31 guarantees every person the right to privacy, including the right not to have information relating to their family or private affairs unnecessarily required or revealed, or the privacy of their communications infringed.

The Data Protection Act, 2019

The Act embodies provisions which regulate the processing of personal data.

A data subject is an individual to whom personal data relates. In employment this includes: job applicants, employees, former employees, interns, etc.

An employer falls under the category of a data controller as a person or entity that determines the purpose and means of processing personal data.

The Act also provides for data processors who are persons or entities appointed by a data controller to process personal data on its behalf. They include payroll providers, insurance companies, storage service providers, etc. 

According to Section 25 of the Data Protection Act, every data controller or data processor shall ensure that personal data is:

• processed in accordance with the right to privacy of the data subject;
• processed lawfully, fairly and in a transparent manner in relation to any data subject;
• collected for explicit, specified and legitimate purposes and not further processed in a manner incompatible with those purposes;
• adequate, relevant, limited to what is necessary in relation to the purposes for which it is processed;
• collected only where a valid explanation is provided whenever information relating to family or private affairs is required;
• accurate and, where necessary, kept up to date, with every reasonable step being taken to ensure that any inaccurate personal data is erased or rectified without delay;
• kept in a form which identifies the data subjects for no longer than is necessary for the purposes for which it was collected; and
• not transferred outside Kenya unless there is proof of adequate data protection safeguards or consent from the data subject.

According to Section 26, data subjects have the following rights:

• to be informed of the use to which their personal data is to be put;
• to access their personal data in the custody of the data controller or data processor;
• to object to the processing of all or part of their personal data;
• to the correction of false or misleading data; and
• to deletion of false or misleading data about them.

According to Section 18, no person shall act as a data controller or data processor unless they are registered with the Data Commissioner. According to Regulation 13 of the Data Protection (Registration of Data Controllers and Data Processors) Regulations 2021, a data controller or data processor is exempt from mandatory registration where the data controller or data processor:

• has an annual turnover of below KES5 million or annual revenue of below KES5 million; and
• has less than ten employees, unless they operate in one of the listed sectors which include educational institutions.

The Act is supported by the following subsidiary legislation:

• the Data Protection (General) Regulations 2021;
• the Data Protection (Registration of Data Controllers and Data Processors) Regulations 2021; and
• the Data Protection (the Complaints and Enforcement Regulations) Regulations 2021.

Other statutes relating to data protection include:

• the Health Act 2017, which requires that information relating to a person’s health status, treatment or stay in a health facility is kept confidential unless required otherwise under the Act; and
• the HIV and AIDS Prevention and Control Act 2006, which provides privacy guidelines and regulates the disclosure of information concerning a person’s HIV/AIDS status.

According to the Kenya Citizenship and Immigration Act 2011, it is illegal for a non-citizen of Kenya to be present in Kenya unless they have a valid work permit, residency permit, or pass.

No one may hire a foreign national who entered Kenya unlawfully or whose status does not permit them to engage in employment. Additionally, it is unlawful for employers to hire foreign nationals on conditions other than those that are permitted by their status (Section 45 of the Kenya Citizenship and Immigration Act 2011).

It is the responsibility of the employer to apply for and obtain a work permit or special pass conferring on the foreign national the right to engage in employment before granting the foreign national employment.

In the case of an employee ceasing to work for the employer for any reason, the employer specified in the work permit is required to report in writing to the Director of Immigration within 15 days that the holder of a permit has ceased to engage in the employment in respect of which the permit was issued, and any employer who fails to do so commits an offence.

Foreign workers are issued with alien cards (foreign national certificates) on successful processing of a work permit application.

According to Section 2 of the Labour Relations Act 2007, a trade union is an association of employees whose principal purpose is to regulate relations between employees and employers, including any employers’ organisation. 

The principal purpose of a trade union is to further the interests of workers in regards to better wages and terms and conditions of employment. They do this through the collective bargaining process. 

Trade unions also represent the interests of employees in disciplinary processes (Section 41 of the Employment Act 2007).

Trade unions are the only legislated employee representative bodies. 

Trade unions are sector-based, meaning they represent workers in the sectors stated in their respective constitutions. 

The application for registration is made to the Registrar of Trade Unions. The application will be declined if there is another trade union which is sufficiently representative of the whole or of a substantial proportion of the interests in respect of which the applicants seek registration.

Employees who are not covered by a trade union are at liberty to set up representative bodies. Since they are not legislated, the cooperation of the employer is necessary for the body to fully attain its objectives. 

