Beware, that title on your job contract matters
Posted Wednesday, July 18 2012 at 19:16
Employers and employees could be taking the title of their contracts for granted.
A keen court of law would not, should a dispute arise.
So here is the question: did you sign a contract of service or a contract for service?
Is the contract that binds you to work a contract OF or FOR service? Whether you are an employer or employee, you may want to take a second look at the title of the document that binds you.
The two words are distances apart, thanks to the less thought- about implications of the two simple words — “of” and “for” when signing contracts. Using one in place of the other introduces a complete set of legal and functional implications.
It is important to establish the distinctions because there is some sloppiness in the application of these titles in the local market.
Let us start with the definitions.
The Employment Act 2007 defines contract of service as “an agreement, whether oral or in writing, and whether expressed or implied, to employ or to serve as an employee for a period of time and includes a contract of apprenticeship and indentured leaner-ship, but does not include a foreign contract of service”.
But when the word “of” is replaced by “for” in a contract of service to read, “contract for service”, the terms of engagement completely change, and of greater implication is the fact that the Employment Act washes it hands off the deal.
A contract for service is drawn when an independent contractor is engaged to perform a specific task for a brief duration, usually as a consultant. In that respect, an independent contractor is not an employee, but an individual who has been “entrusted to undertake a specific project, but who is left free to do assigned work and to choose the method of accomplishing it”.
This is according to the Black’s Law Dictionary, which adds that it does not matter whether the work is done for pay or gratuitously.
This distinction is justified by a growing practice in Kenya among independent contractors, who apply labour laws to perform carry out assignments.
The Employment Act only regulates the relationship between an employer and its employees and not between independent contractor and employer. Part I Section 3(1) of the Act confirms this. It states: “This Act shall apply to all employees working under a contract of service.”
This implies that it has nothing to do with contract for service, which mostly applies to independent contractors.
The main features that distinguish contract of service from contract for service are that under the former, the employer pays wages for the employees work, and regulates the manner in which the work is done.