Executive Employment Contract (Kenya)
EXECUTIVE EMPLOYMENT CONTRACT
Employment Act No. 11 of 2007 | Labour Relations Act No. 14 of 2007
THIS EXECUTIVE EMPLOYMENT CONTRACT ("Agreement") is made on [Agreement Date]
BETWEEN:
(1) [Employer Name] (BRS: [Employer BRS Number]), a company incorporated in Kenya, whose registered office is at [Employer Address] (the "Employer"); and
(2) [Executive Name] (ID/Passport: [Executive ID Number]; KRA PIN: [Executive KRA PIN]), of [Executive Address] (the "Executive").
The Employer and the Executive are together referred to as the "Parties".
1. APPOINTMENT AND DUTIES
1.1 The Employer appoints the Executive to the position of [Job Title] within the [Department] with effect from [Commencement Date].
1.2 The Executive shall report to [Reporting To].
1.3 The Executive's primary place of work shall be [Place of Work].
1.4 The Executive shall faithfully perform all duties associated with the role of [Job Title] and such other duties as the Employer may reasonably assign from time to time, consistent with the seniority of the position.
1.5 Probationary period: [Probation Period]. During probation, either Party may terminate this Agreement on 7 days' written notice under Section 42(3) of the Employment Act No. 11 of 2007.
2. REMUNERATION AND BENEFITS
2.1 The Employer shall pay the Executive a gross monthly salary of [Gross Salary], payable on [Payment Date] by bank transfer to the Executive's nominated account.
2.2 The gross salary includes a housing allowance of [Housing Allowance] per month.
2.3 Transport / car allowance: [Transport Allowance].
2.4 Medical cover: [Medical Cover].
2.5 Performance bonus: [Performance Bonus].
2.6 All statutory deductions shall be made from the Executive's remuneration, including Pay As You Earn (PAYE) income tax under the Income Tax Act Cap. 470, National Social Security Fund (NSSF) contributions under the National Social Security Fund Act No. 45 of 2013, and Social Health Authority (SHA) contributions under the Social Health Insurance Act No. 16 of 2023.
3. LEAVE ENTITLEMENTS
3.1 Annual leave: [Annual Leave] per year of continuous service, taken at a time agreed with the Employer.
3.2 Sick leave: [Sick Leave].
3.3 Maternity leave: 3 months on full pay under Section 29 of the Employment Act No. 11 of 2007.
3.4 Paternity leave: 2 weeks on full pay under Section 29A of the Employment Act No. 11 of 2007.
3.5 Public holidays as declared under the Public Holidays Act Cap. 110 are additional to annual leave.
4. CONFIDENTIALITY AND INTELLECTUAL PROPERTY
4.1 The Executive shall keep confidential all trade secrets, client lists, financial data, business strategies, and proprietary information of the Employer during and after employment.
4.2 All inventions, software, works, and developments created by the Executive in the course of employment are assigned to the Employer, consistent with the Copyright Act No. 12 of 2001 and the Industrial Property Act No. 3 of 2001.
4.3 Personal data processed by the Executive on behalf of the Employer shall be handled in compliance with the Data Protection Act No. 24 of 2019 and the lawful instructions of the Employer as data controller.
5. POST-EMPLOYMENT RESTRAINTS
5.1 For a period of [Non-Compete Period] following termination of this Agreement, the Executive shall not, without the Employer's prior written consent, be directly or indirectly employed by or involved in any business that competes with the Employer's core business within Kenya.
5.2 The Executive shall not, during employment or for [Non-Compete Period] after termination, solicit or approach any client, customer, or employee of the Employer with whom the Executive had direct dealings in the 12 months before termination.
5.3 These restraints are reasonable and necessary to protect the Employer's legitimate business interests under the Law of Contract Act Cap. 23 and shall be enforceable to the maximum extent permitted by Kenyan law.
6. TERMINATION
6.1 Either Party may terminate this Agreement by giving the other [Notice Period] written notice, or payment of an amount equivalent to [Notice Period] of gross salary in lieu of notice.
6.2 The Employer may summarily dismiss the Executive without notice for gross misconduct under Section 44 of the Employment Act No. 11 of 2007, including wilful disobedience of a lawful instruction, dishonesty, assault, or commission of a criminal offence, provided the Executive is afforded a fair hearing prior to dismissal.
6.3 On redundancy, the Employer shall comply with Section 40 of the Employment Act No. 11 of 2007, including payment of severance of not less than fifteen days' wages per year of service and notification of the Labour Commissioner.
6.4 On termination for any reason, the Executive shall promptly return all Company property, confidential documents, and access credentials.
