Foreword

With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance inKenya.

01 Overview of the Labor Law System

1. Legal System

Kenya is a common law jurisdiction.

2.Resources and Agencies

There are several statutes and regulations that govern employment and labour relations in Kenya, the main instruments being the following:

•Constitution

•Employment Act

•Occupational Safety and Health Act

•Work Injury Benefits Act

•Labour Relations Act

•Industrial Training Act

•Labour Institutions Act

•Employment and Labour Relations Court Act

• Employment and Labour Relations Court (Procedure) Rules

02 Employment Qualifications and Classification

1.Employment Age 

Generally, the law proscribes the employment of children under the age of thirteen years. For purposes of employment, the legal pensionable age in Kenya is sixty year.

2.Qualifications for Employment 

A foreign entity may hire a Kenyan national without a permanent establishment.

3.Classification of Employment

•Contract of service

•Piece work

•Probationary contract

•Casual employee

• Fixed Duration Contract

4.Foreign Workers 

In Kenya, there is no mandatory, legislated ratio requirement between domestic and foreign workers. However, the regulatory process itself serves as a de facto localization policy. Pursuant to Section 34(2) of the Kenya Citizenship and Immigration Act (Chapter 170 of the Laws of Kenya) any foreign national intending to work in Kenya, whether for a short-term assignment or long-term employment, must obtain a work permit before commencing work.

03 Recruitment and Employment Contracts

1.Background Examination

The employer must obtain the applicant’s written consent prior to initiating any screening process, and the applicant has the right to object, in which case the process must cease.

2.Contract Types

Indefinite Contracts, Fixed-Term Contracts, Casual Employment, Part-Time Employment, Probationary Contracts.

3.Probationary Period

The Employment Act provides for a probationary period of a maximum of six months. This period can be extended for a further six months with the consent of the employee, provided the probation contract cannot exceed a cumulative period of twelve months.

04 Working Standards

1.Remuneration and Statutory Benefits

The typical and popular remuneration structure in Kenya in relation to payment of wages is Daily with respect to Casual employees and payment of wages Monthly for employees who work for periods longer than twenty-six (26) to twenty-eight (28) days in any given month。

2.Social Security and Employment Taxes

The Employment Act authorises an employer to effect deductions on an employee's salary of any amount the deduction of which is authorised by any written law for the time being in force. Some of the mandatory statutory deductions are as follows：

•Pay As You Earn (PAYE)

•National Social Security Fund (NSSF)

•Affordable Housing Levy

The Social Health Insurance Regulations, 2024 imposes an obligation on the employer to deduct the contribution of a salaried contributor (employee) at the rate of 2.75% of the gross salary or wage of the employee and submit the said contribution to the Social Health Authority by the 9th day of each month. This is an employee only contribution.

3.Working Hours 

The general standard for a normal working week in law in Kenya consists of not more than fifty-two (52) hours of work spread over six (6) days of the week while an employee working on night work should work for not more than sixty (60) hours of work per week . However, in practice, the normal working hours for day employees usually consist of forty-five (45) hours of work per week, that is Monday to Friday, 8 hours each and 5 hours on Saturday.

4.Rest and Leave

Both the Employment Act and the Regulation of Wages (General) Order provide that every employee is entitled to one (1) whole rest day in every period of seven (7) days.

05 Occupational Health and Special Protection

1.Occupational Health and Security

Work Injuries Benefits Act - an employer has a duty to protect the health and safety of employees in the course of their employment.

Occupational Safety and Health Act - This Act provides for the safety, health and welfare of workers, thereby preventing work-related injuries and diseases. The Act also protects third party individuals from risks to their health and safety arising from or in connection with the activities of people at work.

2.Special Protection 

The Employment Act provides that no person shall employ a child who has not attained the age of thirteen years whether gainfully or otherwise in any undertaking. A child of between thirteen years of age and sixteen years of age may be employed to perform light work which is— (a) not likely to be harmful to the child's health or development; and (b) not such as to prejudice the child's attendance at school, his participation in vocational orientation or training programmes approved by Cabinet Secretary or his capacity to benefit from the instructions received.

06 Personal Information and Privacy

1.General Rules

The initial legislation protecting employee privacy and personal data is Article 31 Constitution of Kenya promulgated in 2010 which grants all Kenyans the right to privacy. Thereafter, the Data Protection Act ("DPA") was enacted in 2019 which gave further effect to Article 31. The DPA does so by establishing the Office of the Data Protection Commissioner and making specific regulation for the processing of personal data, laying out the rights of data subjects and obligations of data controllers & data processors.

2.Transnational Transfer 

An employer is only permitted to transfer employees’ personal data outside Kenya where they have provided adequate proof to the Data Commissioner that the intended transfer is necessary and that it has put in place adequate safeguards for the intended transfer. Additionally, and in the instances where the data intended to be transferred is sensitive personal data, the employer is required to (in addition to proving necessity and adequate safeguards) provide the Data Commissioner with explicit consent obtained from the employees.

07 Anti-Discrimination and Anti-Harassment

1.General Rules 

Article 27 and 41 of the Constitution of Kenya 2010, prohibits discrimination based on the outlined protected characteristics and guarantees employees’ right to fair labour practices (i.e. including freedom from discrimination and harassment at the workplace).

Additionally, sections 4-6 of the Employment Act, 2007 prohibits forced labour, discrimination in employment and prohibits sexual harassment in the workplace.

