Introduction
The law guiding employment issues in Kenya is the Employment Act (“the Act”). Section 8 of the Act provides that it relates to both oral and written contracts. Under Section 10(5) of the Act, it is the duty of the employer to keep particulars relating to an employee for a period of 5 years after termination from employment. Where there is no written agreement, the burden of proving or disproving any alleged term of employment shall be on the employer.
Oral Contracts
In Kenya, oral agreements are legally binding. Under Sections 7 and 8 of the Act, oral contracts of employment are recognised provided the essential terms are agreed upon, such as daily wage, working hours, and probation period.
Written Contracts
For written contracts, they have to be in writing and executed by both the employer and the employee. It is an express provision that any contract for over three months must be in writing (Section 9 of the Act). See also Maina v Muchai (Cause 2130 of 2017) (2022) KEELRC 12758 (KLR) (4 April 2022) (Judgment).
Section 10 of the Act provides the employment particulars of the contract, which employers should ensure are incorporated. Beyond merely documenting the employment relationship, employers must ensure that the contract contains all the mandatory particulars prescribed under Section 10 of the Act. These include, among other things:
· Names of the parties
· Job description
· Commencement date
· Place of work
· Hours of work
· Remuneration
· Leave entitlement
· Termination provisions
Failure to incorporate these statutory particulars may expose employers to disputes regarding the terms of employment and may shift the evidentiary burden onto the employer in the event of litigation .
Some difficulties in oral contracts are as follows:
Difficulty in enforcement of key terms
Without a written contract, it can be difficult to prove the terms and conditions of employment. This can lead to disputes between the employer and employee over issues such as salary, benefits, and termination. In the event of a dispute, verbal agreements often rely on witness testimonies, which can be challenging to substantiate as well as past conduct by parties.
Inability to provide adequate protection to the parties
An oral or unwritten contract may not provide adequate protection for either party to it. As outlined earlier, the Act in Sections 9 and 10 sets certain minimum standards for all employment contracts. Without a written contract, an employee may find it difficult to enforce these rights. Notwithstanding the above, parties may orally agree on all those terms but there may be misunderstandings since it is the employer’s word against the employee’s word.
For employers, the absence of a written contract can create significant evidentiary challenges. For instance, where an employee’s employment is terminated on grounds of poor performance or failure to meet agreed productivity targets, an employer may struggle to demonstrate that such targets were communicated, agreed upon, and consistently enforced. Without documented performance standards, job descriptions, or performance improvement plans, it becomes considerably more difficult to justify the termination before a court or labour tribunal.
Additionally, where no evidence is produced by the employee, the court may dismiss the case entirely due to lack of evidence such as payment details, leave records and other details to prove employment relationship. See the case of Magotsi v Marylebone Properties Limited t/a Viraj Millenium Apartments (Appeal E053 of 2024) [2026] KEELRC 620 (KLR) (27 February 2026) (Judgment).
Failure to reflect intention of parties
With an unwritten contract, some terms may be implied from the conduct of the parties which may not be their intention.
The burden of proof is placed on the employer
Section 10(7) of the Act provides that in if in any legal proceedings, an employer fails to produce a written contract or the written particulars, the burden of proving or disproving an alleged term of employment stipulated in the contract shall be on the employer. Where a dispute arises, and an employee institutes legal proceedings, the law places the burden on the employer to disprove any allegation on a term of an unwritten contract by the employees. See the case of Gambedze v Kyumwa & 2 others (Cause E027 of 2024) [2024] KEELRC 2807 (KLR) (14 November 2024) (Judgment) where the court placed the burden of proving the existence of the employment relationship upon the Respondent/employer.
While the convenience of unwritten employment contracts might seem tempting, the risks associated with such agreements under the Kenyan Employment Law outweigh any perceived benefits. Employers and employees are encouraged to formalize their employment relationships through written contracts, which provide clarity, protection, and enforceability.
An unwritten contract also injures the employer’s interests hugely. For example, if an employee is terminated from employment without cause, they may be entitled to damages for wrongful dismissal. Without a written contract setting out the grounds for termination, an employer may find it difficult to prove the termination was justified.
The lack of written evidence can hinder the resolution of disputes through legal channels, leaving both parties vulnerable to uncertainties and protracted legal battles.
Conclusion
While oral employment contracts may be legally enforceable, they often create uncertainty and unnecessary risk. Written contracts provide clarity, protect both parties, and reduce the likelihood of disputes. For employers, investing time in proper documentation is not merely a compliance exercise, it is a critical risk management tool that can prevent costly employment disputes in the future.
At HRFLEEK, we support organisations in developing clear, compliant, and well-structured employment contracts that safeguard both employers and employees while promoting healthy and transparent working