7. GOVERNING LAW AND DISPUTE RESOLUTION
7.1 This Agreement is governed by the laws of Kenya, including the Employment Act No. 11 of 2007, the Labour Relations Act No. 14 of 2007, and the Income Tax Act Cap. 470.
7.2 Any dispute arising under this Agreement shall be resolved by [Dispute Resolution] in [Governing County].
IN WITNESS WHEREOF, the Parties have signed this Agreement on the date first written above.
Authorised Signatory (Employer)
________________
Signature
Executive Employee
________________
Signature
Witness
________________
Signature
What Is a Executive Employment Contract (Kenya)?
An Executive Employment Contract in Kenya establishes the conditions of employment, covering role, compensation, leave and notice of termination. It defines duties, remuneration, working hours, leave, and termination procedures binding employer and employee.
The Employment Act No. 11 of 2007, administered by the Ministry of Labour and Social Protection, is the primary statute governing individual employment relationships in Kenya. Section 9 mandates disclosure of the employer's name, the employee's name, the job title or description, the date employment commenced, the remuneration and method of payment, the hours of work, and the leave entitlement. An Executive Employment Contract complies with these mandatory requirements and goes substantially further by incorporating equity compensation, performance bonus structures, change-of-control provisions, and post-employment restraints.
The Labour Relations Act No. 14 of 2007 governs the collective dimension of employment in Kenya, including trade union recognition and collective bargaining agreements. While most executives are not covered by collective bargaining agreements, the Labour Relations Act No. 14 of 2007 applies to labour disputes and the jurisdiction of the Employment and Labour Relations Court (ELRC), established under Article 162(2)(a) of the Constitution of Kenya 2010 and the Employment and Labour Relations Court Act No. 20 of 2011. The ELRC has exclusive original jurisdiction over employment disputes, including wrongful dismissal claims by executives.
The Income Tax Act Cap. 470, administered by the Kenya Revenue Authority (KRA), taxes employment income — including salary, allowances, benefits in kind, and bonuses — under the Pay As You Earn (PAYE) system. Employers are required to deduct and remit PAYE monthly. Benefits in kind provided to executives, such as a company vehicle, housing allowance, or medical cover, are subject to fringe benefit tax rules under the Income Tax Act Cap. 470 and the Income Tax (Fringe Benefits) Rules.
The National Social Security Fund Act No. 45 of 2013 (NSSF Act), administered by the National Social Security Fund (NSSF), requires mandatory contributions from both employers and employees. The National Hospital Insurance Fund Act No. 9 of 1998 (NHIF), administered by the National Hospital Insurance Fund (NHIF) — rebranded as the Social Health Authority (SHA) under the Social Health Insurance Act No. 16 of 2023 — requires mandatory health insurance contributions. An Executive Employment Contract must address both NSSF and SHA contributions.
The Data Protection Act No. 24 of 2019, administered by the Office of the Data Protection Commissioner (ODPC), imposes obligations on employers who process personal data of employees. An executive's employment record, performance evaluations, and payroll data constitute personal data under the Data Protection Act, and the employer must comply with the data protection principles of the Act, including lawfulness, purpose limitation, and data minimisation.
When Do You Need a Executive Employment Contract (Kenya)?
An Executive Employment Contract in Kenya is required whenever a company, state corporation, non-governmental organisation, or other entity appoints a person to a senior leadership position that carries fiduciary duties, strategic decision-making authority, or significant financial accountability.
An Executive Employment Contract is needed when a private limited company registered under the Companies Act No. 17 of 2015 with the Business Registration Service (BRS) appoints a Managing Director or CEO. The Companies Act No. 17 of 2015 distinguishes between directors (who owe fiduciary duties to the company under Section 142) and executive officers who are also employees. A combined director-employee relationship requires an Executive Employment Contract that addresses both the employment terms and the directorship duties to avoid ambiguity before the Employment and Labour Relations Court (ELRC).
An Executive Employment Contract is required when a company listed on the Nairobi Securities Exchange (NSE) appoints a senior officer. The Capital Markets Authority (CMA) Corporate Governance Code 2015 and the NSE Listing Rules require listed companies to disclose executive remuneration in annual reports and to have board-approved remuneration policies. A well-drafted Executive Employment Contract documents the remuneration structure, bonus targets, and share option scheme terms that must be disclosed.
An Executive Employment Contract is needed when a foreign multinational corporation establishes a Kenyan subsidiary under the Companies Act No. 17 of 2015 and seconds an expatriate executive. The Kenya Citizens and Foreign Nationals Management Service (KCFNMS) and the Department of Immigration Services issue Class G work permits to foreign nationals employed in Kenya. The Executive Employment Contract must state the work permit number and the permitted employment category.
