terms and conditions

Depending on the seniority of the employee or the nature of the work, an employer may want to consider including the following clauses in an employment contract: –

  1. Confidentiality/non-disclosure – to bind the employee to keep matters pertaining to the organization confidential. This includes confidentiality as to the dealings, research findings, products/services, projections, plans/strategies, practices, pricing, accounts, finances, trading, know-how, trade secrets and customer information.

  2. Non-compete – to prohibit an employee from directly or indirectly engaging in or being employed by a competing business both during and after employment.

  3. Non-solicitation – to prohibit an employee from soliciting/poaching employees or clients during and after employment.

NB: 2 and 3 fall in the category of clauses known as restrictive covenants” whose enforcement is governed by the Contracts in Restraint of Trade Act (Chapter 24, Laws of Kenya). According to the Act, such clauses are only enforceable if they are reasonable.

The High Court has power to declare a restrictive covenant void if the court is satisfied that, having regard to the nature of the profession, trade, business or occupation concerned, and the period of time and the area within which it is expressed to apply, and to all the circumstances of the case, the clause is not reasonable. The idea is not to so tie the hands of an employee as to prevent him from earning a living. For example, for non-compete, a prohibition of six months is likely to be accepted as reasonable especially if the employee is being paid during that time. 

See: –

  • LG Electronics Africa Logistics FZE v Charles Kimari [2012]eKLR – file:///C:/Users/user/Downloads/Civil_Suit_346_of_2012.pdf
  • Bridge International Academies Limited v Robert Kimani Kiarie [2015] eKLR – file:///C:/Users/user/Downloads/Civil_Case_56_of_2014.pdf
  1. Intellectual property – to provide for protection and ownership of the company’s intellectual property – those existing as at the date of employment and those that shall subsequently be created by employees of the company.

  2. Conflict of interest – to compel an employee to disclose any known conflict of interest e.g. interests in companies doing business with the employer, interests in competing businesses, family or romantic relationships with fellow employees etc.

  3. Additional employment – to prohibit an employee from taking up additional employment outside the Company or to prohibit an employee from working for a competitor.

  4. Work permits – to provide for a pro-rated refund of the amount spent by the employer in processing a work permit, should the employment terminate prior to expiry of the permit.

  5. Press statements – to prohibit an employee from making press statements on behalf of the company.

  6. Dispute resolution – to provide for the preferred mode of dispute resolution. For those holding very senior positions, an employer may prefer arbitration to court proceedings due to the private nature of arbitration.

  7. Choice of law – for expatriates or those working for multi-nationals, such a clause determines the law that governs the employment. The Kenya Labour Laws will still apply to the extent that the person is working in Kenya and therefore the employer must comply with our Laws.

  8. Transfer to other entities – permits the employer to move the employee to other affiliate companies and organizations.

  9. Transfer to other countries – permits the employer to move the employee to other work locations.

  10. Training bond – to bind the employee to work for the employer for a certain period after conclusion of a training sponsored by the employer and to provide for a pro-rated refund of the amount spent by the employer for the training, should the employment terminate prior to expiry of the stipulated period.

It’s important to indicate those clauses that are intended to remain in force even after termination of the employment, for example, the duty of confidentiality and the restrictive covenants. In the event of default, the employer has the right to obtain injunctive orders as well as damages against the employee.

next post on…how to effect changes to a contract lawfully

About Anne Babu

Anne is an Advocate of the High Court of Kenya and the Founding Partner of Anne Babu & Co. She has practised employment law for over 12 years and her employment law practice has been recognized by the prestigious Chambers & Partners. Anne cares about employers and their labour issues.


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Comments

  1. Anne, this is good research and revelation to both employer and employees. It is a fact that most organizations don’t use most of these terms but expect the employees to abide.
    Thank you once again

  2. Anonymous says:

    Thanks Ann for this informative advice.

  3. D.O.ONGOYA says:

    Dear Anne,
    This is quite informative.
    Keep up.
    I have read the various articles and hereby confirm that you are greatly helping the HRPS to understand the legal implications of the practices.
    Dr. D.O.ONGOYA, PhD

  4. Elvis says:

    I appreciate your good work. Keep up

    1. Anne Babu says:

      Asante

  5. jerry says:

    Anne, you are doing a great job. surely where have you been, we have been missing this as hr practitioner where we end up blundering because of pressure from the Management
    Keep it up. bravo

    jerry

  6. Anonymous says:

    Ann I like your analysis on employment law + relevant case studies. Keep it up

  7. Josephine says:

    Hello Anne, i kindly need legal advice on the following:
    If the employer were to terminate the services of the employee, after working for several years without contract renewal, can the employer use the old contract provisions to terminate or what happens?
    Are there legal repercussions if an employer terminates an employee without giving reasons for termination but only giving notice in lieu/payment in lieu?
    We have staff with contracts which do not provide house allowance and we need to comply with the requirement of the employment Act. Kindly advice on how we can effect the changes.

    1. Anne Babu says:

      Hi Josephine, if there’s no contract the terms of the Employment Act apply.
      Regarding the second issue, please see the posts on separation. There must be a valid reason for the termination and the proper procedure must be followed.
      On the issue of the house allowance, you can amend to consolidate the salary or split the pay into basic and house allowance. The amendment must be consented to by the employees.

      1. Josephine says:

        Thank you Anne for the information. You are doing a great job. Keep it up!

    2. D.O.ONGOYA says:

      Anne,
      On the other side:
      An employee has been working on an originally 3 months contract that was last renewed in March 2015.
      The employee has continued working since then. It is implied that the contract is renewable after every 3 months.
      The employer now wants to terminate the contract by giving the employee a one month notice.
      What is the legal responsibilty of the employer in terms of terminal dues for this particular employee.

      1. Anne Babu says:

        The employee is deemed to be on an open ended contract since he was not issued with another fixed term contract. The employer should have a valid reason for terminating the contract and the termination procedure should be followed.

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