Employment Contracts in Kenya: What Every Employer Must Include

A clear, compliant employment contract is the foundation of every healthy working relationship, and in Kenya it is also a legal requirement. Yet many growing businesses still hire on a handshake or a vague offer letter, only to run into avoidable disputes later. This guide covers what the law expects and what a good contract should include.

Is a written contract a legal requirement in Kenya?

Under the Employment Act 2007, any contract of service expected to last more than three months, or to involve work that cannot reasonably be completed within three months, must be in writing. The employer is responsible for preparing it, and both parties should keep a signed copy. A written contract protects everyone: it sets expectations, reduces disputes, and is essential if a matter ever reaches the labour office or a court.

The essential terms every contract should include

At a minimum, a Kenyan employment contract should clearly state:

• The names of the employer and employee, and the date employment begins.
• Job title and a short summary of duties.
• Place of work and normal working hours.
• Remuneration: gross pay, how and when it is paid, and any allowances or benefits.
• Statutory deductions that apply: PAYE, NSSF, SHIF, the Affordable Housing Levy, and HELB where relevant.
• Leave entitlements: annual, sick, and maternity or paternity leave.
• Notice period for termination by either party.
• Probation terms, if any.
• Reference to the policies that apply, such as disciplinary, grievance, and code of conduct.

Common contract types

• Permanent (open-ended): no fixed end date; ends on resignation, retirement, or lawful termination.
• Fixed-term: runs for a set period or project, and should state the end date or completion event.
• Casual: day-to-day engagement; note that casual employees working continuously can acquire additional rights over time.
• Probationary: an initial trial period with shorter notice, governed by specific rules.

Mistakes that lead to disputes

• No written contract, or one that contradicts what was verbally agreed.
• Vague or missing terms on pay, hours, or termination.
• Ignoring statutory minimums on leave, notice, or deductions.
• Treating long-serving "casuals" as if they have no rights.
• Copy-pasting a template that does not reflect the actual role or current Kenyan law.

A quick pre-hire checklist

Before a new employee starts, make sure you have:

• A signed written contract for engagements over three months.
• An offer letter setting out the agreed terms.
• The employee's KRA PIN, NSSF and SHIF details, and bank information.
• Registration in place for statutory deductions.
• A copy of your key policies shared with the employee.

Disclaimer: This article is general guidance for educational purposes and is not legal advice. Employment law and statutory rates change. For advice specific to your organisation, speak to a qualified HR or legal professional.