An Executive Employment Contract is required when a state corporation established under the State Corporations Act Cap. 446 and supervised by a parent ministry appoints a Chief Executive Officer. The State Corporations Advisory Committee (SCAC) guidelines govern executive remuneration in state corporations, and the appointment letter alone is insufficient — a full Executive Employment Contract reflecting the SCAC-approved terms is required.
An Executive Employment Contract is needed when venture capital or private equity investors acquire a significant stake in a Kenyan company and require key-man provisions: obligations on the executive to remain employed for a specified lock-in period, and step-in rights for investors if the executive departs. These provisions are not found in standard employment letters and require a dedicated Executive Employment Contract.
What to Include in Your Executive Employment Contract (Kenya)
An Executive Employment Contract in Kenya under the Employment Act No. 11 of 2007 must contain the following essential elements to be legally compliant and commercially effective.
Parties and Commencement: Full legal names of the employer (including company registration number from the Business Registration Service (BRS) and registered office address) and the executive (full name, National Identity Card (NIC) number or passport number for expatriates, and KRA PIN). The effective date of employment and, if applicable, the probationary period duration — which must not exceed six months under Section 42(1) of the Employment Act No. 11 of 2007.
Job Title, Duties, and Reporting Line: The executive's precise title, primary duties, key performance indicators (KPIs), and the board committee or officer to whom the executive reports. For a CEO, the reporting line to the Board of Directors and the board committee responsible for executive oversight must be specified.
Base Salary and Benefits: The gross monthly or annual salary stated in Kenya Shillings (KES), the pay cycle (monthly on a specified date), and the method of payment (bank transfer to a named account). Statutory deductions — PAYE under the Income Tax Act Cap. 470, NSSF under the National Social Security Fund Act No. 45 of 2013, and SHA/NHIF contributions under the Social Health Insurance Act No. 16 of 2023 — must be listed. Benefits including company vehicle (or car allowance), housing allowance, medical cover, club membership, and mobile phone allowance should be itemised.
Performance Bonus and Equity: The annual performance bonus structure, the KPIs on which it is assessed, the maximum bonus as a percentage of base salary, the assessment period, and the board approval mechanism. Where share options or a long-term incentive plan (LTIP) are offered, the vesting schedule, cliff date, exercise price (if applicable), and the rules governing options on termination must be set out.
Leave Entitlements: Minimum annual leave of 21 working days under Section 28 of the Employment Act No. 11 of 2007 after 12 months of continuous service; sick leave of 7 days on full pay and 7 days on half pay per year under Section 30; and maternity leave of 3 months on full pay under Section 29, paternity leave of 2 weeks on full pay, and compassionate leave as agreed.
Confidentiality and Intellectual Property: Obligations to protect trade secrets, client lists, financial data, and strategic plans during and after employment. Assignment to the employer of all inventions, software, and works created in the course of employment, consistent with the Copyright Act No. 12 of 2001 and the Industrial Property Act No. 3 of 2001.
Post-Employment Restraints: Non-compete and non-solicitation clauses must be reasonable in scope, duration (typically 6 to 12 months in Kenya), and geographic area to be enforceable under Kenyan common law as received through the Law of Contract Act Cap. 23. Courts consider whether the restraint protects a legitimate business interest and whether it is proportionate.
Termination and Severance: Notice period (typically 3 to 6 months for senior executives), grounds for summary dismissal under Section 44 of the Employment Act No. 11 of 2007 (including wilful disobedience, intoxication, and dishonesty), and severance pay on redundancy under Section 40 of the Employment Act. The forms-legal.com Executive Employment Contract template incorporates all 20 mandatory and commercial elements required by the Employment Act No. 11 of 2007 and the Capital Markets Authority Corporate Governance Code 2015.
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year = {2026},
howpublished = {\url{https://forms-legal.com/kenya/employment/contracts/executive-employment-contract-kenya}},
note = {Free legal document template}
}Also available for these jurisdictions:
Frequently Asked Questions
Under Section 9 of the Employment Act No. 11 of 2007, every employer in Kenya is required to provide each employee with a written statement of employment particulars within two months of the commencement of employment. The written statement must cover the employer's name, job title, remuneration, hours of work, and leave entitlement. While a brief statutory statement technically satisfies Section 9, it is wholly inadequate for executive appointments. Senior executives typically hold fiduciary responsibilities, have access to confidential strategic information, and receive complex remuneration packages involving bonuses, allowances, and share options that cannot be captured in a bare statutory statement. A detailed Executive Employment Contract documents all commercial terms, protects the company's legitimate business interests through confidentiality and restraint clauses, and provides certainty in the event of a dispute before the Employment and Labour Relations Court (ELRC). Failure to provide written employment particulars is an offence under the Employment Act No. 11 of 2007, and the ELRC may draw adverse inferences against an employer who cannot produce a written contract in dismissal proceedings.
