Secondment Agreement (Kenya)

A Secondment Agreement in Kenya is a tripartite legal arrangement under the Employment Act No. 11 of 2007 and the Law of Contract Act Cap. 23 in which a home employer (the employee's substantive employer) temporarily assigns an employee to work for a host organisation for a defined period, while the employee's contract of employment with the home employer remains in force. The employee is referred to as the secondee, the organisation sending the employee is the home employer, and the organisation receiving the secondee is the host.

Section 9 of the Employment Act No. 11 of 2007 requires that every contract of employment be in writing where it is not performable within three months and must state the employer's name, the employee's name, the nature of the work, the place of work, the remuneration, and the duration. A secondment that extends beyond three months must be documented by a written Secondment Agreement that supplements the employee's original contract of employment.

The distinction between a secondment and a labour contracting arrangement is legally significant in Kenya. Under the Labour Institutions Act No. 12 of 2007 and the Employment Act No. 11 of 2007, employees placed by a labour contractor with a client organisation are treated as employees of the host organisation in certain circumstances, triggering direct employment obligations. A secondment, by contrast, preserves the employee's employment relationship with the home employer throughout the secondment period, and the home employer retains primary responsibility for statutory employer obligations.

The National Social Security Fund (NSSF) Act No. 45 of 2013 administered by the National Social Security Fund Board requires mandatory NSSF contributions for all employees in Kenya. During a secondment, the home employer remains the registered employer for NSSF purposes and must continue to remit both the employer and employee contributions, unless the Secondment Agreement expressly provides for the host to bear the employer contribution on a cost-recovery basis.

The National Hospital Insurance Fund (NHIF) Act No. 9 of 1998 (now transitioned to the Social Health Authority (SHA) under the Social Health Insurance Act 2023) requires mandatory health insurance contributions for all formal sector employees. The Secondment Agreement should specify which party — home employer or host — is responsible for NHIF/SHA contributions during the secondment.

The Kenya Revenue Authority (KRA) under the Income Tax Act Cap. 470 and the Pay As You Earn (PAYE) Regulations require the employer of the secondee — typically the home employer, unless the host assumes payroll responsibility — to deduct and remit PAYE on the secondee's total emoluments. Where the secondee receives allowances or top-up payments from the host, the taxability of these payments under Section 3 of the Income Tax Act Cap. 470 must be carefully considered to avoid PAYE non-compliance.

The legal framework governing the Secondment Agreement (Kenya) in Kenya draws on several key statutes and regulatory bodies. Under the Employment Act No. 11 of 2007, the Employment and Labour Relations Court (ELRC) adjudicates workplace disputes in Kenya. Section 35 of the Employment Act 2007 governs termination of employment. The National Social Security Fund Act No. 45 of 2013 mandates employer contributions to NSSF. The Social Health Insurance Fund (SHIF) replaced NHIF in 2024. The Kenya Revenue Authority (KRA) administers PAYE under the Income Tax Act (Cap. 470). Parties executing a Secondment Agreement (Kenya) in Kenya should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Employment Act No. 11 of 2007 sets the foundational requirements.

A Secondment Agreement in Kenya is required whenever an employer temporarily places an employee with another organisation to work under that organisation's direction for a fixed period, particularly where the placement is expected to last more than a few weeks.

A Secondment Agreement is needed when a Kenyan parent company places a senior employee with a subsidiary, affiliate, or joint venture partner in Kenya or across the East African Community (EAC). Multinational companies operating in Kenya frequently second regional managers or specialist staff to Kenyan subsidiaries, and a written agreement is required to document the terms, protect the home employer's interests, and comply with Kenya Revenue Authority (KRA) transfer pricing requirements under the Income Tax Act Cap. 470 where costs are recharged.

A Secondment Agreement is required when a Kenyan commercial bank or financial institution seconds an employee to the Central Bank of Kenya (CBK) or a regulatory agency as part of a secondment programme. The CBK Act Cap. 491 and the Banking Act Cap. 488 allow regulated institutions to participate in secondment arrangements with the regulator. The agreement must document confidentiality obligations, given the sensitive nature of regulatory work.