According to Section 2 of the Labour Relations Act, a collective agreement means a written agreement concerning any terms and conditions of employment made between a trade union and an employer, group of employers or organisation of employers.

The agreement is formed through the collective bargaining process.

Once negotiated, the terms of the CBA are binding and are applied uniformly to all the unionisable employees in the workplace (Section 59(1) of the Labour Relations Act 2007).

The period of validity of the Agreement is stipulated in the agreement. 

Recognition of a Trade Union

Recognition vests in a trade union the legitimate authority to collectively bargain. 

Section 54 of the Labour Relations Act requires an employer to recognise a trade union for purposes of collective bargaining if that trade union represents the simple majority of unionisable employees in the workforce of the employer. 

Registration of a CBA

Once parties conclude their negotiations, they must sign the Agreement and have it registered at the Employment & Labour Relations Court. Once registered, the Agreement gains legal recognition and is binding upon the parties (Section 59(5) of the Labour Relations Act 2007). 

According to Section 45 of the Employment Act 2007, an employer is permitted to terminate a contract of employment for any of the following grounds:

• misconduct;
• poor performance; and
• the employer’s operational requirements.

Termination Procedure

Prior to termination on account of misconduct and poor performance, an employer is required to explain to the employee the reasons why the employer is considering termination and accord the employee a disciplinary hearing (Section 41 of the Employment Act 2007). A termination on account of poor performance should be preceded by the employee being given a reasonable opportunity to improve. 

Collective Redundancies

According to Section 2 of the Employment Act 2007, "redundancy" is the loss of employment, occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous. 

Section 40 of the Employment Act 2007 provides the redundancy process and it is read together with case law. A summary of the process is as follows: 

• issuing a 30-day notice of intended termination on account of redundancy to the affected staff/trade union and the labour officer;
• developing a selection criteria based on skill, ability, reliability and seniority; 
• consultations with staff/trade union on the selection criteria;
• conducting the selection process;
• issuing a notice of termination to the selected staff; and
• payment of terminal dues – accrued leave, salary up to the last day of employment and severance of not less than 15 days’ pay for every year worked.

An Outline of Formalities

According to Section 35 of the Employment Act 2007, the termination notice periods are as follows:

• where the contract is to pay wages daily, the contract is terminable by either party at the close of any day without notice;
• where the contract is to pay wages periodically at intervals of less than one month, the contract is terminable by either party at the end of the period following the issuance of the written notice; and
• where the contract is to pay wages or salary periodically at intervals of at least one month, the contract is terminable by either party at the end of the period of 28 days following the issuance of the written notice.

Pay in lieu of notice is also permitted (Section 36 of the Employment Act 2007).

Employees on probation may, unless otherwise indicated in the contract, be terminated by giving seven days' notice or payment in lieu of notice (Section 42 of the Employment Act 2007). Termination should be preceded by a disciplinary hearing. 

Severance Pay

The conditions of severance pay are as those indicated in 7.1 Grounds for Termination.

Conditions and Consequences

According to Section 44 of the Employment Act 2007, summary dismissal is the termination of an employee without notice or with less notice than that to which the employee is entitled by any statutory provision or contractual term.

Summary dismissal is reserved for gross misconduct, which occurs when an employee has by their conduct indicated that they have fundamentally breached their obligations under the contract of service.  The following examples of gross misconduct are provided at Section 44(4) of the Employment Act 2007:

• without leave or other lawful cause, an employee absents themselves from the place appointed for the performance of their work;
• during working hours, by becoming or being intoxicated, an employee renders themselves unwilling or incapable to perform their work properly;
• an employee wilfully neglects to perform any work which it was their duty to perform, or if they carelessly and improperly perform any work which from its nature it was their duty, under their contract, to have performed carefully and properly;
• an employee uses abusive or insulting language, or behaves in a manner insulting to their employer or to a person placed in authority over them by their employer;
• an employee knowingly fails, or refuses, to obey a lawful or proper command which it was within the scope of their duty to obey, issued by their employer or a person placed in authority over them by their employer;
• in the lawful exercise of any power of arrest given by or under any written law, an employee is arrested for a cognisable offence punishable by imprisonment and is not within 14 days either released on bail or on bond or otherwise lawfully set at liberty; or
• an employee commits, or on reasonable and sufficient grounds is suspected of having committed, a criminal offence against or to the substantial detriment of their employer or their employer's property.

The termination process is the same as outlined at 7.1 Grounds for Termination. 