Section 42(1) of the Employment Act No. 11 of 2007 provides that a probationary period for an employee in Kenya shall not exceed six months, except where the employer and employee agree in writing to extend the probation by a further period not exceeding six months where the employer has reasonable cause to do so. The total probationary period may therefore not exceed twelve months in any circumstance. During probation, an executive may be terminated with seven days' notice or payment in lieu under Section 42(3) of the Employment Act. However, the employer must still comply with the principles of fair procedure established by the Employment and Labour Relations Court — a summary dismissal without any process during probation may still attract a finding of unfair termination if the executive can show that the dismissal was for a reason unrelated to performance or conduct. Executive Employment Contracts in Kenya typically set a three-month probationary period for senior officers, with a structured performance review at the end of the third month before confirmation.
Post-employment non-compete clauses are enforceable in Kenya under the common law principles incorporated through the Law of Contract Act Cap. 23, provided they are reasonable in scope, geographic area, and duration. Kenyan courts follow the restraint-of-trade doctrine: a non-compete clause must protect a legitimate proprietary interest of the employer — such as trade secrets, client relationships, or confidential pricing information — and must not be wider than reasonably necessary to protect that interest. Typically, Kenyan courts will uphold non-compete clauses of six to twelve months covering a defined geographic area or industry sector for senior executives who had direct access to strategic information or key client relationships. A blanket global non-compete of indefinite duration is unlikely to be enforced. Non-solicitation of employees and clients clauses are generally viewed more favourably than pure non-compete clauses and are routinely enforced by the Employment and Labour Relations Court (ELRC). The Executive Employment Contract should include a severability clause so that if any restraint is found to be too wide, the court can read it down rather than void it entirely.
Executives employed in Kenya are entitled to the same statutory minimum leave entitlements as all other employees under the Employment Act No. 11 of 2007. Under Section 28, an employee who has completed twelve months of continuous service is entitled to not less than 21 working days of annual leave with full pay. Under Section 30, an employee is entitled to sick leave of not less than 7 days on full pay and a further period of not less than 7 days on half pay in each consecutive period of 12 months' service, subject to production of a medical certificate from a registered medical practitioner. Under Section 29, a female employee is entitled to three months of maternity leave on full pay, and under Section 29A (as amended), a male employee is entitled to two weeks of paternity leave on full pay. Public holidays declared under the Public Holidays Act Cap. 110 are additional to annual leave. Most Executive Employment Contracts in Kenya provide leave entitlements that exceed these statutory minimums — particularly annual leave of 25 to 30 days — and may include study leave, compassionate leave, and sabbatical provisions for long-serving executives.
Fair termination of an executive's employment in Kenya requires both a substantively valid reason and a procedurally fair process under Sections 43, 44, and 45 of the Employment Act No. 11 of 2007. For termination on grounds other than summary dismissal — such as poor performance, redundancy, or restructuring — the employer must give the executive the contractual or statutory notice period (whichever is longer), hold a hearing to give the executive an opportunity to respond to any allegations, and document the process. For termination on grounds of serious misconduct under Section 44 (wilful disobedience, assault, intoxication on duty, conviction of a criminal offence, or deliberate breach of a lawful and reasonable rule of the employer), the employer may dismiss without notice but must still afford the executive a fair hearing before dismissal. On redundancy under Section 40, the employer must notify the Labour Commissioner, serve one month's notice, pay severance of not less than fifteen days' wages per year of service, and follow the last-in-first-out principle unless a different selection criterion is agreed with the employee's representative. The Employment and Labour Relations Court (ELRC) may award compensation of up to 12 months' wages for unfair termination under Section 49 of the Employment Act No. 11 of 2007.
Executive remuneration in Kenya is subject to multiple tax obligations under the Income Tax Act Cap. 470, administered by the Kenya Revenue Authority (KRA). Base salary, housing allowance, transport allowance, and cash bonuses are taxed as employment income under the Pay As You Earn (PAYE) system, with the employer deducting and remitting tax monthly using the personal income tax bands — currently ranging from 10% to 35% on chargeable income above KES 800,000 per month as of the Finance Act 2023. Benefits in kind — company vehicle, employer-paid medical cover above specified limits, and low-interest or interest-free loans from the employer — are subject to fringe benefit tax at the corporate tax rate under the Income Tax (Fringe Benefits) Rules, with the employer paying the fringe benefit tax quarterly. Housing benefit is taxed at 15% of the executive's total employment income or the fair market rental value of the housing, whichever is higher. Share options granted under an employee share ownership plan (ESOP) are taxed at the point of exercise on the difference between the exercise price and the market value. Executives are also subject to NSSF contributions and SHA (formerly NHIF) contributions as statutory deductions.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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