Understanding Probationary Contracts in Kenya: Pros and Cons

In the Kenyan employment landscape, probationary contracts are a common feature, serving as a preliminary phase before full-time employment is offered. These contracts, governed by the Employment Act, 2007, provide a crucial testing period for both employers and employees to assess mutual suitability. However, like any employment arrangement, probationary contracts come with their own set of advantages and disadvantages. This article delves into the pros and cons of probationary contracts in Kenya, providing a comprehensive understanding of the legal framework that governs them.

Understanding Probationary Contracts in Kenya

In Kenya, a probationary contract is defined under the Employment Act, 2007. Section 42 of the Act provides the legal foundation for these contracts, specifying that a probationary period shall not exceed six months but may be extended for a further period of not more than six months with the agreement of both parties. During this period, either party can terminate the contract by giving at least seven days’ notice or payment in lieu of notice.

Pros of Probationary Contracts

1. Flexibility for Employers

One of the primary advantages of probationary contracts is the flexibility they offer to employers. During the probationary period, employers have the opportunity to evaluate an employee’s performance, behavior, and cultural fit within the organization. If the employee does not meet the expected standards, the employer can terminate the contract with relative ease, compared to the more stringent requirements of terminating a confirmed employee.

2. Opportunity for Skill Assessment

For roles that require specific skills or competencies, a probationary contract allows the employer to assess whether the employee possesses the necessary qualifications. This period acts as a practical test to confirm if the employee can deliver on the expectations laid out during the hiring process.

3. Reduced Legal Risks

Probationary contracts can reduce legal risks associated with wrongful termination claims. Since the Employment Act permits easier termination during probation, provided the required notice is given, employers are less likely to face litigation compared to the termination of confirmed employees, which requires a valid reason as stipulated in Section 45 of the Employment Act.

4. Cost-Effectiveness

Employers can also benefit from the cost-effectiveness of probationary contracts. During the probation period, the employer may pay lower wages or refrain from providing full benefits that are reserved for confirmed employees. This can result in significant cost savings, especially for small businesses or startups.

Cons of Probationary Contracts

1. Job Insecurity for Employees

The most significant downside of probationary contracts is the inherent job insecurity for employees. Knowing that their employment is not guaranteed beyond the probationary period can create anxiety and stress, which may negatively impact their performance. This uncertainty can also make it difficult for employees to plan for the future, particularly in terms of financial stability.

2. Limited Employee Benefits

Employees on probationary contracts often have limited access to benefits such as health insurance, pension contributions, and paid leave. This can be a major disadvantage, especially if the probationary period is extended. In some cases, this may deter highly qualified candidates from accepting a job offer if they feel that the lack of benefits outweighs the opportunity.

3. Potential for Exploitation

There is a risk that some employers may exploit probationary contracts by repeatedly hiring employees on probation without ever confirming them, thereby avoiding the obligations that come with full-time employment. This can lead to a cycle of temporary employment where the worker is never truly secure in their job.

4. Negative Impact on Employee Morale

Probationary contracts can sometimes create a disconnect between the employee and the organization. If the employee feels they are being constantly evaluated or that their job security is perpetually under threat, it can lead to disengagement and lower morale. This, in turn, may affect their productivity and overall contribution to the company.

Legal Protections and Considerations

Despite the flexibility offered by probationary contracts, Kenyan law also provides protections to ensure that employees are not unfairly dismissed. For instance, Section 42(2) of the Employment Act requires that both the employer and the employee must mutually agree upon the probationary period and any extensions. Moreover, employers must comply with the principles of fair administrative action as enshrined in Article 47 of the Constitution of Kenya, 2010. This means that any termination, even during probation, must be carried out fairly and justly.

In conclusion,

probationary contracts in Kenya offer employers and employees a structured period to evaluate compatibility and performance. While they provide employers with the flexibility to manage their workforce effectively, they also pose challenges, particularly regarding job security and employee morale. Both parties must understand their rights and obligations under Kenyan law to ensure that the probationary period is beneficial and fair.

FAQs

1. How long can a probationary period last in Kenya?Under the Employment Act, 2007, a probationary period in Kenya can last up to six months, with a possible extension of an additional six months if both parties agree.
2. Can an employee be dismissed without notice during the probationary period?No, the Employment Act requires that either party must give at least seven days’ notice or payment in place of notice during the probationary period.
3. Are employees on probation entitled to leave?Yes, employees on probation are entitled to leave as provided under the Employment Act, including annual leave, sick leave, and maternity leave, although some benefits may be prorated or limited during this period.
4. What happens if an employee’s probationary period ends without confirmation?If an employer does not confirm the employee after the probationary period, the contract may either lapse or be terminated, depending on the terms agreed upon. The employer should provide clear communication regarding the employee’s status.
5. Can probationary periods be extended without the employee’s consent?No, any extension of the probationary period must be mutually agreed upon by both the employer and the employee as per Section 42 of the Employment Act.