2.Protective Characters

Article 27 (4) of the Constitution of Kenya, 2010 expressly states the protected characteristics which include: “race, sex, pregnancy, marital status, health status, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, dress, language or birth.”

08 Internal Policies

1.Applicability

It is common practice in Kenya to manage workers through internal policies. They have statutory underpinning in the Employment Act, Chapter 226 of the Laws of Kenya.

2.Validity

Where the company has negotiated and entered into a collective agreement with a trade union, for the internal policies to be applicable to the employees that are members of that trade union, the same would have to be negotiated in accordance with the terms of the collective agreement.

3.Whistleblowing

There is no express legislation in the Employment Act and the Labour Relations Act recognising whistleblowing in the employer–employee relationship. The Employment & Labour Relations Court has however had instances where it is faced with Claims arising from issues to do with whistleblowing.

09 Transactions

1.Employment Relationship 

The continuation of employment contracts in such transactions is not automatic. It depends on the arrangement of the parties, given that the Employment Act (Chapter 226, Laws of Kenya) does not currently provide a comprehensive framework on employee transfers in such instances.

2.Compensation 

Employees are not automatically entitled to compensation solely because of a merger, acquisition or equity transfer. Compensation only arises where employment is interrupted, for example, if employees are declared redundant or are not absorbed by the acquirer. In such circumstances, section 40 of the Employment Act requires the employer to pay redundancy dues, including notice pay, severance pay and accrued leave.

10 Termination of Employment

1.Termination Grounds

Section 43 of the Employment Act requires that the reason for termination of employment must be one which the employer, at the time of termination, genuinely believed to exist and which directly informed the decision to terminate the employee. The focus, therefore, is not on what may later be argued or uncovered, but on the employer’s bona fide belief at the time the decision was made.

2.Termination Procedure 

The Employment Act requires employers to observe procedural safeguards such as notice, a hearing and the opportunity for the employee to make representations. Failure to comply with the Employment Act’s substantive and procedural requirements exposes the employer to remedies, including compensation and orders for reinstatement or re-engagement.

3.Severance and Compensation

The Employment Act under section 40 provides for severance pay, but only where an employee is terminated on account of redundancy. The section further provides a list of conditions that an employer needs to comply with when terminating an employee on account of redundancy, one of the said conditions is that the employer has to pay to an employee declared redundant severance pay at the rate of not less than fifteen days' pay for each completed year of service.

4.Wrongful Termination

Section 49 of the Employment Act prescribes the remedies available to an employee for wrongful dismissal or unfair termination.

5.Mass termination and Layoffs

In Kenya presently, there is no statutory regime labelled collective dismissal or mass terminations.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality 

It is not mandatory legal requirement for employees to sign confidentiality agreements. However, it is common practice, especially for employees in certain roles. Most employers include confidentiality clauses in employment contracts or require separate non-disclosure agreements for employees likely to access sensitive information.

2.Non-Compete and Non-Solicitation

Kenyan law permits non-compete and non-solicitation clauses in employment contracts but subjects them to strict scrutiny. These clauses are governed by the Contracts in Restraint of Trade Act (Chapter 24, Laws of Kenya) and common law principles.

12 Work Representation and Trade Unions

1.Work Representation 

Kenyan employees enjoy constitutionally protected freedom of association. Article 36 (1) guarantees the right to form, join, and participate in associations of any kind.

2.Trade Unions 

To begin with, trade unions established under the Labour Relations Act enjoy institutional and decision-making autonomy. In effect, they may manage their internal affairs and advance workers’ rights in line with their mandates.

13 Dispute Resolution

1.Procedures & Enforcement

The primary forum for resolving labor and employment disputes in Kenya is the Employment and Labour Relations Court (ELRC). The ELRC has original and appellate jurisdiction to hear all disputes related to employment and labor relations, including those between an employer and an employee, or an employer and a trade union.

2.Waiver & Enforcement 

While an employee may agree to waive certain contractual rights, such as a termination notice period in exchange for payment in lieu of notice, a blanket waiver of fundamental statutory rights is generally not permissible.

14 Others

1.Latest Development & Trends

Kenya’s labour relations and practice have advanced significantly since the 2007 reforms to the labour law regime. However, consistent implementation of both procedural and substantive requirements by employers remains a recurring issue in the courts. From a practice perspective, a persistent gap is the limited involvement of lawyers experienced before the Employment and Labour Relations Court (ELRC) to guide employers in administering employment contracts and managing disputes.

2.Cultural and Religious Considerations

Culturally significant events—such as bride-price ceremonies and burial rites—may warrant reasonable time off to enable attendance. From a religious lens, Kenya’s major faiths include Christianity, Islam, Hinduism, and African traditional beliefs. Employers are expected to make reasonable accommodations for participation in key religious observances and regular worship (for example, Friday prayers for Muslims or the Saturday Sabbath for Seventh-day Adventists).

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Chacha Oderais the Senior Partner at Oraro & Company Advocates and a key practitioner in the Dispute Resolution practice group. With over 36 years of experience, he has represented both local and international clients in commercial disputes, employment and labour law, property law, and alternative dispute resolution.

Sandra Kavagiis a Partner at Oraro & Company Advocates in the Dispute Resolution practice group, specialising in Employment & Labour Law practice.

Translator

Zhou Hao, Master of Laws, Associate at Anli Partners. Areas of expertise: Labor Law, Dispute Resolution, ESG Compliance.