Understanding Probationary Contracts in Kenya

In Kenya, probationary contracts are a widely used mechanism in the employment landscape, allowing employers and employees to assess mutual suitability before committing to a long-term employment relationship. These contracts are governed by the Employment Act of 2007, and serve as a trial period, offering flexibility to employers while also raising important considerations for employees.

Legal Framework of Probationary Contracts

The Employment Act, 2007, provides the foundation for probationary contracts in Kenya. Section 2 defines a probationary contract as a written employment agreement, not exceeding twelve months, that explicitly states it is for a probationary period. Section 42(2) further stipulates that the initial probationary period cannot exceed six months but may be extended for an additional six months with the employee’s consent, ensuring the total duration does not surpass one year. This legal cap is strictly enforced - any employment continuing beyond twelve months, even by a single day, automatically converts to permanent status under Kenyan law.

The Act also outlines termination procedures during probation. Historically, employers could terminate a probationary contract with minimal procedural requirements, simply providing seven days’ notice or payment in lieu thereof. However, a landmark 2021 ruling in Monica Munira Kibuchi & 6 others v Mount Kenya University declared Section 42(1), which excluded probationary employees from the fair hearing protections of Section 41, unconstitutional. This decision ensures that probationary employees now enjoy the same procedural safeguards as permanent staff, including the right to a fair hearing before termination.

Benefits of Probationary Contracts

Probationary contracts offer distinct advantages for both employers and employees. For employers, these contracts provide flexibility to evaluate an employee’s performance, behavior, and cultural fit without the stringent requirements of terminating a confirmed employee. This is particularly valuable for roles requiring specific skills, allowing employers to confirm an employee’s capabilities align with job expectations. Additionally, the relative ease of termination during probation, provided fair procedures are followed, reduces legal risks compared to dismissing permanent staff, where valid reasons must be substantiated under Section 45 of the Act.

For employees, probation serves as an opportunity to assess the job and organization, ensuring it meets their expectations. It acts as a trial phase, offering a chance to demonstrate competence and secure long-term employment. This period historically protected employers from premature unfair termination claims, though recent judicial shifts have balanced this dynamic by extending employee protections.

Challenges and Pitfalls

Despite their benefits, probationary contracts present challenges. For employees, job security remains a significant concern. The constant evaluation during probation can create uncertainty, potentially lowering morale and productivity if employees feel their position is perpetually at risk. Moreover, employees on probation are not entitled to severance pay at the end of the period, which can leave them financially vulnerable if the contract is not renewed.

For employers, the evolving legal landscape introduces complexity. The “catch-22” situation created by conflicting court rulings on probationary rights. Prior to the 2021 ruling, employers relied on Section 45(3), which barred probationary employees from claiming unfair termination if they worked less than thirteen months. However, judicial decisions like Samuel G Momanyi v Attorney General & Anor (2012) began challenging this, arguing that denying fair hearing rights based on contract duration was discriminatory. The Monica Munira Kibuchi ruling solidified this shift, requiring employers to navigate stricter procedural obligations, thus reducing the original flexibility probation offered.

Termination and Extension Procedures

Terminating a probationary contract now requires adherence to fair labor practices under Articles 41 and 47 of the Kenyan Constitution, which guarantee fair labor practices and administrative action, respectively. Employers must explain the reasons for considering termination and consider any representations from the employee or their representative, aligning with Section 41’s mandates for permanent staff. Termination still requires at least seven days’ notice or payment in lieu, but the process must be just and transparent.

Extensions beyond the initial six months are permissible but hinge on employee consent and must be justified by performance or suitability concerns, as noted in Wilson Simiyu Vs Chairman B.O.G Friends School Bokoli & Another (2016). Employers must communicate any extension before the current probationary period lapses, ensuring transparency and mutual agreement. Failure to extend or terminate within the twelve-month limit results in automatic confirmation of permanent employment.

Pros and Cons

Pros for Employers:

• Flexibility to assess employee fit without long-term commitment.
• Reduced legal risks in termination, provided fair procedures are followed.
• Opportunity to test specific skills critical to the role.

Cons for Employers:

• Increased procedural burden post-2021 ruling.
• Potential for legal disputes if extensions or terminations are mishandled.

Pros for Employees:

• Chance to evaluate job suitability and organizational culture.
• Pathway to permanent employment upon successful completion.

Cons for Employees:

• Limited job security and no severance pay.
• Risk of disengagement due to ongoing evaluation pressure.

CONCLUSION

Probationary contracts in Kenya remain a vital tool for aligning employer and employee expectations, governed by a clear yet evolving legal framework under the Employment Act, 2007. While they offer flexibility and assessment opportunities, recent judicial interpretations have emphasized fairness, extending constitutional protections to probationary employees. Employers must balance their need to evaluate staff with adherence to due process, while employees must navigate the uncertainties of probation with an eye toward securing long-term stability. Understanding these dynamics, along with the rights and obligations they entail, is essential for fostering equitable and productive employment relationships in Kenya’s dynamic labor market.