The Employment and Labour Relations Act (ELRA) of 2007 regulates employment contracts, terminations, and worker rights in Kenya, affecting all employees and employers. The Act applies to all contracts of employment, whether written or oral, and sets out the minimum terms and conditions of employment.
The ELRA came into effect on 1 June 2008, with a threshold of 5 million Kenyan shillings (approximately $50,000) for certain provisions to apply.
Employment Contracts
Under Section 10 of the ELRA, an employment contract must be in writing and contain specific details, including the job description, salary, and benefits, within 30 days of commencement of employment. The contract must also comply with the minimum wage requirements set out in the Labour Institutions Act, which is 13,572 Kenyan shillings (approximately $135) per month. In practice, this means that employers must provide employees with a written contract that meets these requirements to avoid penalties.
The ELRA also provides for a 2-month probationary period, during which either party can terminate the contract without notice, as per Section 12. In plain terms, this means that employees are not entitled to notice or severance pay if their contract is terminated during the probationary period. The court may award up to 12 months’ salary in compensation for unfair termination, as per Section 49.
This is where the law gets teeth, as employers who fail to comply with the ELRA’s contract requirements can face fines of up to 1 million Kenyan shillings (approximately $10,000), as per Section 71. The ELRA also requires employers to provide employees with a certificate of service upon termination, which must be issued within 7 days of termination, as per Section 51.
Types of Employment Contracts
The ELRA recognizes different types of employment contracts, including permanent, temporary, and casual contracts. Each type has its own set of rules and requirements, as outlined in the Act.
Permanent Contracts
Permanent contracts are those that are intended to be of indefinite duration, as per Section 9 of the ELRA. Employees on permanent contracts are entitled to benefits such as annual leave, sick leave, and maternity leave, as per Sections 24-28. In plain terms, this means that employees on permanent contracts have greater job security and are entitled to more benefits than those on temporary or casual contracts.
Employers must provide employees on permanent contracts with a minimum of 30 days’ notice of termination, as per Section 35. The court may award up to 24 months’ salary in compensation for unfair termination, as per Section 49.
Temporary Contracts
Temporary contracts are those that are for a specific period, as per Section 10 of the ELRA. Employees on temporary contracts are not entitled to the same benefits as those on permanent contracts, but are still entitled to minimum wage and safe working conditions, as per Sections 22-23. In practice, this means that employers must provide employees on temporary contracts with a written contract that meets the minimum requirements of the ELRA.
Casual Contracts
Casual contracts are those that are for a short period, usually less than 3 months, as per Section 11 of the ELRA. Employees on casual contracts are not entitled to benefits such as annual leave or sick leave, but are still entitled to minimum wage and safe working conditions, as per Sections 22-23. The ELRA requires employers to pay casual employees a minimum of 15,000 Kenyan shillings (approximately $150) per month.
Termination of Employment Contracts
The ELRA sets out the procedures for terminating employment contracts, including notice periods and severance pay, as per Sections 35-40. Employers must provide employees with a minimum of 28 days’ notice of termination, as per Section 35. In plain terms, this means that employers must follow the procedures set out in the ELRA to avoid penalties.
Employees who are terminated unfairly may be entitled to compensation, as per Section 49. The court may award up to 12 months’ salary in compensation for unfair termination. The ELRA also requires employers to provide employees with a certificate of service upon termination, which must be issued within 7 days of termination, as per Section 51.
This is where the law gets teeth, as employers who fail to comply with the ELRA’s termination procedures can face fines of up to 500,000 Kenyan shillings (approximately $5,000), as per Section 71. In practice, this means that employers must ensure that they follow the correct procedures when terminating an employment contract to avoid penalties.
Worker Rights
The ELRA sets out the rights of employees, including the right to fair wages, safe working conditions, and freedom from discrimination, as per Sections 20-23. Employees are entitled to a minimum wage of 13,572 Kenyan shillings (approximately $135) per month, as per Section 22. In plain terms, this means that employers must provide employees with a safe working environment and fair wages to avoid penalties.