A Secondment Agreement is needed when a Kenyan non-governmental organisation (NGO) or development partner places a technical adviser or programme officer with a county government under a technical assistance programme. County governments in Kenya operate under the County Governments Act No. 17 of 2012, and secondees placed with county governments should have their terms, reporting lines, and accountability arrangements clearly documented.

A Secondment Agreement is required when a Kenyan private sector company places an employee with a partner organisation as part of a capacity building or joint project arrangement under a public-private partnership. The Public Private Partnerships Act No. 15 of 2021 governs the legal framework for PPPs in Kenya, and employees seconded to PPP project companies should have their employment status, benefits, and return rights carefully documented.

A Secondment Agreement is needed when a law firm, consulting firm, or professional services firm in Kenya temporarily places a professional staff member with a client organisation. The agreement should specify that the secondee remains employed by the home firm, that the home firm retains professional indemnity cover for the secondee's work, and that the host pays an agreed secondment fee to the home firm.

A Kenya Secondment Agreement under the Employment Act No. 11 of 2007 s.9 and the Law of Contract Act Cap. 23 must contain the following essential elements to be enforceable and compliant with Kenya employment law.

Parties: Full legal names and addresses of the home employer, the host organisation, and the secondee (employee). For corporate parties, the Business Registration Service (BRS) number under the Companies Act No. 17 of 2015. The secondee should be identified by name, National Identity Card (NIC) number, and their substantive role at the home employer.

Secondment Role and Duration: The secondee's role or title at the host organisation, a description of the duties to be performed at the host, the secondment start date, and the secondment end date. The agreement should specify whether the secondment may be extended by written agreement and whether the secondee or either employer may terminate the secondment early with notice.

Reporting Lines and Day-to-Day Management: The secondee's line manager at the host organisation, the reporting structure during the secondment, and the host's right to direct and manage the secondee's daily work. The home employer typically retains the right to recall the secondee if the host's instructions are unlawful or inconsistent with the secondee's professional obligations.

Remuneration and Benefits: Whether the secondee's salary and benefits continue to be paid by the home employer (most common in Kenya secondments) or by the host. Where the home employer pays and recharges the host, the recharge mechanism and frequency should be stated. Allowances paid by the host — housing, transport, subsistence — and their taxability under the Income Tax Act Cap. 470 PAYE regime must be specified.

Statutory Contributions: Identification of which party is responsible for NSSF contributions under the NSSF Act No. 45 of 2013, NHIF/SHA contributions under the Social Health Insurance Act 2023, and PAYE withholding and remittance under the Income Tax Act Cap. 470. Failure to remit statutory deductions exposes both the home employer and the host to penalties under the respective Acts.

Confidentiality and IP: The secondee's obligation to maintain the confidentiality of both the host's proprietary information and the home employer's confidential information during and after the secondment. Intellectual property created by the secondee during the secondment should be assigned to the host or the home employer depending on the nature of the work, in accordance with the Industrial Property Act No. 3 of 2001.

Return to Home Employer: The secondee's right to return to their substantive role — or a comparable role — at the home employer at the end of the secondment. A clause protecting the secondee's continuity of service and seniority upon return is important to comply with Section 35 of the Employment Act No. 11 of 2007 on employment terms.

Governing Law and Dispute Resolution: Governed by the laws of Kenya. Employment disputes may be referred to the Employment and Labour Relations Court under the Employment and Labour Relations Court Act No. 20 of 2011, or to the Directorate of Employment under the Labour Relations Act No. 14 of 2007 for conciliation. The forms-legal.com Kenya Secondment Agreement template covers all required elements under the Employment Act No. 11 of 2007 and the Labour Relations Act No. 14 of 2007.

Additional compliance elements for a Secondment Agreement (Kenya) used in Kenya include: Under the Employment Act No. 11 of 2007, the Employment and Labour Relations Court (ELRC) adjudicates workplace disputes in Kenya. Section 35 of the Employment Act 2007 governs termination of employment. The National Social Security Fund Act No. 45 of 2013 mandates employer contributions to NSSF. The Social Health Insurance Fund (SHIF) replaced NHIF in 2024. The Kenya Revenue Authority (KRA) administers PAYE under the Income Tax Act (Cap. 470). Forms-legal.com provides this template as a starting point for Kenya-compliant documentation.