Parties to an employment contract are permitted to enter into an agreement for the termination of the employment. This is normally referred to either as a separation agreement or a mutual separation agreement. For the agreement and release to be enforceable:

• it must be voluntary; that is, the employee should not be forced or coerced or pressured into signing a mutual separation agreement or threatened with adverse disciplinary action;
• it is, therefore, important for the employer to give the employee adequate time to consider the proposed terms of separation; and
• the employee should be encouraged to seek independent legal counsel on the proposed terms of separation. 

There is no specific provision on protection from dismissal/termination for particular categories of employees. However, there are grounds of termination that are considered wrongful and unfair grounds on which an employer may not dismiss an employee. Section 46 of the Employment Act 2007 lists the grounds for which a person should not be dismissed as follows:

• a female employee's pregnancy, or any reason connected with her pregnancy; 
• the going on leave of an employee, or the proposal of an employee to take any leave to which they were entitled under the law or a contract; 
• an employee's membership or proposed membership of a trade union; 
• the participation or proposed participation of an employee in the activities of a trade union outside working hours or, with the consent of the employer, within working hours;
• an employee's seeking of office as, or acting or having acted in the capacity of, an officer of a trade union or a workers' representative; 
• an employee's refusal or proposed refusal to join or withdrawal from a trade union; 
• an employee's race, colour, tribe, sex, religion, political opinion or affiliation, national extraction, nationality, social origin, marital status, HIV status or disability; 
• an employee's initiation or proposed initiation of a complaint or other legal proceedings against their employer, except where the complaint is shown to be irresponsible and without foundation; or 
• an employee's participation in a lawful strike.

Dismissal of an employee is deemed wrongful/unlawful where the employer fails to uphold substantive or procedural fairness, or both.

Consequences for a Wrongful Dismissal or Termination Claim

The employee may lodge a complaint with the labour officer within three months of the date of dismissal/termination. The employee equally has the option of instituting a suit in Employment & Labour Relations Court. If the claim is successful, the employee may be given damages of up to 12 months’ salary or the court may order reinstatement or re-engagement of the employee.

Article 27 of the Constitution outlaws discrimination by providing that every person is equal before the law and has the right to equal protection and equal benefit of the law. The Employment Act 2007 provides a similar prohibition. 

Grounds for Anti-discrimination Claims

Discrimination on any ground is unlawful. The Constitution enumerates the following examples: race, sex, pregnancy, marital status, health status, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, dress, language or birth. In addition to these grounds, the Employment Act 2007 prohibits discrimination in respect of any employment policy or practice such as recruitment, training, promotion, terms and conditions of employment, termination of employment or other matters arising out of the employment.

Burden of proof

The employee bears the burden of proving the existence of discriminatory treatment. The burden of proof is on a balance of probabilities: the employee should prove that discrimination occurred. Once an employee sufficiently raises a prima facie case of discrimination, the burden shifts to the employer to prove that there was no discriminatory treatment.

Damages/relief applicable

The general rule is that assessment of damages by the courts is a matter of judicial discretion, with due regard to the circumstances of the case, the gravity of the discriminatory treatment and judicial precedence.

Employment Forums and Representation of Claims

The Employment and Labour Relations Court is a specialised court with the status of the High Court established under the Constitution of 2010. It has both original and appellate jurisdictions in matters involving employment and labour issues. Appeals from the ELRC therefore proceed to the Court of Appeal.

Some magistrates’ courts also have jurisdiction to handle employment and labour relations cases.

Employment disputes may be referred to a labour officer for mediation prior to escalation to court. 

Disputes involving trade unions are normally first referred to conciliation before a conciliator appointed by the Cabinet Secretary for Labour and Social Protection. 

Parties may choose to be represented by an advocate or to be self-represented. 

Class action suits are permitted.

Arbitration

Arbitration is an available avenue for dispute resolution where the employment contract or collective bargaining agreement provides for it.

Alternative modes of dispute resolution are encouraged. If at any stage of the proceedings it becomes apparent that the dispute ought to have been referred for conciliation or mediation, the court may stay the proceedings and refer the dispute for conciliation, mediation or arbitration. 

An arbitration award is enforced in the same manner as a decree or order issued by the High Court.

A court of law has the discretion to award costs to a party that is successful in litigation. Costs are normally assessed on the basis of the Advocates (Remuneration) Order 2014, which sets out the minimum fees which an advocate may charge for specified services. 

In employment cases, the courts typically refrain from awarding costs against employees unless the court is persuaded that the claim was malicious.