I own a garage and I have employed some mechanics. Before I used to pay them commissions for work done but we have grown so much and the work in flow is very high. Therefore, I have decided to retain them permanently. I pay them a monthly salary rather than commissions. I want to formalise my engagement with them. What advice can you offer so far as employment documentation is concerned? Ben
Dear Ben, first congratulations on attaining growth. You must count yourself as one of the lucky business owners who have been able to stabilise their businesses and hire permanent employees.
In a case such as yours, it is cheaper to pay a salary rather than commissions when the workflow is very high. As far as employment legal documentation is concerned here are a few tips.
Start with HR policy
First, begin with a human resource (HR) policy as a foundation for all employment contracts that would be drawn up by your business.
The HR policy is one of the best ways to harmonise work culture across all cadres of staff. It is a very good tool for communicating general expectations and standards.
It is very wide and contains several issues such as your vision, mission, goals, values, objectives, principles and general “rules” that apply to all staff.
This document can be used to orient new staff and is also a sound reference point for existing staff. Where one is not sure what to do they can always refer to the policy.
A word of caution though, a human resource policy is binding and can form part of the evidence in a court case, therefore, it is important to be conservative when drafting.
Essentials of a contract
An employment contract must meet the legal threshold required for such legal documents.
All contracts must have the names of the parties well described, dates, a clear offer (for example, a job offer by the employer) and acceptance of the offer by the staff through signing.
The contract must have a job description and a reward or consideration for the performance of the job — in other words, the salary.
The contract must be legal and not contain illegal objects. For example, a contract hiring someone as a drug trafficker will be deemed illegal.
Finally, both parties must have the capacity to enter into the contract. You cannot enter into a binding employment contract with an underage person, for example.
Comply with Employment Act
Kenyan labour law is set out majorly in the Employment Act. The Act contains some basic and mandatory terms of employment.
Read the Employment Act before drafting it as it will help you understand some of the important elements of an employment contract.
Some issues include leave, occupational safety, disciplinary actions, and so on.
While it is not mandatory for you to include these terms in the contract, a contract that contravenes any of these provisions would be null in so far as it contravenes the law.
You can still contract for issues not included in the law, for example, issues like bonuses and benefits.
When drafting the contract, you need to agree on a few basics regarding the same like salaries and job descriptions.
A lawyer can help you draft an adequate employment contract. Do not use templates but have your contracts professionally drawn.
Ms Mputhia is the founder of C Mputhia Advocates
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