labour laws and

Economics
Employment contract
Contract of service VS the contract of an
independent contractor -(contract for service).

Advancing Knowledge, Driving Change | www.kca.ac.ke

introduction

• While an employment contract (contract of service)

is an agreement between employer and employee
in which employee works for employer in exchange
for remuneration, a contract for an independent
contractor (contract for service) on the other hand is
one in which one person hires another person to do
a specific job or piece of work e.g. consultancy, a
contract to build a house etc.

Advancing Knowledge, Driving Change | www.kca.ac.ke

2
Introduction.
• The person letting out the work is seen as the
principal and the person doing the work is seen as
the agent. This is not a contract of employment but
a contract relating to the performance of a certain
piece of work for a certain period of time.

Advancing Knowledge, Driving Change | www.kca.ac.ke

3
 Factors to be considered in drawing the
distinction between an employee and an
independent contractor

• In case of disputes related to employment contracts the court

will use the following key factors to determine whether a
person is an employee of an organization or an independent
contractor;

1) Control test – This test determines whether the employer has

the right to supervise the other person. Where the right of
supervision exists then this is an indicator of existence of an
employment contract. Under normal circumstances the
principal has no right to supervise a person under a contract
of independent contractor.
Advancing Knowledge, Driving Change | www.kca.ac.ke
4
Independence
• This looks at whether the worker is dependent on
the employer in the performance of duties e.g. does
the employer provide vehicles, equipment's,
instructions etc.
• A person contracted as an independent contractor is
not dependent on the employer of the organization
he is working in for performance of his duties.

Advancing Knowledge, Driving Change | www.kca.ac.ke

5
Freedom to work for another-
• Whether the worker is allowed to work for another.
Under normal circumstances someone who is on
employment contract is not allowed to work for
anyone else.
• Prohibition from working for a competitor

Advancing Knowledge, Driving Change | www.kca.ac.ke

6
Performance of duty
personally-
• Whether the worker is obliged to perform his/her
duties personally.
• In the case of independent contractor the work can
be hired off to someone else. It does not really
matter who does the work as long as the job gets
done
• An employee has to personally attend to duty.

Advancing Knowledge, Driving Change | www.kca.ac.ke

7
Provision of working tools-
• Whether the worker provides his/her own tools
and equipment's for work.
• The independent contractor normally brings along
his tools of work.
• An employee is provided with the tools by the
employer

Advancing Knowledge, Driving Change | www.kca.ac.ke

8
Right to discipline-
• Whether the employer has the right to discipline
the worker. The existence of this right would
normally indicate control meaning that there is an
employment contract.

Advancing Knowledge, Driving Change | www.kca.ac.ke

9
taxation
• Employees are taxed under PAYE whereas IC are
taxed under other laws.

• Vicarious liability:-employer is held accountable

and liable for the wrongful acts committed by the
employee in the course of duty. No so in the case of
IC

Advancing Knowledge, Driving Change | www.kca.ac.ke

10
Employment protection laws
• All laws relating to protection of employees apply in
the case of contract of service- e.g annual leave,
number of hours worked, sick leave, social security
laws, etc

Advancing Knowledge, Driving Change | www.kca.ac.ke

11
Essential's of a valid contract of
employment
• Offer and acceptance
• Consideration
• Capacity to contract
• Free will
• Legality
• Possibility of performance
• Form and content

Advancing Knowledge, Driving Change | www.kca.ac.ke

12
Common law duties of employer
• Reasonable management
• Provide work
• Indemnity
• Pay
• Safety of equipment and premise
• Reasonable systems of work
• Non disclosure of Confidential information

Advancing Knowledge, Driving Change | www.kca.ac.ke

13
Common law duties of employee
• Personal service
• Indemnity in the event of employer incurring losses
due to negligence of employee
• Conduct-proper conduct towards employer and
fellow employees
• Loyalty and good faith-have interest of employer at
heart.-personal interest should not clash with
employers interest

Advancing Knowledge, Driving Change | www.kca.ac.ke

14
• Careful service
• Keep trade secrets of the employer
• Obedience to lawful instructions
• Give notice as per the contract
• Inventions made in the course of employment using
employers resources belong to the employer

Advancing Knowledge, Driving Change | www.kca.ac.ke

15
 The employment act
• EMPLOYMENT ACT, 2007 (Amended in 2012 &
2021)
• Objective: An Act of Parliament to repeal the
Employment Act, declare and define the
fundamental rights of employees, to provide basic
conditions of employment of employees, to
regulate employment of children, and to provide
for matters connected with the foregoing.

Advancing Knowledge, Driving Change | www.kca.ac.ke

16
application
This Act shall apply to all employees employed by
any employer under a contract of service except;
The armed forces as defined in the Armed Forces
Act (Cap. 199);
The Kenya Police service
The National Youth Service;
An employer and the employer’s dependants where
the dependants are the only employees in a family
undertaking

Advancing Knowledge, Driving Change | www.kca.ac.ke

17
Prohibition against forced labour

• Forced or compulsory labour means any work or

service which is extracted from any person under
the use of threat or which is not offered voluntarily
by the person doing the work or performing the
service.
• (1) No person shall use or assist any other person in
recruiting, trafficking or using forced labour.