Employees who are discriminated against may be entitled to compensation, as per Section 49. The court may award up to 12 months’ salary in compensation for unfair termination. The ELRA also requires employers to provide employees with a safe working environment, which includes providing personal protective equipment and training on safety procedures, as per Section 23.
The ELRA sets out the requirements for employers to provide employees with a safe working environment, including providing personal protective equipment and training on safety procedures, as per Section 23. Employers who fail to comply with these requirements can face fines of up to 1 million Kenyan shillings (approximately $10,000), as per Section 71.
Penalties and Fines
The ELRA sets out the penalties and fines for non-compliance with the Act, including fines of up to 1 million Kenyan shillings (approximately $10,000) for employers who fail to comply with the contract requirements, as per Section 71. Employers who fail to provide employees with a written contract can face fines of up to 500,000 Kenyan shillings (approximately $5,000), as per Section 71.
In practice, this means that employers must ensure that they comply with the ELRA’s requirements to avoid penalties. The ELRA also requires employers to pay employees a minimum wage of 13,572 Kenyan shillings (approximately $135) per month, as per Section 22. Employers who fail to comply with this requirement can face fines of up to 200,000 Kenyan shillings (approximately $2,000), as per Section 71.
The ELRA sets out different penalty tiers, including a fine of up to 500,000 Kenyan shillings (approximately $5,000) for first-time offenders, and a fine of up to 1 million Kenyan shillings (approximately $10,000) for repeat offenders, as per Section 71. In plain terms, this means that employers who fail to comply with the ELRA’s requirements can face significant penalties.
Special Situations or Edge Cases
Maternity Leave
The ELRA sets out the requirements for maternity leave, including a minimum of 3 months’ leave, as per Section 29. Employees who are pregnant or on maternity leave are entitled to benefits such as maternity leave pay and medical care, as per Sections 29-30. In practice, this means that employers must provide employees with a safe working environment and fair wages to avoid penalties.
Termination Due to Illness
The ELRA sets out the procedures for terminating an employment contract due to illness, including a minimum of 30 days’ notice, as per Section 35. Employees who are terminated due to illness may be entitled to compensation, as per Section 49. The ELRA requires employers to provide employees with a certificate of service upon termination, which must be issued within 7 days of termination, as per Section 51.
Enforcement and Violations
The ELRA sets out the procedures for enforcing the Act, including the role of the Labour Court and the Labour Inspectorate, as per Sections 73-74. Employers who fail to comply with the ELRA’s requirements can face penalties, including fines and imprisonment, as per Section 71. In practice, this means that employers must ensure that they comply with the ELRA’s requirements to avoid penalties.
The Labour Court has the power to award compensation to employees who have been unfairly terminated, as per Section 49. The court may award up to 12 months’ salary in compensation for unfair termination. The ELRA requires employers to provide employees with a safe working environment, which includes providing personal protective equipment and training on safety procedures, as per Section 23.
Recent Changes or Current Status
The ELRA has undergone several amendments since its enactment, including amendments to the minimum wage and maternity leave provisions, as per Sections 22 and 29. The most recent amendment was in 2020, which increased the minimum wage to 13,572 Kenyan shillings (approximately $135) per month, as per Section 22. In plain terms, this means that employers must ensure that they comply with the updated requirements to avoid penalties.
In practice, this means that employers must stay up-to-date with the latest amendments to the ELRA to ensure compliance. The ELRA requires employers to provide employees with a written contract that meets the minimum requirements, as per Section 10. Employers who fail to comply with this requirement can face fines of up to 500,000 Kenyan shillings (approximately $5,000), as per Section 71.
- U.S. Department of Labor. relevant wage or leave regulation
- U.S. Equal Employment Opportunity Commission. workplace discrimination guidance
- Office of the Law Revision Counsel. relevant federal employment statute