Advancing Knowledge, Driving Change | www.kca.ac.ke

18
• (2) The term “forced labour” shall not include—
• (a) Any work or service which forms part of the normal
civic obligations of the citizens of Kenya i.e. obligations
of
citizens e.g. testifying in a court of law as a witness,
volunteer work etc.
(b) Any work or service exacted from any person as a
consequence of a conviction in a court of law e.g. work
done by prisoners
(
Advancing Knowledge, Driving Change | www.kca.ac.ke
19
c) Any work or service exacted in cases of an
emergency to the state, such as in the event of war or
disaster. Citizens can be called upon to help e.g. fire
outbreak
(d) Minor communal services performed by the
members of the community in the direct interest of
the said community, provided the members of the
community or their representatives are consulted.

Advancing Knowledge, Driving Change | www.kca.ac.ke

20
• (e) Any work or service exacted by virtue of
compulsory military service laws for work of a
purely military character e.g. military, paramilitary
or other security related trainings which are deemed
to be tough.

Advancing Knowledge, Driving Change | www.kca.ac.ke

21
Discrimination in employment

No employer shall discriminate directly or indirectly,

against an employee or prospective employee on
grounds of race, colour, sex, language, religion,
political or other opinion, nationality, ethnic or social
origin, disability, pregnancy, mental status or HIV
status;

Advancing Knowledge, Driving Change | www.kca.ac.ke

22
Exceptions-It is not discrimination to—

• Take affirmative action measurers consistent with

the promotion of equality or the elimination of
discrimination in the workplace e.g. to effect
regional balance, gender balance etc.

• ) Distinguish, exclude or prefer any person on the

basis of an inherent requirement of a job e.g.
bachelor’s degree, masters etc.

Advancing Knowledge, Driving Change | www.kca.ac.ke

23
• Restrict access to some categories of people where
it is necessary in the interest of State security e.g.
security vetting for some state jobs.

Advancing Knowledge, Driving Change | www.kca.ac.ke

24
EMPLOYEE RIGHTS AT WORK

(1) The provisions of this Part shall constitute basic

minimum terms and conditions of contract of
service.
(2) Where the terms and conditions of a contract of
service are regulated by any regulations, as agreed in
any collective agreement or contract between the
parties, are more favorable to an employee than the
terms provided in this Part, then such favorable terms
and conditions of service shall apply.

Advancing Knowledge, Driving Change | www.kca.ac.ke

25
Hours of work
An employee shall be entitled to at least one rest day in
every period of seven days

Annual leave
(1) An employee shall be entitled to not less than twenty-
one working days of leave with full pay per annum.
(b) Where employment is terminated after the completion
of two or more consecutive months of service, to not less

Advancing Knowledge, Driving Change | www.kca.ac.ke

26
• than one and three-quarter days of leave with full
pay, in respect of each completed month of
service. (21/12 = 1.75 days per month). An
employer may, with the consent of the employee
divide the minimum annual leave into different
parts to be taken at different intervals. one part of
the parts agreed upon shall consist of at least two
uninterrupted working weeks.

Advancing Knowledge, Driving Change | www.kca.ac.ke

27
Maternity leave
A female employee shall be entitled to three months
maternity leave with full pay.
Paternity Leave
A male employee shall be entitled to two weeks
paternity leave with full pay. (Effective on the date
indicated on the birth notification).

Advancing Knowledge, Driving Change | www.kca.ac.ke

28
Sick leave
After two consecutive months of service with an
employer, an employee shall be entitled to sick leave
of not less than seven days with full pay and
thereafter to sick leave of seven days with half pay,
in each period of twelve consecutive months of
service, subject to production by the employee of a
certificate of incapacity to work signed by a duly
qualified medical practitioner.

Advancing Knowledge, Driving Change | www.kca.ac.ke

29
Medical attention
An employer shall ensure the sufficient provision of
proper medicine for his employees during illness and
if possible, medical attendance during serious illness.
(Equipped First aid kit must be available at the
workplace).

Advancing Knowledge, Driving Change | www.kca.ac.ke

30
Housing
An employer shall at all times, at his own expense,
provide reasonable housing accommodation for each
of his employees either at or near to the place of
employment, or shall pay to the employee such
sufficient sum, as rent, in addition to the wages or
salary of the employee, as will enable the employee
to obtain reasonable accommodation.

Advancing Knowledge, Driving Change | www.kca.ac.ke

31
Water
An employer shall provide a sufficient supply of
water for the use of his employees at the place of
employment and, as the case may be, within a
reasonable distance.

Advancing Knowledge, Driving Change | www.kca.ac.ke

32
Food
An employer shall, where the provision of food has
been expressly agreed to in or at the time of entering
into a contract of service, ensure that an employee is
properly fed at the employer’s expense.

Advancing Knowledge, Driving Change | www.kca.ac.ke

33
THE EMPLOYMENT (AMENDMENT) ACT, 2021
d

• Introduction of Pre-Adoptive Leave

• The Employment Act has been amended to entitle an
employee to one month’s pre-adoptive leave with full pay
where a child is placed in the employee’s continuous care
and control, from the date of the placement of the child.

• An employee is required to notify his/her employer in writing

of the intention of the adoption society to place a child in the
employee’s custody at least 14 days before the placement of
the child and the notice should be accompanied by the
relevant documentation, including a custody agreement and
an exit certificate from a registered adoption society.
Advancing Knowledge, Driving Change | www.kca.ac.ke
34
• Employers should ensure that their human
resources policies are updated and that the
employment contracts of their employees reflect
the pre-adoptive leave entitlement.

Advancing Knowledge, Driving Change | www.kca.ac.ke

35
• The end
• Thank you

Advancing Knowledge, Driving Change | www.kca.ac.ke

36